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2021 (8) TMI 498 - AT - Income TaxCIT- A passed order ex-parte - dismissal of the appeal of the assessee for non-prosecution - HELD THAT - We find merit in the contention of the ld. Counsel for the assessee that proper and sufficient opportunity of being heard was not given to the assessee either by the Assessing Officer or by the ld. CIT(Appeals) and the orders passed by them are in violation of the principle of natural justice. Even the ld. D.R. has not been able to rebut or controvert this position, which is clearly evident from the orders of the AO and ld. CIT(Appeals). We, therefore, set aside the impugned order passed by the ld. CIT(Appeals) ex-parte and restore the matter back to the file of the Assessing Officer with a direction to frame the assessment afresh on merit in accordance with law after giving proper and sufficient opportunity of being heard to the assessee. Assessee is treated as allowed for statistical purposes.
Issues involved:
Appeal against ex-parte order of Commissioner of Income Tax (Appeals) - Confirmation of addition under section 68 for unexplained cash credit - Violation of principle of natural justice. Analysis: The appeal was filed by the assessee against the ex-parte order of the Commissioner of Income Tax (Appeals) confirming the addition of ?5.01 crores under section 68 for unexplained cash credit. The Assessing Officer had treated the entire share capital and share premium amount as unexplained cash credit due to non-compliance with summons issued under section 131. The assessee contended that sufficient opportunity of being heard was not granted by the authorities, violating the principle of natural justice. The Tribunal found merit in the argument, noting that the shareholders were not given adequate time to comply with the summons, and the assessee was not informed of the non-compliance. The Tribunal held that the orders passed were in violation of natural justice as proper opportunity of being heard was not provided. The Tribunal set aside the ex-parte order of the Commissioner of Income Tax (Appeals) and directed the Assessing Officer to frame the assessment afresh on merit in accordance with the law after giving the assessee proper and sufficient opportunity of being heard. The Tribunal observed that the Assessing Officer and the Commissioner of Income Tax (Appeals) did not provide the assessee with a fair chance to present its case. The Tribunal highlighted that the assessee was not informed about the non-compliance of the shareholders with the summons and was not given an opportunity to produce necessary evidence. The Tribunal also noted that the hearing fixed by the Commissioner of Income Tax (Appeals) was not received by the assessee, leading to the dismissal of the appeal for non-prosecution. The Tribunal emphasized that the principle of natural justice requires that parties be given adequate opportunity to present their case and be heard before decisions are made. The Tribunal found that the orders passed by the authorities did not adhere to this fundamental principle, necessitating the setting aside of the ex-parte order and a fresh assessment with proper hearing. In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes, overturning the ex-parte order of the Commissioner of Income Tax (Appeals) and remanding the matter back to the Assessing Officer for a fresh assessment with proper opportunity of being heard. The decision emphasized the importance of upholding the principle of natural justice in tax proceedings to ensure fairness and procedural regularity.
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