ITAT sets aside CIT(A)’s order, provides opportunity for proper hearing in ITA No. 2572/Mum/2023.

Case Name:

Vrajlal Umedlal Jhaveri vs. ITO, Ward-17(3)(5) - ITA No. 2572/Mum/2023 (A.Y. 2011-12)

Key Takeaways:

1. The ITAT set aside the order of the CIT(A) and restored all the issues for adjudication on merits.
2. The CIT(A) dismissed the appeal in limine due to the assessee’s failure to respond to the notices.
3. The assessee argued that he was not aware of the notices as they were posted in the income tax portal.
4. The ITAT held that the CIT(A) should have decided the issues on merits based on the available material.
5. The failure to provide proper hearing to the assessee violated the principles of natural justice.
6. The ITAT directed the CIT(A) to provide the assessee with another opportunity to present his case properly.

Case Synopsis:

The Income Tax Appellate Tribunal (ITAT) Mumbai “F” Bench, Mumbai, consisting of Justice C.V. Bhadang (President) and Shri B.R. Baskaran (Accountant Member), heard the case of Vrajlal Umedlal Jhaveri vs. ITO, Ward-17(3)(5) in ITA No. 2572/Mum/2023 for the assessment year 2011-12. The appeal was filed by the assessee against the order dated 26.5.2023 passed by the Commissioner of Income Tax (Appeals) [CIT(A)]-National Faceless Appeal Centre, Delhi.

The learned counsel representing the assessee argued that the CIT(A) had dismissed the appeal in limine without deciding the issues on merits. The reason given by the CIT(A) for dismissing the appeal was the assessee’s failure to respond to the notices issued by him. However, the assessee contended that he did not receive any physical notice as all the notices were posted in the income tax portal, and he was not aware of them.

After hearing the arguments of both parties and examining the record, the ITAT observed that the CIT(A) had dismissed the appeal in limine due to the assessee’s failure to respond to the notices. However, the ITAT noted that the notices were posted in the income tax portal, and the assessee was not aware of them. The ITAT held that the CIT(A) could have decided the issues on merits based on the available material. Moreover, the ITAT emphasized that the failure to provide proper hearing to the assessee violated the principles of natural justice.

In the interest of natural justice, the ITAT set aside the order passed by the CIT(A) and restored all the issues to his file for adjudication on merits. The ITAT directed the CIT(A) to provide the assessee with another opportunity to present his case properly. The ITAT also instructed the assessee to be vigilant and fully cooperate with the CIT(A) for the expeditious disposal of the appeal.

In conclusion, the ITAT allowed the appeal filed by the assessee for statistical purposes and directed the CIT(A) to reconsider the issues on merits after affording adequate opportunity of being heard to the assessee.

FAQ:

Q1: What was the appeal about?

A1: The appeal was filed by the assessee challenging the order passed by the CIT(A) for the assessment year 2011-12.

Q2: Why did the CIT(A) dismiss the appeal?

A2: The CIT(A) dismissed the appeal in limine as the assessee did not respond to the notices issued by him.

Q3: What was the argument of the assessee?

A3: The assessee argued that he was not aware of the notices as they were posted in the income tax portal.

Q4: What did the ITAT decide?

A4: The ITAT set aside the order of the CIT(A) and restored all the issues for adjudication on merits, citing a violation of principles of natural justice.

Q5: What was the direction given by the ITAT?

A5: The ITAT directed the assessee to be provided with another opportunity to present his case properly before the CIT(A).

The assessee has filed this appeal challenging the order dated 26.5.2023 passed by the learned CIT(A)-National Faceless Appeal Centre, Delhi and it relates to A.Y. 2011-12.

2. At the outset, the learned counsel appearing for the assessee submitted that the learned CIT(A) has dismissed the appeal in limine, without deciding the issues urged before him on merits on the reasoning that the assessee did not respond to the notices issued by him. The Learned AR submitted that the assessee is an aged man and no physical notice was issued to him. All the notices were posted in the income tax portal and the assessee was not aware of those notices. Accordingly he prayed that, in the interest of natural justice, all the issues may be restored to the file of the learned CIT(A) for adjudicating them on merits.

3. We heard learned DR and perused the record. We noticed that the learned CIT(A) was constrained to dismiss the appeal in limine, since the assessee did not respond to the notices issued by him. It is the submission of learned AR that the notices were issued in the income tax portal and hence the assessee was not aware about them. Accordingly, it was submitted that the assessee could not comply to the notices issued by the learned CIT(A).

4. In our view, the Ld CIT(A) could have decided the issues on merits on the basis of material available on record. In any case, in the absence of proper hearing given to the assessee, there is violation of principles of natural justice. Accordingly, we are of the view that, in the interest of natural justice, the assessee may be provided with one more opportunity to present his case properly before the learned CIT(A).

5. Accordingly we set aside the order passed by the learned CIT(A) and restore all the issues to his file for adjudicating them on merits, after affording adequate opportunity of being heard to the assessee. We also direct the assessee to be vigilant and fully cooperate with the learned CIT(A) for expeditious disposal of the appeal.

6. In the result, the appeal filed by assessee is treated as allowed for statistical purposes.

Order pronounced in on 30.10.2023,

Sd/- Sd/-

(Justice C.V. Bhadang) (B.R. Baskaran)

President Accountant Member

Mumbai.; Dated : 30/10/2023