2019 (3) TMI 806 - AT - Income Tax

Maintainability of Appeal before CIT(A) - non enclosure of payment of necessary court fees - Details of fee payment is mentioned in appeal form 35 - no adequate opportunity of being heard to the assessee - denial of natural justice - Reopening of assessment denying exemption u/s 11 and 12 - HELD THAT - When assessee has given complete particulars of payment of appeal fee but if somehow copy of receipt has not been annexed with the appeal it was for the ld. CIT (A) to give the assessee an adequate opportunity to bring on record receipts for making the payment of appeal fee. CIT (A) has rather short-circuited the entire process of hearing by summarily dismissing the appeals for non-enclosure of the proof of payment of receipts. So we are of the considered view that this is a case where that the ld. CIT (A) has not given adequate opportunity of being heard to the assessee and thereby violated the principles of natural justice. - remanded the appeal back to the ld. CIT (A) to decide afresh after providing an opportunity of being heard to the assessee.

Summary

Issues involved:
1. Dismissal of appeals by CIT (A) for non-enclosure of proof of payment of appeal fees.
2. Failure to provide adequate opportunity of being heard to the assessee.
3. Disallowance of various amounts by the AO under different sections of the Income Tax Act.

Analysis:

Issue 1: Dismissal of appeals for non-enclosure of proof of payment of appeal fees
The assessee, a corporate body, filed appeals challenging a composite order passed by the CIT (A) for AYs 2013-14, 2014-15 & 2015-16. The CIT (A) dismissed the appeals as not maintainable due to non-enclosure of proof of payment of appeal fees. However, the Tribunal found that the assessee had indeed deposited the appeal fees, as evidenced by Form No.35. The Tribunal held that the CIT (A) erred in not providing an opportunity to the assessee to rectify the missing receipt and violated principles of natural justice. Consequently, the impugned orders were set aside, and the cases were remanded back to the CIT (A) for fresh consideration.

Issue 2: Failure to provide adequate opportunity of being heard
The Tribunal noted that the CIT (A) dismissed the appeals ex parte without considering the merits due to the absence of proof of payment of appeal fees. Despite the assessee providing details of fee payment, the CIT (A) did not allow an opportunity to rectify the missing receipt. The Tribunal held that this action deprived the assessee of a fair hearing and amounted to a violation of natural justice principles.

Issue 3: Disallowance of various amounts by the AO
The AO treated the assessee as a company and disallowed several amounts under different sections of the Income Tax Act, including disallowances related to reserves, maintenance funds, consultancy fees, grants, interest payments, and depreciation. The Tribunal did not delve into the merits of these disallowances but remanded the cases back to the CIT (A) for a fresh decision. The Tribunal allowed the appeals filed by the assessee for statistical purposes, emphasizing the need for a fair hearing and proper consideration of the appeals.

In conclusion, the Tribunal's decision focused on upholding principles of natural justice by ensuring that the assessee receives a fair opportunity to present their case and rectify any procedural shortcomings. The judgment highlights the importance of due process in tax proceedings and emphasizes the need for thorough consideration of all aspects before making determinations on tax liabilities.