ITAT Restores Appeal for De Novo Adjudication After Ex-Parte Dismissal by CIT(A)

ITAT Restores Appeal for De Novo Adjudication After Ex-Parte Dismissal by CIT(A)

The assessee, a senior citizen aged around 80 years, filed an appeal against an order passed under Section 250 of the Income Tax Act, 1961, which confirmed additions made during reassessment. The appeal before the Tribunal was delayed by 200 days. In an affidavit seeking condonation of delay, the assessee explained continuous medical treatment, lack of technological knowledge, and non-receipt of notices. It was submitted that he became aware of the appellate order only while consulting a Chartered Accountant during routine filing in 2025.

For the relevant assessment year, the assessee had filed a return declaring income of Rs. 31,11,540. Reassessment proceedings were initiated based on information regarding the receipt of Rs. 11,96,995 as a hardship allowance from a developer and the purchase of property worth Rs. 6,71,83,812. The AO treated the hardship allowance as taxable and the property investment as unexplained income under Section 69. The assessee contended that the hardship allowance was a capital receipt and that the property belonged to his son. The CIT(A), however, passed an ex-parte order confirming the additions.

Issue Raised: Whether the ex-parte dismissal of the appeal by the CIT(A) without adjudicating on merits, despite the assessee’s explanation for non-compliance, was sustainable.

ITAT’s Decision: The Tribunal condoned the delay in filing the appeal, holding that sufficient cause was demonstrated due to age, medical reasons, and lack of technological proficiency. It found that the CIT(A) had decided the matter ex parte solely due to non-appearance, without examining the merits of the case or the evidence submitted.

Observing that the assessee was now represented and intended to contest the matter, and in the interests of justice, the Tribunal set aside the ex-parte order of the CIT(A) and restored the matter to the file of the CIT(A) for de novo adjudication on merits. The Tribunal directed that the ld. CIT(A) shall afford the assessee a reasonable opportunity of hearing and may call for any remand report from the AO relating to the submissions made by the assessee, and the assessee was directed to appear on all future dates.

Therefore, the appeal was allowed for statistical reasons, while other grounds raised were left open for adjudication by CIT (A) and AO.

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