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CIT(A) cannot affirm action of AO ex parte without giving reason for confirming the same on merits

The Income Tax Appellate Tribunal Kolkata bench recently pronounced that Assessing Officer cannot pass an ex parte order without mentioning any reason for confirming the addition on merits under the Income Tax Act, 1961.

Nikhil Ghosh Vs. Income Tax Officer (ITAT Kolkata)

CIT(A) affirmed the action of Assessing Officer ex parte without mentioning any reason for confirming the same on merits. The provisions of Section 250(6) of the Act require the Commissioner (Appeal) to dispose of the appeal in writing with reasoning. But, we find from the impugned order of Ld. CIT(A) who confirmed the order of AO without deciding the same on merit. We also find in the interest of justice and fair play Ld. CIT(A) should have given another opportunity to the assessee to appear before him to explain his points of contentions. Therefore, in this view of the matter, we are inclined to remit the matter back to the file of Ld. CIT(A) with the direction to decide the issue raised by assessee on merit after giving reasonable opportunity of being heard to assessee. It is needless to say that the assessee should co-operate in the appellate proceeding. Hence, this ground of assessee’s appeal stands allowed for statistical purpose.

Full Text of the ITAT Order is as follows:-

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-Jalpaiguri dated 05.02.20 15. Assessment was framed by JCIT, Malda Range u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 22.03.2013 for assessment year 2010-11.

2. At the outset, Ld AR for the assessee draw our attention that the appeal is barred by limitation by 341 days due to illness of Ld. advocate and who subsequently expired on 04.02.2017 in this regard assessee filed an affidavit which reproduced here under:-

I, Nikhjil Ghosh, son of Rabilal Ghosh aged 59 years by religion Hindu, residing at village-Mahanadipur, Malda, do hereby solemnly affirm and state as follows-

1. That I am the proprietor of M/s United Trading

2. That I being aggrieved with assessment order dated 22.03.2013 filed appeal before the Ld. CIT(A).

3. That the said appeal was dismissed by the Ld. CIT(A) by passing an ex-parte order due to non appearance of anyone on the dates fixed for hearing before the Ld. CIT(A).

4. Tht Shri Laxmi Narayan Sinha Roy, Advocate, resident of Farm Side, Post-Chinsurah, District-Hooghly was engaged in the instant matter to appear before the Ld. CIT(A) and I was under the bona fide belief that proper compliances were mad from the end of the said Shri Laxmi Narayan Sinha Roy, Advocate.

5. That after receipt of the order of the Ld. CIT(A) on 09.03.2015 it came to my knowledge that no compliance was made by the said Shri Laxmio Naryan Sinha Roy, Advocate.

6. That on verification, it was found that Shri Laxmi Naryan Sinha Roy, Advocate was very ill during the relevant period and thus, no compliances could be made by him. It later transpired that the said advocate expired on 04.02.2017.

7. That I give an undertaking that proper compliances shall be made in case the above mentioned case is sent back to the file of the Ld. CIT(A).

8. That the facts stated in paras 1 to 6 are true to the best of my knowledge and belief and paragraph 7 is an undertaking given by me.”

Therefore the ld. advocate could not file the appeal within due date for the assessee and so condonation of delay with supported affidavit of assessee’s Ld. Counsel is filed.

3. Ld. DR for the Revenue has not raised any objection for the delay of condonation. Hence, in view of above stated facts we condone the delay and to proceed to hear the appeal.

4. At the outset, it was observed that the case was fixed for hearing on several occasions before the ld. CIT-A but none appeared on behalf of assessee. Therefore, the appeal was decided by Ld. CIT(A) as ex parte on 5.02.20 15. Against the impugned ex parte order of Ld. CIT(A) assessee filed an appeal before us and filed an affidavit 27-10-2017 which reads as under:-

“I, Nikhil Ghosh, son of Rabilal Ghosh, aged 59 years; by religion Hindu, residing at Village- Mhanadipur, Malda, do hereby solemnly affirm and state as follows-

1. That I am the proprietor of M/s United Trading. I am competent to swear this affidavit.

2. That the order passed u/s. 250 of the Act by the Ld. CIT(A) was received by me on 09.03.2015.

3. That suddenly I had to go out of station after receiving the said order on 03.2015 for some urgent business purpose and I had to remain out of station during the period 10.04.2015 to 31.05.2015.

4. That I returned back to my home town on 01.06.2015. Then I went to Advocate’s office on or around 02.06.2016 and handed over the relevant papers to Sri Hardayal Prasad, Advocate for the purpose of filing appeal.

5. That Sri Hardayal Prasad, Advocate asked for some more documents which were handed over to him on or around 10.06.2016.

6. That due to renovation work, some files, including file of my case were misplaced in the office of the said Sri Hardayl Prasad, Advocate. It took a long time of about nine months when the misplaced file was located at the time of cleaning work held at the chamber of Sri Hardayal Prasad, Advocate on 20.03.2016 (Sunday).

7. That the said Sri Hardayal Prasad, Advocate drafted appeal by 05.04.2016.

8. That the appeal papers were sent to me on or around 09.04.2016 and after my approval and signing formalities, I sent the same back to the said Sri Hardayal Prasad, Advocate on 10.04.2016.

9. That the appeal papers were lodged in the office of the Ld. Income Tax Appellate Tribunal on 13.04.2016 after a delay of 400 days.

10. That the facts stated in paras 1 to 9 are true to the best of my knowledge and belief.”

As such, it was pleaded before us for one more opportunity may be considered to appear before the ld. CIT(A).

5. On perusal of appellate order, we find that Ld. CIT(A) affirmed the action of Assessing Officer ex parte without mentioning any reason for confirming the same on merits. The provisions of Section 250(6) of the Act require the Commissioner (Appeal) to dispose of the appeal in writing with reasoning. But, we find from the impugned order of Ld. CIT(A) who confirmed the order of AO without deciding the same on merit. We also find in the interest of justice and fair play Ld. CIT(A) should have given another opportunity to the assessee to appear before him to explain his points of contentions. Therefore, in this view of the matter, we are inclined to remit the matter back to the file of Ld. CIT(A) with the direction to decide the issue raised by assessee on merit after giving reasonable opportunity of being heard to assessee. It is needless to say that the assessee should co-operate in the appellate proceeding. Hence, this ground of assessee’s appeal stands allowed for statistical purpose.

6. In the result, for statistical purpose, the appeal of assessee is treated as allowed.

Order pronounced in open court on  17/11/2017

Categories: Income Tax
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