ITAT Remands Tax Matter to AO After Finding Natural Justice Violation and CIT(A)'s Failure to Examine Appeal on Merits :

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, in the case of Cairnhill Development Private Limited, has restored the assessment proceedings to the file of the Assessing Officer (AO) for fresh assessment after observing that the Commissioner of Income Tax (Appeals) [CIT(A)] had passed an ex parte order without deciding all the grounds of appeal on merits.

The assessee had challenged the assessment order dated November 26, 2018, passed under Section 144 of the Income Tax Act, 1961, before the CIT(A). However, the CIT(A) dismissed the appeal through an order dated December 12, 2025. Aggrieved by this decision, the assessee approached the ITAT.

Before the Tribunal, the assessee submitted that it could not properly comply with the requirements of the lower authorities. It further argued that the CIT(A) had not examined all the grounds of appeal on merits and had passed an ex parte order in violation of the principles of natural justice.

The Departmental Representative opposed the appeal, contending that the assessee was a habitual defaulter who had failed to comply with the directions of the lower authorities. Therefore, the orders passed by the AO and CIT(A) did not require any interference.

After considering both sides, the Tribunal observed that the CIT(A) had passed an ex parte order without deciding all the grounds of appeal on merits (without considering the assessee's contentions). Consequently, in interest of natural justice, the Tribunal concluded to restore the matter to the AO for fresh consideration.

The Assessing Officer (AO) had been instructed to pass a fresh reasoned and speaking order after granting the assessee a proper opportunity of hearing. Further, the assessee has been directed to participate in the assessment proceedings without fail. Accordingly, the appeal was partly allowed for statistical purposes.