2023 (8) TMI 721 - AT - Income Tax

Order passed by ACIT against principles of natural justice - assessee submitted that Ld. CIT(A) without giving opportunity of being heard to the assessee, proceeded to dismiss the appeal - HELD THAT - Considering the submissions made at bar and the material placed before us, we are of the considered view that the assessee should have been given adequate opportunity of being heard to represent his case. We, therefore, in the interest of principle of natural justice, hereby, set aside the impugned order and restore the issue to the file of Ld.CIT(A) to decide it afresh after giving adequate opportunity of being heard to the assessee. Grounds raised by the assessee are thus, allowed for statistical purposes.

Summary

Issues involved: Appeal against order of Ld. CIT(A) at NFAC, Delhi for AY 2011-12. Grounds: 1) Order passed by ACIT, 2) Penalty imposition of Rs. 981,000, 3) Right to amend grounds of appeal.

Issue 1: Order passed by ACIT

The appellant contended that the order by Ld. CIT(A) lacked opportunity for the appellant to present their case, violating principles of natural justice. The appellant argued that the absence of effective representation led to the dismissal of the appeal. The respondent, however, supported the lower authorities' orders, stating the appellant's negligence and non-compliance with notices. The ITAT found that the appellant was not given a fair chance to present their case before Ld.CIT(A), leading to the dismissal of the appeal. The ITAT set aside the impugned order, emphasizing the importance of providing adequate opportunity for the appellant to be heard, in line with principles of natural justice.

Issue 2: Penalty imposition of Rs. 981,000

The ITAT observed that the appellant failed to file the return of income u/s 139 and declared income after the deadline, rendering it invalid. The appellant's claim of misplaced supporting evidence for expenses and reliance on a specific case law were deemed inapplicable to their situation. The ITAT upheld the penalty imposed by the ACIT, as the appellant had not filed the return of income u/s 139 and concealed income particulars. Consequently, Ground Nos. 1 & 2 were dismissed. The ITAT allowed the appeal for statistical purposes, emphasizing the need for a fair hearing and adherence to natural justice principles.

Outcome: The ITAT allowed the appeal for statistical purposes, highlighting the importance of providing adequate opportunity for the appellant to be heard, in accordance with principles of natural justice. The impugned order was set aside, and the issue was remanded to Ld.CIT(A) for a fresh decision after ensuring the appellant's right to be heard.