2024 (12) TMI 27 - AT - Income Tax

Validity of order of CIT(A)(NFAC) s order u/s 250 emanating from the Assessment Order u/s 144 - Assessee's request for personal hearing before the CIT(A) rejected - HELD THAT - We deem it fit and proper to remit the matter to the first appellate authority after giving an opportunity for a personal hearing, in terms of rule 12 of the Faceless Appeals Rules 2021, for adjudication de novo in accordance with the law and by way of a speaking order. Thus faceless Appeal Scheme 2021 has made it mandatory to provide Virtual Hearing if asked by the Assessee. In this case the assessee had asked for personal hearing which has not been provided by the CIT(A)(NFAC). In these facts and circumstances of the case, respectfully following the decision BANK OF INDIA 2022 (6) TMI 1450 - ITAT MUMBAI we set aside the order of the Ld.CIT(A)(NFAC) to the Ld.CIT(A) for de-novo adjudication after granting opportunity of virtual hearing as asked by the assessee.

Summary

Issues:
Appeal against disallowance of deduction u/s. 80P of the Act
Violation of principles of natural justice in passing order
Non-consideration of details filed by the assessee
Non-granting of personal hearing by CIT(A)
Mandatory provision for virtual hearing under Faceless Appeals Scheme 2021

Analysis:
The appeal was filed against the disallowance of deduction u/s. 80P of the Act. The assessee contended that the disallowance was inconsistent with past assessments where the claim was accepted. Additionally, the CIT(A) was criticized for passing an order against principles like stare decisis, consistency, and natural justice. The assessee argued that the CIT(A) failed to seek their explanation, contrary to established legal principles. The order was deemed unsustainable and requested to be quashed or remanded back.

The absence of the assessee during proceedings was noted on multiple occasions, leading to ex-parte proceedings. The findings revealed that the assessee had requested a personal hearing before the CIT(A), but it was not granted. The details submitted by the assessee were not considered by the CIT(A), raising concerns about due process and fair consideration.

Referring to a judgment by the Hon'ble ITAT Mumbai, it was highlighted that the Faceless Appeals Scheme 2021 mandates the provision of virtual hearings upon request by the assessee. Since the CIT(A) did not provide the requested personal hearing, the order was set aside for de-novo adjudication with the opportunity for a virtual hearing. The CIT(A) was instructed to consider the documents filed by the assessee and previous assessment/appeal orders. Consequently, the appeal of the assessee was allowed for statistical purposes.

The judgment emphasized the importance of adhering to principles of natural justice, consistency, and procedural fairness in tax assessments. The mandatory provision for virtual hearings under the Faceless Appeals Scheme 2021 ensures that taxpayers have the opportunity to present their case effectively. The decision to remand the matter for de-novo adjudication with a virtual hearing aligns with the objective of providing a fair and transparent appeal process for taxpayers.