2024 (10) TMI 254 - AT - Income Tax

Ex-parte dismissal of appeal by the Ld. NFAC - HELD THAT - In the case of Smt. Ritu Devi v. CIT 2003 (8) TMI 10 - MADRAS HIGH COURT time of just few days was given to the assessee to furnish reply which was also held as denial of real opportunity. It shall be worthy to underlined that the opportunity of being heard should be real, reasonable and effective and same should not be empty formalities, it should not be a paper opportunity, the doctrine of natural justice is a facet of fair play in action and no person shall be saddled with a liability without being heard. In I.E. Vittal v. Appropriate Authority 1996 (6) TMI 81 - ANDHRA PRADESH HIGH COURT it is held that, where a decision is based upon a document in a proceeding, copy of the same should be provided to the affected party according reasonable period to negate, otherwise, it would violate the principles of natural justice as the opportunity of being heard should be an effective opportunity and not an empty formality, as the denial of reasonable opportunity renders the action void. We are of considered view that, the action of the Ld. NFAC is suffered from sufficiency of reasonable opportunity to the appellant to adduce necessary evidential material in support of his claim made and to represent effectively vis- -vis to comply with the requirements sought. Placing reliance on St. Paul s Anglo Indian Education Society 2003 (2) TMI 41 - PATNA HIGH COURT we are mindful to hold that the impugned adjudications are unjustified as the appellant was deprived of reasonable opportunity and time to produce all relevant documents to substantiate his claims as made in the returns of income filed vis- - vis grounds of appeals raised. In the event we deem in all the fairness and in larger interest of justice necessary to accord one more real opportunity to the appellant to comply with notices and contest these cases on merits. In view of this, without offering any comments on merits of the cases, we set-aside these impugned orders and remit them back to the Ld. NFAC with a direction deal therewith de-novo and pass separate speaking orders u/s 250(6) of the Act preferable in three effective hearing opportunities.

Summary

Issues:
Challenging separate orders of assessments for different assessment years, violation of natural justice in appellate proceedings, sufficiency of reasonable opportunity for the appellant.

Analysis:
The judgment involves three appeals challenging separate orders of assessments passed by the first appellate authority under the Income-tax Act for different assessment years. The facts of the cases revolve around an individual engaged in business activities as a facilitator for buying and selling land in Maharashtra. The assessments were initiated based on information regarding cash and cheque payments received by the assessee from a land developer. The first appellate authority confirmed the additions made by the assessing officer as unexplained money and brought them to tax. The appellant challenged these additions on legal and merit grounds, but the appeals were dismissed for lack of evidence.

For the assessment year 2017-18, the appellant failed to file a return of income, leading to a best judgment assessment by the assessing officer. Various sources of income were considered, including unexplained cash deposits and other regular income. The appellant's explanation for the cash deposits was not accepted, resulting in additions to the returned income. The appellant challenged these assessments, but the appeals were dismissed for lack of evidence.

The Tribunal focused on the issue of violation of natural justice in the appellate proceedings. It observed that the appellant was not given a reasonable opportunity to present necessary evidence and comply with the requirements sought. Citing precedents, the Tribunal emphasized the importance of a real, reasonable, and effective opportunity to be heard, as denial of such opportunity renders the action void. Relying on a High Court judgment, the Tribunal held that the impugned adjudications were unjustified due to the appellant being deprived of a reasonable opportunity to produce relevant documents.

In light of the above, the Tribunal set aside the impugned orders and remitted them back to the first appellate authority with directions to deal with the cases de-novo and pass separate speaking orders, providing the appellant with three effective hearing opportunities. The appeals were partly allowed for statistical purposes, without commenting on the merits of the cases. The judgment emphasized the importance of affording appellants a genuine opportunity to present their case and contest assessments on merits.