2022 (3) TMI 646 - AT - Income Tax

Validity of assessment u/s 144 - ex parte order passed u/s. 144 - assessee is seeking one more opportunity to present its case before the lower authorities - HELD THAT - It is an established principle of natural justice that a litigant should be heard before a decision is taken and before any addition is made by the AO on information obtained from third parties/own source, he must confront the assessee with the material so obtained. Considering the totality of the facts and in the interest of justice, we are of the view that assessee deserve one more opportunity. We therefore restore the issue back to the file of AO and direct him to decide the issue afresh considering the submissions of the assessee. Assessee is also directed to promptly furnish all the required details called by the AO. We therefore, restore the issue back to the file of AO and direct him to pass a fresh order after granting adequate opportunity of hearing to the assessee. Thus the appeal of Assessee is allowed for statistical purposes.

Summary

Issues:
1. Appeal against order passed by Commissioner of Income Tax (Appeals)-Faridabad for Assessment Year 2008-09.
2. Non-appearance of assessee before Assessing Officer (AO) leading to ex parte order.
3. Dismissal of appeal by CIT(A).
4. Grounds raised by appellant against the order of CIT(A).
5. Request for additional opportunity to present case before lower authorities.
6. Consideration of natural justice principles in granting additional opportunity to assessee.

Analysis:
1. The appeal was filed against the order passed by the Commissioner of Income Tax (Appeals)-Faridabad for Assessment Year 2008-09. The AO had issued a notice u/s. 148 of the Act as the assessee, an individual, had not filed the return of income declaring the consideration received from the sale of land. The AO passed an ex parte order determining the taxable income of the assessee.
2. The assessee, aggrieved by the AO's order, approached the CIT(A) who dismissed the appeal. The grounds raised by the appellant included issues related to the treatment of sales consideration as taxable income, calculation of indexed cost, and errors in determining taxable income.
3. During the hearing, the appellant's representative highlighted that the assessee, a small farmer, had entrusted a Chartered Accountant who failed to represent the case effectively. The representative requested an additional opportunity to present the case before the AO, citing a similar decision in a related case.
4. The Appellate Tribunal, considering the principles of natural justice, acknowledged the importance of granting the assessee a fair hearing. The Tribunal observed that the ex parte order by the AO warranted a fresh consideration of the case. Consequently, the Tribunal remitted the issue back to the AO, directing a reevaluation of the matter after considering the submissions of the assessee and ensuring the provision of all necessary details.
5. The Tribunal allowed the appeal for statistical purposes, emphasizing the need for a fair opportunity for the assessee to present their case. The decision aimed to uphold the principles of natural justice and ensure a thorough examination of the matter by the AO with the participation of the assessee.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive overview of the case and the Tribunal's decision.