Tribunal Cannot Decide Appeal Ex-Parte On Merits Without

Tribunal Cannot Decide Appeal Ex-Parte On Merits Without Verifying Proper Service Of Hearing Notice

Issue

Whether the Income Tax Appellate Tribunal (ITAT) can proceed ex-parte and decide an appeal on merits without confirming that a notice of hearing was duly issued and served upon the appellant as required under Rule 20 of the ITAT Rules, 1963.

Facts

Ex-Parte Order by Tribunal: The ITAT proceeded to hear and decide the appeal on merits in an ex-parte manner against the appellant.
Non-Service of Notice: No notice of the hearing was served upon the appellant prior to the disposal of the appeal.
Failure to Ascertain Service: The Tribunal proceeded with the matter without verifying or ascertaining whether any notice of hearing had been formally issued and received by the appellant.
Appeal to High Court: The appellant filed an appeal before the High Court under Section 260A challenging the ex-parte order passed by the Tribunal.

Decision

Violation of Statutory Rules: In favor of Assessee. Proceedings conducted without issuing and serving a notice of hearing constitute a total non-compliance with Rule 20 of the Income Tax (Appellate Tribunal) Rules, 1963.
Failure of Justice: In favor of Assessee. Deciding an appeal ex-parte without verifying proper service results in a manifest failure of justice and violates the core principles of natural justice (audi alteram partem).
Setting Aside & Remand: Matter remanded. The impugned ex-parte order passed by the Tribunal was set aside, and the appeal was restored to the file of the Tribunal for fresh adjudication on merits in accordance with the law after serving due notice to the appellant.

Key Takeaways

Mandatory Compliance with Rule 20: The ITAT is legally required to ensure that notice of hearing is validly served on the appellant before taking up an appeal for hearing.
Restriction on Ex-Parte Adjudication: The Tribunal lacks jurisdiction to decide an appeal ex-parte on merits if service of notice remains unverified or unserved.
Primacy of Natural Justice: Procedural fairness and the right to be heard cannot be bypassed; failure to serve hearing notices automatically vitiates the resulting judicial or quasi-judicial order.

HIGH COURT OF DELHI

Airports Authority of India

Deputy Commissioner of Income-tax

Dinesh Mehta and Rajneesh Kumar Gupta, JJ.

IT Appeal No. 499 of 2026
CM APPL. No. 41706 & 41707 of 2026

AUGUST 10, 2026

Ruchesh Sinha and Ms. Monalisa Maity, Advs. for the Appellant. Puneet Rai, SSC, Ashwini Kumar and Rishabh Nangia, JSCs for the Respondent.

ORDER

1. By way of the present appeal under Section 260A of the Income Tax Act, 1961 which has been preferred by the appellant against order dated 02.02.2026 passed in Appeal No. 2408/Del./2017 Airports Authority of v. DCIT by Income Tax Appellate Tribunal Bench ‘F’ Delhi (hereinafter referred to as ‘Tribunal).

2. Mr.Ruchesh Sinha, learned counsel for the appellant submitted that the Tribunal has firstly erred in proceeding ex-parte and then, rejecting the appeal on merit.

3. While taking the Court through the ordersheets, which the appellant has placed on record (Annexure A-6), learned counsel pointed out that on 08.09.2025, the Bench did not assemble and office had adjourned it to 30.10.2025; on 30.10.2025 also, the Bench did not function and thus, the hearing was adjourned to 24.12.2025; on 24.12.2025, the Bench did not function as well, and the case got adjourned to 02.02.2026. And on 02.02.2026, the members of the Tribunal took up the appeal for hearing and proceeded to dispose of the appeal ex-parte, without inquiring as to whether the notice of hearing was issued/served.

4. Mr.Sinha, learned counsel for the appellant asserted that the appellant did not receive any notice of hearing and thus, the Tribunal has erred in deciding the appeal on merit.

5. Inviting court’s attention towards assertion made in Para 11 of the memo of appeal, learned counsel argued that without issuance of any notice of hearing, the Tribunal ought not to have proceeded to decide the appeal that too on merit.

6. Mr.Puneet Rai, learned Senior Standing Counsel could not refute the appellant’s contention that no notice of hearing was issued to the appellant. He, however, submitted that since the appeal has been decided on merit, the appeal be decided on the merits of the issues involved.

7. Heard learned counsel for the parties.

8. On perusal of the impugned order, we find that the same has been passed ex-parte, without hearing the appellant.

9. On perusal of the ordersheets of the proceedings which the appellant have placed before us, we find that the Tribunal has committed a procedural irregularity. It is apparent that on three previous dates, viz. 08.09.2025, 30.10.2025 and 24.12.2025, the Tribunal did not function and the matter was adjourned or date was given by the Office of the Tribunal.

10. On 24.12.2025, when the matter got adjourned to 02.02.2026, as contented out by the appellant, no notice of hearing was issued to the appellant. Without ascertaining as to whether the notice has been issued and served or not, the learned members have proceeded to hear the appeal and decide it on merit.

11. We may bring to the notice of all concerned that Rule 20 of the Income Tax (Appellate Tribunal) Rules, 1963 (hereinafter referred to as ‘The Rule of 1963’) which clearly provides that the Tribunal shall intimate parties about the date and time of hearing of the appeal. It will not be out of place to reproduce Rule 20 of the Rule of 1963 which reads as under:-

“Rule 20 – Date and place of hearing of appeal, how fixed.

The date and place of hearing of the appeal shall be fixed with reference to the current business of the Tribunal and the time necessary for the service of the notice of appeal, so as to allow the parties sufficient time to appear and be heard in support of or against the appeal.”

12. In the absence of the service of notice upon the appellant, we are of the view that there has been a complete non-compliance with Rule 20 of the Rules of 1963 and consequently, manifest failure of justice. Hence, the order passed by the Tribunal on 02.02.2026 is clearly contrary to law.

13. We, therefore, set aside the order dated 02.02.2026 and restore the appeal to the Tribunal, to be decided afresh in accordance with law.

14. The Tribunal shall intimate fresh date of hearing to both the parties and thereafter, hear the appeal in accordance with law without being influenced by the previous order which has been passed in absentia.

15. The appeal stands allowed. All pending applications stand disposed of.