ITAT Restores Ex Parte Income Tax Appeals With Costs for Non-Cooperation

The assessee, Ms. Liz Hemangbhai Bhatt, filed four appeals before the ITAT arising from ex parte assessment orders passed under Section 144 of the Income Tax Act and corresponding penalty orders under Section 271(1)(c) for Assessment Years 2010-11 and 2011-12.

These appeals were directed against common appellate orders dated 20.03.2025 passed by the National Faceless Appeal Centre, whereby the CIT(A) dismissed the appeals for non-prosecution.

Main Issue: Whether the ex parte dismissal of appeals by the CIT(A), despite earlier Tribunal directions and procedural irregularities in service of notices, warranted another opportunity to the assessee for adjudication on merits.

ITAT Held: The Tribunal observed that although the assessee had been consistently non-cooperative, the appeals involved substantive issues relating to ex parte assessments and penalty proceedings. It further noted that in earlier proceedings, the assessee had filed additional evidence under Rule 46A and a remand report had also been obtained from the Assessing Officer, indicating that the matters required adjudication on merits.

The Tribunal decided to grant one final opportunity. The appeals were restored with directions to the Jurisdictional Assessing Officer to consider the additional documents and decide the matters afresh after granting a hearing. The Tribunal imposed costs of Rs. 10,000 each in the two quantum appeals and Rs.  5,000 each in the two penalty appeals, aggregating to Rs. 30,000, payable to the Income Tax Department. Subject to payment of costs, all appeals were allowed for statistical purposes.

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