ITAT Sets Aside Ex-Parte Orders for Denial of Fair Hearing Opportunity

The assessees, Rajesh Suhas Verenkar and his spouse Riya Rajesh Verenkar, were engaged in civil construction and related activities in Goa. A search and seizure action was conducted on 19.03.2019, during which incriminating material suggested that only a portion of business receipts was routed through bank accounts, while the remaining income was kept outside books or routed through family members’ accounts.

The Assessing Officer initiated proceedings under Sections 153A/153C and made additions by estimating suppression of income. The Commissioner (Appeals), however, dismissed the assessees’ appeals ex parte after issuing multiple notices with short response time and fixing common hearing dates for several appeals. Aggrieved by the dismissal without proper hearing, the assessees approached the Tribunal.

Central Issue: Whether the ex-parte orders passed by CIT(A) without granting a reasonable and effective opportunity of hearing are sustainable in law, and whether issuance of multiple notices with short response periods and common hearing dates across several appeals amounts to a violation of the principles of natural justice.

Tribunal Held: The ITAT set aside the ex-parte orders passed by the CIT(A) and remanded the matter for fresh adjudication. The Tribunal observed that although multiple notices were issued, the time granted to the assessees was unreasonably short and did not constitute a real and effective opportunity of hearing. It was noted that several appeals were fixed on the same dates with limited response time, making it impractical for the assessees to properly present their case.

The Tribunal held that such an opportunity was merely procedural and not meaningful, thereby violating principles of natural justice. At the same time, the Tribunal also noted that the assessees had attempted to file documents and submissions through the e-portal but failed to properly bring them on record before the CIT(A). Although considering that the orders were passed ex-parte without examining available material, the Tribunal deemed it appropriate to restore the matter. Therefore, the impugned orders were set aside, and all appeals were remanded back to the CIT(A) for de novo adjudication with directions to pass a reasoned and speaking order after granting an adequate opportunity of hearing.

To Read Full Order, Download PDF Given Below