Ex-Parte Dismissal of Appeal and the Right to an Effective Hearing before the Commissioner (Appeals)
Summary in Key Points:
- The Commissioner (Appeals) dismissed the assessee’s appeal ex-parte because the assessee didn’t appear for the hearing despite being served with notices.
- The assessee argued that they didn’t receive proper notice of the hearing.
- The court emphasized that a hearing before the Commissioner (Appeals) isn’t just a formality, but a crucial opportunity for the assessee to present their case and for the principle of natural justice to be upheld.
- The court found no evidence that the notices were duly served to the assessee, indicating a lack of effective opportunity for the assessee to be heard.
Analysis:
The court decided to remand the matter back to the Commissioner (Appeals) to provide the assessee with an effective hearing, ensuring that the principles of natural justice are followed.
IN THE ITAT MUMBAI BENCH ‘A’
Alps Construction
v.
ITO
B.R. BASKARAN, Accountant member
and Raj Kumar Chauhan, Judicial member
and Raj Kumar Chauhan, Judicial member
IT Appeal NO. 3953 (MUM) of 2024
[Assessment Year 2017-18]
[Assessment Year 2017-18]
JANUARY 3, 2025
Ajay Singh and Akshay Pawar, Ld. ARs for the Appellant. Ram Krishna Kedia, Ld. DR for the Respondent.
ORDER
Raj Kumar Chauhan, Accountant Member. – The aforesaid appeal is filed by the appellant/assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”],passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 06.11.2023 for the A.Y. 2017 8, wherein the Ld. CIT(A) has dismissed the appeal ex parte as despite services of notice, the assessee failed to present its case before the Ld. CIT(A).
2. An application for condonation of delay has been filed by the appellant/assessee stating that statistically there is delay of 216 and narrated the reasons for filing the appeal after the due date as under:-
16. The entire compliance of income tax department is handled by our chartered accountant and therefore my brother was assured about the compliance of any notices that were received from income tax department.
17. On enquiry made by brother with our Chartered Accountant, he checked on the website of income tax about the status of appeal preferred by us for assessment year 2017-18 and informed him about the order passed by CIT APPEAL – NATIONAL FACELESS APPEAL CENTRE on 6th November 2023, and also downloaded copy thereof and handed over to my brother.
18. On further enquiry being made by my brother with the Charted Accountant, for future course of action, we have been advised that the appeal is required to be filed with ITAT Mumbai, within a period of 60 days from 6th November 2023, however, the period of 60 days from the date of Order passed under section 250 of the Act by CIT APPEAL, NATIONAL FACE APPEAL CENTRE, have expired and therefore the present appeal is being filed with prayer for condonation for delay in filing an appeal under section 253 of the Income Tax Act.
19.I say that, the order of CIT(A)- NFAC, was passed on 6th November 2023 and was uploaded on the website on the same day and served on registered email id and accordingly the last day for filing an appeal u/s 253 of the Act, was 6th January 2024. However the appeal is being delayed and filed on 8th August 2024. Thus there is a delay of 216 days.
20.1 further say that, the entire series of events narrated herein above has caused delay in filing the present appeal before ITAT, however the said delay is neither deliberate nor with any malicious intention. The default, if any, was due to the bonafide inadvertent mistake an circumstances beyond the control of the Appellant.
3. The application is supported by affidavit of the assessee. The assessee put reliance upon the judgment of the Hon’ble Supreme Court in the case of Collector, Land Acquisition v. MST. Katiji& Ors., [1987] 167 ITR 471 (SC),dated 19.02.1987, was pleased to hold regarding the condonation of delay as under:
“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making of justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that:
1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.”
4. We have heard the Ld. AR on behalf of the assessee and Ld. DR on behalf of the revenue. The Ld. DR supported the judgment of the Ld. CIT(A). we have considered the arguments and examined the record.Since the assessee has filed affidavit in support of condonation of delay and no contradictory facts has been brought on record by the revenue to the effect that contents of the affidavit are false, we find it expedient in the interest of justice that the assessee has shown sufficient cause for condonation of delay in filing the appeal before us. The delay in filing the appeal is accordingly condoned.
5. It was argued on behalf of the appellant/assessee that the notice issued by the Ld. CIT(A) were never received or served upon the assessee and as such they could not present its case before the Ld. CIT(A) who proceeded ex parte and decided the appeal on merit without giving effective opportunity of hearing to the assessee and as such the assessee was prevented from presenting its case before the Ld. CIT(A). Therefore, the impugned order suffers from illegality and liable to be set aside. The Ld. DR on the other hand supporting the judgment of the Ld. CIT(A) stating that there is no merit in the appeal and same is liable to be dismissed.
6. We have considered the rival submissions.Section 250 sub section 2(a) of “the Act” provides as under:
“Section 250 (2) The following shall have the right to be heard at the hearing of the appeal: –
a. The appellant, either in person or by an authorised representative;”
7. It is evident from the provision that the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice. We have examined the impugned order and in para no. 5 of the Ld. CIT(A) observed as under: –
5. Appellate Findings:
4.1 During the course of appellate proceedings, appeal notices were issued to the appellant on 31.12.2020, 29.08.2022 and 06.10.2023 fixing the case for 06.01.2021, 13.09.2022 and 23.10.2023 respectively at e-mail id kalokhandwala@gmail.com and mustansir.lokhandwala@gmail.com which are Primary Email Id as per Latest Return filed. In this regard, the appellant has not filed any written submission as well as not given any satisfactory evidence in support of grounds of appeal, hence the case is being decided on merits.
8. It is thus evident from the contents of the impugned order extracted above that no effective opportunity of hearing has been given and there is no proof that the notice sent on various dates were duly served or brought to the notice of the appellant/assessee.
9. For these reasons, we are of the considered opinion that matter needs to be restored to the file of the Ld. CIT(A) for giving effective hearing to the assessee who shall present its case before the Ld. CIT(A) within 60 days. The impugned order is accordingly set aside and appeals filed by the assessee are allowed in above terms.
10. In the result, appeal filed by the assessee is allowed for statistical purposes.