2021 (5) TMI 69 - AT - Income Tax

Dismissal of appeal of the assessee for non-prosecution - order passed ex-parte - Validity of assessment - notice under section 142(1) as well as the subsequent letters were issued by the Assessing Officer during the course of assessment proceedings to the wrong address - HELD THAT - Assessee has submitted that the notice under section 142(1) as well as subsequent letters stated to be issued by the Assessing Officer during the course of assessment proceedings thus were not received by the assessee and even the notices stated to be issued by the ld. CIT(Appeals) fixing the appeal of the assessee for hearing from time to time were never served on the assessee as is clearly mentioned in para no. 2 of the impugned order of the ld. CIT(Appeals), we find merit in the contention of the ld. Counsel for the assessee that proper and sufficient opportunity of hearing was not given to the assessee either by the Assessing Officer during the course of assessment proceedings and even by the ld. CIT(Appeals) during the course of appellate proceedings. D.R. has also not been able to dispute this position, which is clearly evident from the record. We, therefore, find it just and proper to set aside the orders passed by the authorities below and restore the matter to the file of the Assessing Officer for completing the assessment afresh after giving proper and sufficient opportunity of being heard to the assessee.Appeal of the assessee is treated as allowed for statistical purposes.

Summary

Issues:
1. Proper opportunity of hearing not given to the assessee by the Assessing Officer and the CIT(Appeals).

Analysis:
The appeal before the Appellate Tribunal ITAT Kolkata was filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals)-3, Kolkata, which dismissed the appeal of the assessee for non-prosecution. The assessee, a Company engaged in trading and investment in shares, had filed a return declaring a loss. The assessment was reopened by the Assessing Officer under section 147/143(3) to investigate the share capital introduced by the assessee. Despite notices issued by the Assessing Officer and the CIT(Appeals), the assessee failed to comply, leading to an ex-parte assessment under section 144/263/147/143(3) where the share capital was treated as unexplained and added to the total income under section 68.

Upon hearing arguments from both sides, the Tribunal found merit in the contention that the assessee did not receive notices due to incorrect address details. The Tribunal noted that proper and sufficient opportunity of hearing was not provided to the assessee by the authorities during the assessment and appellate proceedings. The Tribunal decided to set aside the orders of the lower authorities and remanded the matter to the Assessing Officer for a fresh assessment, emphasizing the importance of providing the assessee with a fair hearing. The assessee was directed to cooperate with the Assessing Officer for the expeditious completion of the fresh assessment.

Consequently, the appeal of the assessee was treated as allowed for statistical purposes, indicating a favorable outcome for the assessee. The order was pronounced in the open court on April 16, 2021.