Assumed Service of notice when it not received back was not proof of service on the assessee – ITAT

Assumed Service of notice when it not received back not accepted by ITAT as proof of service on the assessee. Order of CIT(A) remanded holding that assessee was prevented by reasonable and sufficient cause for not appearing

ABCAUS Case Law Citation:
ABCAUS 2657 (2018) (12) ITAT

The appeal by the assessee was directed against the ex-parte order passed by the CIT(A) in dismissing the appeal ex-parte for non-prosecution on account of non-compliance to the two notices issued for hearings.

The case of the assessee was taken up for scrutiny and the assessment concluded u/s 143(3) of the Income Tax Act, 1961 ( the Act ) wherein the assessee’s income was determined by making an an addition by the assessing officer (‘AO’) in respect of unexplained cash deposits in the assessee’s bank account.

Aggrieved by the order of assessment, the assessee filed an appeal before the CIT(A) which was dismissed as above. The assessee, being aggrieved by the ex-parte order filed an appeal before the Tribunal.

The assessee assailed the impugned ex-parte order of the CIT(A) as being bad in law and against the principles of natural justice. It was contended that the CIT(A) erred in concluding that the assessee is not interested in pursuing the appeal and dismissing the appeal for non-prosecution.

It was further submitted that even otherwise, the CIT(A) ought to have disposed off the appeal on merits.

It was also argued that the assessee was prevented by reasonable and sufficient cause for not appearing before the CIT(A) in the two hearings fixed, as the notices said to be issued were not received by the assessee.

The Tribunal observed that as stated by the assessee, the reason for non-appearance for the hearings was because the aforesaid notices were never received by him. On the other hand, the CIT(A) in the impugned order assumed that the two notices were served on the assessee since the notices were not received back by his office.

The Tribunal observed that no proof could be adduced by the Department to establish that the said two notices were served on the assessee. Neither any proof had been placed on record to establish service of the aforesaid notices on the assessee nor the issue of dispute had been decided on merits.

The Tribunal opined that since no proof was placed before it by the Revenue to establish that the notices were served by the office of the CIT(A) on the assessee, the assessee was prevented by reasonable and sufficient cause for not appearing for hearings before the CIT(A).

Thus in the interest of substantial justice, the Tribunal set aside the impugned ex-parte order of the CIT(A) and restored the matter to the file of the CIT(A) to hear and decide the assessee’s appeal afresh on merits, after affording the assessee adequate opportunity of being heard

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