2021 (10) TMI 741 - AT - Income Tax

National Faceless Appeal Centre has passed the ex-parte order - No proper opportunity of being heard to the assessee - HELD THAT - We find that the CIT(A) has simply recorded in his second para 5.0, different dates of hearing fixed by him and the adjournment sought for by the assessee but he has not recorded categorically with respect to the reason mentioned behind taking adjournment. It is noted that the assessee Sought Adjournment from 21.07.2021 to 05.08.2021 because the Income Tax portal was not fully operational due to technical glitches as per evidence (APB, Pg.9). However, the CIT(Appeals), National Faceless Appeal Centre, Delhi on 28.07.2021 has passed the ex-parte order where there was no reference of the assessee s such request for adjournment made as above. In our view, there seems to be no deliberate attempt on the part of the appellant assessee, not to file the submissions before the National Faceless Centre and in fact, it may be on account of the fact that new Income Tax Portal of the assessee was not working as is apparent from various News items and, thus, the prayer of the assessee has merit that this matter may, please, be set aside to the file of CIT(A) for giving the fresh opportunity of being heard and deciding the issue on merits as per law. We are of the view that CIT(A) has not afforded proper opportunity of being heard to the assessee. We, therefore, set aside the order of the CIT(A) and restore the matter back to his file with the direction to readjudicate the appeal afresh on merit after affording opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues involved:
1. Proper opportunity of hearing not provided by Ld. Commissioner of Income Tax (Appeals)
2. Disallowance of claim u/s 54B
3. Ex-parte order passed without considering adjournment request
4. Affording opportunity of being heard to the assessee

Analysis:

Issue 1: Proper opportunity of hearing not provided by Ld. Commissioner of Income Tax (Appeals)
The appellant contended that the Ld. Commissioner of Income Tax (Appeals) erred in dismissing the appeal without providing proper opportunity of hearing. The appellant cited various reasons for seeking adjournments, including the lockdown due to Covid-19 and technical glitches in the new Income Tax Portal. The appellant argued that the orders passed were void abinitio due to lack of proper opportunity. The Hon'ble Supreme Court's order extending limitation periods was also highlighted. The Central Board of Direct Taxes had clarified the extension of limitation for filing appeals. The Tribunal noted that the appellant had not deliberately avoided filing submissions and set aside the order to allow a fresh opportunity for the appeal to be heard on merit.

Issue 2: Disallowance of claim u/s 54B
The Assessing Officer had disallowed the claim u/s 54B, reducing the deduction amount significantly. The appellant challenged this disallowance, arguing that the disallowance was against the factual circumstances of the case. The CIT(A) confirmed the disallowance, stating that the appellant had not cultivated the land for the required period to claim the deduction. The AO had verified the land cultivation with relevant authorities and determined the capital gains accordingly. The Tribunal observed that the appellant had not submitted material against the assessment order and had not fulfilled the conditions specified in section 54B. Consequently, the appeal on this ground was dismissed.

Issue 3: Ex-parte order passed without considering adjournment request
The appellant had sought adjournments due to various reasons, including the Covid-19 lockdown and technical issues with the new Income Tax Portal. Despite the adjournment request, the Ld. Commissioner of Income Tax (Appeals) passed an ex-parte order without considering the adjournment request made by the appellant. The Tribunal found merit in the appellant's argument that the matter should be set aside for a fresh opportunity to be heard and decided on merits as per law.

Issue 4: Affording opportunity of being heard to the assessee
The Tribunal concluded that the Ld. Commissioner of Income Tax (Appeals) had not provided proper opportunity of being heard to the assessee. The order was set aside, and the matter was restored back to the Ld. Commissioner of Income Tax (Appeals) for a readjudication of the appeal on merit after affording the opportunity of being heard to the assessee.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of providing a fair opportunity for the appellant to present their case and be heard before making a decision.