1004 Day Delay Condoned: ITAT Kolkata Criticises Lack of Hearing, Remands Case for Fresh Consideration

The ITAT Kolkata recently decided two appeals filed by an assessee. The cases involved delays, a lack of representation, and multiple ex parte orders passed by tax authorities. Overall, the tribunal allowed one appeal and quashed the other.

The assessee, Ram Kishor Mandal, had filed the present two appeals, challenging two orders dated March 02, 2022, and August 21, 2024, passed by the PCIT and the CIT(A), NFAC Delhi, respectively, for the Assessment Year 2017-18.

During the hearing before the ITAT Kolkata, the assessee (Ram Kishor Mandal) claimed the impugned assessment order was passed without granting an opportunity of hearing (ex parte). Further submitted that all the impugned notices sent by the Income Tax Department were sent to his Chartered Accountant (CA), and he did not inform him.

The assessee only became aware of the tax proceedings after the demand notices were issued to him, which ultimately caused a delay of 1004 days in filing the appeals. The tribunal condoned the delay in the interest of justice despite no complaint or affidavit being submitted against the CA and highlighted that fairness should prevail over technicalities. 

When the tribunal analysed the facts of the case, it noted that the original assessment and revision proceedings were completed without hearing the assessee, which is an explicit violation of the principles of natural justice. The tax authorities had identified issues such as unexplained cash deposits in multiple bank accounts. The assessee argued that the Section 263 revision order does not fall under the scope of the limited investigation, but the Tribunal did not accept this argument, pointing out that the assessee’s non-cooperation restricted proper examination during assessment.

The tribunal held, “We grant one more opportunity to the assessee to substantiate his case, and the issues in ITA No. 98/Pat/2015 are restored to the file of the Assessing Officer for re-adjudication after granting the assessee adequate opportunity of being heard.”

As a result, the Tribunal sustained the revision order under Section 263 and dismissed one appeal of the assessee. However, considering that the final assessment and appellate orders were also passed ex parte, the tribunal decided to send the case back to the tax authorities for fresh consideration and directed them to, this time, grant the assessee a fair opportunity to represent his case. In conclusion, one appeal was dismissed, while the other was partly allowed for statistical purposes.