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Judgment
ORDER
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 03.11.2025 of ld. CIT(A)/NFAC passed u/s 250 of the Inco me T ax Act, 1961 (hereinafter re ferred to as “the Act”) wherein the addition of Rs.16,64,642/- was made by the AO vide assessment order dated 27.03.2023 were confirmed.
The facts of the case are that the assessee is an individ ual deriving income from house property, business income, and capital gains. In response to a notice issued u/s 148 of the Act, the assessee filed return of income declaring a total income of Rs.92,028/-. The assessme nt was comple ted by the Assessing Officer under sections 144/148 of the Act determining the total income at Rs. 17,56,670/-. Further, the Assessing Officer initiated se t-aside proceedings and issued various notice s u/s 142(1) along with show-cause no tices. Although the assessee partly complied with the notices issued, the Assessing Officer held that the claim of cost o f improvement amounting to Rs.13,40,000/- was not supported by verifiable documentary evidence. Accor dingly , the Assessing Officer disallowed the claim of cost of improvement and added the indexed amount of Rs. 16,64,642/- to the total income of the asse ssee.
Aggrieved by the assessment order, assessee filed appeal before the ld. CIT(A) which was dismissed ex-pate on the ground that the appellant has failed to respond to the various notices sent as find mentioned in para 5 of the impugned order.
Aggrieved by the impugned appellate ex-parte order, the assesse is in ap peal before us and has raised the fo llowing grounds of appeal:
“1 . That on the facts and circumstanc es of t he cas e and in the law t he Assess ment Unit Income Tax department grossly erred in maki ng a dditi on of Rs. 16,64,642 bei ng the i ndexed c os t of impr oveme nt i ncurred by the assessee with r espect to property which was already sold long ago.
2.That on the facts and circumstanc es of t he cas e and in the law t he Assess ment Unit Income Tax department grossly erred in maki ng a dditi on of Rs. 16,64,642 bei ng the i ndexed c os t of impr oveme nt i ncurred by the assessee without appreciating that the cost of improvement as incurr ed by the assessee was contribut ed by clos e relativ es of as sessee whos e contributi ons by way of gift to t he assess ee for her requirement is e xempt from taxation under the provisions of first proviso t o section 56(1 )(v) of the Income t ax Act, 1961.
3.That on the facts and circumstanc es of the cas e and in t he law the Assessment order u/s 144 as framed by Assessment Unit dated 27/03 /23 assessi ng t he i ncome at Rs. 17,56,670 is bad i n l aw and the same deserves to be quashed i n the absence of iss uance of m andatory notice u/s 143(2) bef ore frami ng the ass ess ment. That the aforesaid grounds are i ndepe ndent and without prejudice to eac h other. ”
We have heard the lear ned AR and the learned DR. The Ld. AR would submit that the impugned order has resulted into miscarriage of justice as principle of natural justice has no t been fo llowed because no effective opportunity of hearing was given as the assessee had never received the notice after 30.09.2025 when ad journment was sought and therefore the matter may be restored to the file of the Ld. CIT(A) for deciding afresh. Learned DR on the other hand while supporting the judgment of the learned CIT(A) has left to the discretion of the court to consider the submissions of the assessee as per law.
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. 9. In the result, the appeal of the assessee is allowed for statistical purposes.