Cairnhill Development Private Limited Vs ITO (ITAT Kolkata)
CIT(A)’s Failure to Decide All Grounds on Merits Leads to Fresh Assessment: ITAT Kolkata
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, restored an assessment to the Assessing Officer after finding that the Commissioner of Income Tax (Appeals) had passed an ex parte order without deciding all grounds of appeal on merits. Although the assessee had failed to comply fully with proceedings before both authorities, the Tribunal considered a fresh assessment appropriate in the interest of justice.
In Cairnhill Development Private Limited v. ITO, Ward-1(1), Kolkata, the Tribunal directed the Assessing Officer to provide an opportunity of hearing. It simultaneously directed the assessee to participate in the assessment proceedings without fail.
Case Details and Procedural Background
The decision was delivered in ITA No. 1425/KOL/2026 by Judicial Member Yogesh Kumar U.S. and Accountant Member Rakesh Mishra. The matter was heard on 26 October 2026, and the order was pronounced on 28 October 2026.
The cause title and page headers identify the relevant assessment year as 2016-17. However, the opening paragraph refers to Assessment Year 2022-23. The order also contains differing references to the date of the CIT(A)’s order: the opening paragraph mentions 10 June 2026, while the factual discussion identifies it as 12 December 2025.
These inconsistencies should be kept in view when referring to the procedural particulars. The Tribunal’s substantive findings and directions concern the assessee’s non-compliance, the disposal of the first appeal and the need for fresh assessment proceedings.
Tribunal Condones 49-Day Delay
The assessee’s appeal before the Tribunal was filed with a delay of 49 days. It submitted an application seeking condonation and explaining the reasons for the delay.
The Tribunal accepted the reasons stated in that application and condoned the delay, allowing the appeal to be considered further.
The order does not reproduce the explanation contained in the condonation application. Accordingly, the decision records acceptance of the reasons furnished without setting out the particular circumstances responsible for the delayed filing.
Assessment Completed Under Section 144
The Assessing Officer had passed an assessment order on 26 November 2018 under Section 144 of the Income Tax Act, 1961, making certain additions.
Aggrieved by that assessment, the company approached the CIT(A). According to the factual discussion in the Tribunal’s order, the first appeal was dismissed by an order dated 12 December 2025.
The assessee then challenged the appellate order before the Tribunal. The Tribunal’s order does not specify the nature or quantum of the additions made during assessment. Its consideration centred on the manner in which the proceedings had been conducted and the grounds of appeal addressed.
Assessee Challenges Ex Parte Disposal
The assessee’s authorised representative submitted that the company could not make proper compliance before either the Assessing Officer or the CIT(A).
It was further argued that the CIT(A) had failed to decide all the grounds raised in the appeal. The assessee contended that the impugned ex parte order violated the principles of natural justice and sought relief from the Tribunal.
The challenge therefore involved both the assessee’s inability to participate properly in the earlier proceedings and the appellate authority’s failure to adjudicate every ground on its merits.
Revenue Cites Repeated Non-Compliance
The Departmental Representative opposed the appeal and described the assessee as a chronic defaulter that had not complied properly before the lower authorities.
The Revenue maintained that the Assessing Officer and the CIT(A) had passed their respective orders in accordance with law. Relying on those orders, it argued that no interference was warranted and requested dismissal of the appeal.
The Tribunal thus considered the assessee’s request for another opportunity alongside the Revenue’s objection concerning its repeated failure to participate in proceedings.
Tribunal Orders De Novo Assessment
After hearing both sides and examining the available material, the Tribunal recorded that the CIT(A)’s order was ex parte and that the assessee had not participated in the appellate proceedings.
It also specifically found that the CIT(A) had not decided all grounds of appeal on merits. At the assessment stage too, the assessee had failed to make full compliance.
Considering these circumstances together, the Bench restored the matter directly to the Assessing Officer for de novo assessment. It directed that an opportunity of being heard must be provided before a fresh assessment order is passed in accordance with law.
The direction was accompanied by an express obligation on the assessee to participate without fail.
Outcome and Significance
The appeal was partly allowed for statistical purposes. The Tribunal did not adjudicate the correctness of the additions or grant substantive relief against any particular addition.
The decision provides another opportunity for examination of the assessment while requiring the assessee’s cooperation. It also highlights the importance of deciding all appellate grounds on merits, even where the proceedings involve non-participation by the taxpayer.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present Appeal is filed by the Assessee against the order of the NFAC, Delhi ‘Ld. CIT(A)’ for short) dated 10.06.2026, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2022-23.
2. There is a delay of 49 days in filing the present Appeal. Assessee filed an application for condonation of delay explaining the cause for the delay. For the reasons stated in the application for condonation of delay, the delay of 49 days in filing the present Appeal is hereby condoned.
3. Brief facts of the case are that, an Assessment Order came to be passed u/s 144 of the Act on 26.11.2018 by making certain additions. Aggrieved by the Assessment Order dated 26.11.2018, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 12.12.2025, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 12.12.2025, Assessee preferred the present Appeal.
3. The Ld. Counsel for the Assessee submitted that the Assessee could not make proper compliance before the Assessing Officer and before the Ld. CIT(A). The Ld. CIT(A) has not decided all the Grounds of the Appeal of the Assessee and the ex-parte order impugned came to be passed in violation of principals of natural justice. Thus, sought for allowing the Appeal.
4. The Ld. Department’s Representative submitted that the Assessee is a chronic defaulter who has not made proper compliance before the Lower Authorities, therefore, both the Assessing Officer as well as the Ld. CIT(A) have passed the respective orders in accordance with law, which requires no interference, thus by relying on the orders of the Lower Authorities sought for dismissal of the Appeal.
5. We have heard both the parties and perused the material available on record. The impugned order of the Ld. CIT(A) is ex-parte, wherein the Assessee has not participated in the proceedings and the Ld. CIT(A) has not decided all the Grounds of Appeal on its merits. Even before the Assessing Officer, Assessee has not made full compliance. In view of the above, in the interest of justice, we deem it fit to restore the issue to the file of the Assessing Officer for de-novo assessment. Needless to say, the Assessing Officer shall provide opportunity of being heard to the Assessee before passing the assessment order in accordance with law. The Assessee is also directed to participate in assessment proceedings without fail.
6. In the result, Appeal of the Assessee is partly allowed for statistical purposes.
Order pronounced on 28.10.2026.
