2021 (7) TMI 609 - AT - Income Tax

Denial of natural justice - CIT-A's order ex-parte without giving proper and reasonable opportunity of being heard to the assessee - HELD THAT - In the present case, it is noticed that the Ld. CIT(A) decided the appeal ex-parte, he simply stated that notices of hearing on 20/02/2019, 23/04/2019, 26/06/2019 and 15/07/2019 were issued but none attended. However, nothing is brought on record to substantiate that the notices of hearing were served upon the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, audi alteram partem . We therefore keeping in view the principle of natural justice, deem it appropriate to set aside this case back to the file of Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

Summary

Issues:
Appeal against ex-parte order of CIT(A) - Principles of natural justice violated - Penalty under section 271(1)(c) imposed without proper opportunity - Failure to mention charge for penalty - Imposition of penalty challenged - Non-compliance with notices - Addition to total income due to unproved share capital - Appeal to set aside ex-parte order - Similar facts and contentions in other appeals.

Analysis:
The Assessee filed three appeals against separate orders of the Ld. CIT(A)-3, Gurgaon, with the main grievance being the passing of an ex-parte order without proper opportunity for the Assessee to be heard. The Assessee challenged the imposition of a penalty under section 271(1)(c) without specifying the charge for the penalty, alleging illegality and lack of justification. The Assessee's failure to comply with notices and unproved share capital resulted in an addition to the total income. The Ld. CIT(A) confirmed the Assessing Officer's action ex-parte, citing non-appearance of the Assessee despite hearing notices. The Assessee, represented by a Resolution Professional, contended that no hearing notice was served, questioning the justification of the ex-parte order. The Tribunal observed the violation of the principle of natural justice and remanded the case to the Ld. CIT(A) for fresh adjudication after providing a reasonable opportunity to the Assessee.

In the other appeals for the A.Y. 2010-11 & 2011-12, similar facts and contentions were present as in the appeal for the A.Y. 2005-06. Therefore, the Tribunal's decision to set aside the ex-parte order and provide a fair hearing to the Assessee applied mutatis mutandis to these appeals as well. Consequently, all appeals of the Assessee were allowed for statistical purposes, emphasizing the importance of upholding principles of natural justice and ensuring due process in tax matters.