2015 (11) TMI 296 - AT - Income Tax

Breach of natural justice - non speaking order - CIT(A) has dismissed the assessee s appeal, ex parte, qua the assessee - Held that - The learned CIT(Appeals) has disposed of the assessee s appeal, ex parte, qua the assessee, observing that assessee did not substantiate its claim. Since assessee was not present, therefore, in order to provide substantial justice to assessee, consider it appropriate to provide one more opportunity in conformity with the principles of natural justice. The order of ld. CIT(A) is accordingly set aside and the matter is restored back to his file to decide the appeal de novo in accordance with law, of course, after affording reasonable opportunity of being heard to the assessee. - Decided in favour of assessee by way of remand.

Summary

Issues:
1. Allegation of violation of principles of natural justice by the CIT(A)
2. Dispute regarding the calculation of fringe benefits value
3. Appeal against the ex parte order of the CIT(A)

Analysis:

Issue 1: Allegation of violation of principles of natural justice by the CIT(A)
The appellant raised concerns about the CIT(A) not providing sufficient opportunity to present their case and failing to acknowledge their appearance. They also disputed the authenticity of the notice sent for a hearing. The appellant argued that the actions of the CIT(A) were arbitrary and against natural justice principles. However, the ITAT found merit in the appellant's contentions and set aside the CIT(A)'s order. The ITAT emphasized the importance of adhering to the principles of natural justice and granted the appellant another opportunity to present their case before the CIT(A) for a fair hearing.

Issue 2: Dispute regarding the calculation of fringe benefits value
The appellant contested the calculation of fringe benefits value by the assessing officer (AO), claiming that the value shown in the ITR-V and the computation of fringe benefits differed significantly. The appellant argued that the AO ignored relevant figures and failed to consider the accurate value of fringe benefits, leading to an unjustified demand. The ITAT noted the discrepancies highlighted by the appellant and directed the CIT(A) to reevaluate the calculation of fringe benefits in accordance with the figures provided by the appellant. The ITAT stressed the importance of accurate assessment based on the information available in the income tax return.

Issue 3: Appeal against the ex parte order of the CIT(A)
The appellant's counsel contended that the CIT(A) had passed an ex parte order dismissing the appellant's appeal due to non-substantiation of claims. The ITAT acknowledged the procedural lapse and lack of substantiation but emphasized the need to uphold the principles of natural justice. In light of the appellant's absence during the proceedings, the ITAT set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for a fresh decision after providing the appellant with a fair opportunity to be heard. The ITAT allowed the appeal for statistical purposes only, ensuring that the appellant's right to a fair hearing was preserved.

In conclusion, the ITAT's judgment addressed the issues raised by the appellant regarding natural justice, calculation of fringe benefits value, and the ex parte order, emphasizing the importance of procedural fairness and accurate assessment in tax matters.