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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 17.09.2025 of Learned Commissioner of Income Tax (Appeals), Chennai [hereinafter referred to as the “CIT(A)”], passed u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] wherein the appeal of the asse ssee was dismissed and addition made by the AO vide Assessment Order dated 24.12.2019 u/s 68 of the Act wer e confirmed.
Brief facts as culled o ut from the proceedings are that assessee is a proprietorship concer n doing busine ss in the name and style of M/s Imag ins Ltd. for wholesale trading of footwear. The assesseee e-filed return on 30.10 .2 017 declaring income of Rs.3,07,980/-. The case was selected for scrutiny thro ugh CASS fo r complete scr utiny and according ly notice u/s 143(2) of the Act was issued on 13.08.2019 along with questionnaire. The assessee has filed reply with r espect to the each questions part of the questionnaire. However, the AO was not satisfied w ith the explanation and proceed ed to make additio n of Rs.40,98,100/- in respect to sundry creditors, namely M/s Ashirwad Footwear, further addition of Rs.50,07,482/- u/s 68 was made on account of unexplained sundry creditors in respect o f M/s Shoe Agency. The further additio n of Rs.3,71,000/- u/s Section 68 of the Act was made in respect of M/s Lifestyle on the ground that the identity and genuineness of the said party could not be established. The AO further made additio n of Rs.18,0 3,321/- in respect of firm M/s Ekans Retail. Further, the AO made further additio n of Rs.84,35,500/- alleged deposite d during the demonetization period.
Aggrieved by the said additions, the assessee preferred appeal before the ld. C IT(A) who has dismissed the same ex-parte on the ground that assessee has failed to produce any docume nt or make any submissions in response to the notice issued .
We have heard the learned AR and the ld. DR. We have heard the ld. DR who has supported the judgment of the ld. CIT(A) stating that the assessee has failed to avail the opportunity give n by the ld. C IT(A) and therefore prayed for dismissal of the appeal.
We have considered the submission made on behalf of the Revenue and examined the impugned order. It would be cle ar from the observation of the ld. CIT(A) contained in para 4 .1 onward, extracted below that the ld. CIT(A) has not followed the principle of natural justice and opportunity of effective hearing has no t been given:
“4.1The appeal was filed by the appellant on 10-01-2020 against the Assessment Order u/s 143(3) of the Act dated 24-12-2019. I connection to the appeal, opportuni ties were provided to the appellant t substantiate his grounds o f appeal on following dates:
Sr. No. Date of hearing(s) 1 07-01-2021 2 14-02-2023 3 27-02-2023 4 05-04-2023 5 14-07-2025 6 09-09-2025 The appellant r eplied on 12-01-2021 se eki ng adj ournment, however no fur ther s ubmissions were made. Agai nst all other notices there was no re sponse from t he appellant. In t he view of above, it evident t hat the a ppellant is not i nterested in filing any detai ls duri ng the proceedings and avail t he opportunity under the principle of natural j usti ce. In res ponse to the notices iss ued, even adjo ur nment was not so ught. In such situation, the only concl usi on whic h can be drawn tha t the a ppellant is not i nter est ed i n purs ui ng the appeal.”
We have co nsidered the rival submission and examined the record, Section 250(2)(a) lays down as under:
“250(2 ) The fol lo wing shall have the right to be heard at the heari ng o f the appeal-
(a)the appellant, either i n person or by an authori zed repres entative;”
Thus, the hear ing mandated by Section 250(2)(a) of the Act is no t a mere formality but a mandatory statutory requirement for following the principle of natur al justice by the quasi-judicial authority.
In view of the ab ove facts and circumstances, it is evident that the impugned order has been passed w ithout effective hearing and principle of natural justice has no t b een followed For these reaso ns, the impug ned order is not maintainable and according ly set aside. T he end of justice shall be met in case the matter is restored to the file of the Ld. CIT(A) for deciding the issue afresh by affording an effective o pportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Ld. CIT(A) w ithin the period of 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purposes.