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Judgment
PER RAJ KUMAR CHAUHAN (J.M.):
The appeal preferred by the assessee /appellant against the order of Learned Commissioner of Income Tax (Appeals)-29, New 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 17.11.2025 for the A.Y. 2018-19 wherein the appeal has been decided ex parte and the addition made of Rs. 15,37,500/- u/s 69C of the Act was confirmed.
The facts in brief, as culled out from the order of the authorities below are that the appellant/assessee e-filed return u/s 139(1) of the Act on 30.08.2018, declaring total income of Rs. 5,32,200/-. A search and seizure operation u/s 132 of the Act was carried out on 06.02.2019 in the case of Sanjay Jain. During the course of search, several incriminating documents both in hard copies of data as well as in the soft data were found and seized. Based on the information available on the records, a notice u/s 153C of the Act was issued to the assessee. In response, the assessee filed return of income declaring total income of Rs. 5,32,200/-, thereafter notice u/s 142(1) 0f the Act were issued along with questionnaire but despite affording ample opportunity, the assessee failed to establish the genuineness of the alleged transaction carried out with Sanjay Jain during the relevant year. The assessing officer concluded that the assessee had allegedly paid a cash amount of Rs. 15,37,500/- against the purchase of land from Sh. Sanjay Jain as per documents furnished by him. Hence, the addition of Rs. 15,37,500/-was made accordingly u/s 69C of the Act.
Aggrieved by the assessment order, the assessee filed appeal before the ld. CIT(A) who has dismissed on merit but ex parte on the ground that despite issuance of notice four times which is find mentioning para 4 of the impugned order, the assessee failed to file response, hence the assessment order was upheld and the addition made was confirmed.
Aggrieved by the impugned order, the assessee is in appeal before us and has raised following grounds as under:
“1.That in facts and circumstances of the case the Ld. CIT(A)has erred in law in passing ex-parte order u/s 250 of IT Act, 1961, hence, same may kindly be set aside to CTT(A) for re-adjudication.
2.That in facts and circumstance of the case the impugned order u/s 153C of Income Tax Act, 1961 dated 28th March 2023 is invalid and bad in law being as the same has been issued without a DIN, hence same is Non-est.
3.That in facts and circumstances of the case the Ld. Assessing Officer has erred in making the addition of Rs. 15,37,500/- to the returned income of the appellant as such assessing the income of the appellant at Rs. 20,90,700/- as against returned income of Rs. 5,53,200/-, hence addition made by the A.O. of Rs. 15,37,500/- may please be deleted.
4.That in facts and circumstances of the case the Ld. Assessing Officer has erred in making wrong presumption u/s 132(4) of Income Tax Act, 1961 considering documents pertaining to appellant which is devoid of merits of the case and law, hence assessment proceedings initiated is liable to be quashed
5.That in facts and circumstances of the case the Ld. Assessing Officer has erred in initiating proceedings u/s 153C of Income Tax Act, 1961 against the assessee in the basis of incomplete and vague satisfaction note without having mention of nature and content of seized material and basis of considering such seized material pertaining to / incriminating in nature, hence basic foundation of assessment proceedings is bad which bring such assessment proceedings to nullity.
6.That in facts and circumstances of the case the Ld. Assessing Officer has erred in completing the assessment proceedings without property considering the submissions of the appellant and without passing a speaking order which is sign qua non requirement of any assessment proceedings, hence the assessment completed is bad in law and additions made is liable to be deleted.
7.That in facts and circumstances of the case the Ld. Assessing Officer has erred in law in completing the assessment which is against the principle of natural justice by without providing the relevant information / material which was specifically asked by the appellant in his submission dated 20th march 2023, hence the assessment completed is bad in law and additions made is liable to be deleted.
8.That in facts and circumstances of the case the Ld. Assessing Officer has erred in making addition of Rs. 15,37,500/- without properly considering the submissions made by appellant and other facts of the case and completed the assessment with pre-conceive mindset which is against the principle of natural justice and procedure of law, hence addition made is liable to be deleted
9.That the appellant craves leave to add, amend, vary or withdraw any ground of appeal at any stage of the proceedings.”
We have heard the Ld. AR on behalf of the assessee and examined the record. The Ld. AR at the very outset submitted that the impugned order ex parte dismissal of the appeal has resulted into miscarriage of justice. It is further submitted that the notice issued by Ld. CIT (A) were never received as there is no proof in that regard and therefore prayed for restoring the case to the file of the CIT (A) for deciding afresh after giving an effective opportunity of the hearing.
Ld. DR, on the other hand, while supporting the judgment of the lower authorities, stating that the assessee miserably failed to present its case before them and does not deserve any relief, accordingly, the appeal is liable to be dismissed.
The Ld. DR fairly submitted that the impugned order is ex parte and Ld. Tribunal may in its discretion, if deems fit may restore the matter to the file of the Ld. CIT(A) for fresh adjudication.
We have considered the rival submissions and the material observation of the Ld. CIT(A) contained in para no. 4 which shows that the impugned order has been passed ex parte without affording effective opportunity of hearing which is evident from para 4 of the impugned order extracted below as under:
“4.During the course of appellate proceedings, the appellant was issued following notices, as under-
S. No. Date of issue of notice Date of compliance Remarks 01 23.04.2024 01.05.2024 No submission filed 02 24.10.2024 08.11.2024 No submission filed 03 29.01.2025 06.02.2025 No submission filed 04 10.09.2025 15.09.2025 No submission filed During the appellate proceedings, the appellant was provided numerous opportunities as tabulated above, by this office. But the appellant did not comply with the notices issued by this office. The Hon’ble Supreme Court in the case of Shri B.N.Bhattacharjee and another (118 ITR 461) has held that the appeal does not mean only filing of memo of appeal but also pursuing it effectively. In view of persistent non-compliance to the notices issued by the appellant I am left with no alternative but to proceed to adjudicate the appeal on the basis of material available, in a judicious manner.”
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 authorized representative;”
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.
It is evident from the contents of the impugned order as extracted above that no effective opportunity of hearing has been given to the assessee which violates the principle of natural justice and has thus resulted into miscarriage of justice. We have noticed that the impugned order is ex parte as there is no evidence to show that the notice sent on four occasions were served upon the assessee. It is thus clear that the Ld. Lower Authorities has passed the order without effective representation of the assessee and has thus failed in giving effective opportunity of hearing at the time of passing of the impugned order. For these reasons the impugned order is not sustainable and is accordingly set aside. The matter is accordingly restored to the file of the Ld. CIT(A) for deciding the matter de novo after giving an effective opportunity of hearing.
In the result, the appeal of the assessee is accordingly allowed as above terms for statistical purposes.