Natural Justice Challenge in Sangeeta Sehgal vs ITO – ITA No. 6256/DEL/2019 (Assessment Year 2011-12)

Case Overview: Sangeeta Sehgal vs ITO – ITA No. 6256/DEL/2019

Case Number: ITA 6256/DEL/2019

Appellant: Sangeeta Sehgal, Delhi

Respondent: ITO, Ward-36(5), New Delhi

Assessment Year: 2011-12

Order Type: Final Tribunal Order

Date of Order: 9th September 2021

Case Filed On: 23rd July 2019

Bench: SMT. DIVA SINGH, JUDICIAL MEMBER

Introduction

The case of Sangeeta Sehgal vs ITO revolves around the appellant’s challenge to the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], New Delhi, on 20th May 2019, for the assessment year 2011-12. The appellant, Sangeeta Sehgal, raised multiple grounds in her appeal, particularly invoking the principles of natural justice and arguing a lack of opportunity to present her case adequately. The appeal was heard by the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘SMC’, under the chairmanship of SMT. DIVA SINGH, Judicial Member.

Background of the Case

Sangeeta Sehgal, a resident of Delhi, challenged the additions made by the Assessing Officer (AO) under Section 2(22)(e) of the Income Tax Act, 1961. The AO had added certain amounts to her taxable income, which were subsequently upheld by the CIT(A). Dissatisfied with this outcome, the appellant filed an appeal with the ITAT, arguing that the CIT(A) did not consider the principles of natural justice and failed to provide her with a fair opportunity to contest the addition.

The appellant’s key contention was that the CIT(A) sustained the additions without adequately confronting her with the insufficiency of her written submissions. This, according to the appellant, amounted to a violation of her right to a fair hearing, a principle deeply rooted in the concept of natural justice.

Proceedings at the ITAT

The case was listed for hearing on 16th August 2021, with the order pronounced on 9th September 2021. During the hearing, the appellant did not appear, and the case was heard ex-parte based on the merits of the arguments presented by the respondent, represented by Senior Departmental Representative (DR), Sh. R.K. Gupta.

Grounds of Appeal

The appellant raised several grounds in her appeal, with the primary focus being on the breach of natural justice. Specifically, the appellant argued that:

• The CIT(A) failed to provide a proper opportunity to be heard before sustaining the additions made by the AO.
• The CIT(A) did not notify the appellant that her written submissions were considered insufficient for granting relief, which would have allowed her to make further representations or provide additional evidence.
• The failure to communicate this inadequacy and the subsequent decision to uphold the AO’s additions without further inquiry or discussion with the appellant violated the principles of natural justice.

Tribunal’s Findings

The ITAT reviewed the case file and the submissions made by the respondent. The Tribunal observed that the CIT(A) had indeed sustained the additions without informing the appellant of the perceived inadequacy of her written submissions. This failure, according to the ITAT, was a clear breach of natural justice, as it deprived the appellant of her right to a fair hearing.

The Tribunal emphasized that the principles of natural justice require that any inadequacy in submissions or evidence must be communicated to the concerned party, allowing them an opportunity to rectify or address the issue. In the absence of such communication, the party is denied a fair chance to present their case fully.

Moreover, the ITAT noted that the appellant’s right to be heard is not waived merely by the submission of written arguments. The adjudicating authority must ensure that the party is aware of any shortcomings in their submissions and provide a specific opportunity to respond before passing an adverse order.

ITAT’s Conclusion and Order

Based on the principles of natural justice and the facts presented, the ITAT concluded that the CIT(A) had erred in sustaining the additions without providing the appellant with a proper opportunity to address the inadequacies in her submissions. Consequently, the ITAT set aside the order of the CIT(A) and remanded the case back to the CIT(A) for a fresh examination.

The ITAT directed the CIT(A) to pass a speaking order after giving the appellant a reasonable opportunity to present her case in full. This includes the right to be heard in person, if necessary, and to provide any additional evidence or submissions required to support her case.

In conclusion, the ITAT allowed the appeal for statistical purposes and remanded the matter back to the CIT(A) for reconsideration, ensuring that the principles of natural justice are upheld throughout the process.

Final Judgment

The final judgment in the case of Sangeeta Sehgal vs ITO (ITA No. 6256/DEL/2019) underscores the importance of adhering to the principles of natural justice in tax proceedings. The Tribunal’s decision to remand the case back to the CIT(A) highlights the need for proper communication and the provision of a fair opportunity to the appellant to present her case.

The ruling serves as a reminder to tax authorities of the procedural safeguards that must be maintained to ensure justice is not only done but is seen to be done. The appellant, Sangeeta Sehgal, will now have the opportunity to present her case afresh before the CIT(A), with the assurance that her right to a fair hearing will be fully respected.

Bench: SMT. DIVA SINGH, JUDICIAL MEMBER

Order Pronounced On: 9th September 2021

Result: The appeal is allowed for statistical purposes, and the case is remanded back to the CIT(A) for a fresh examination with a focus on upholding natural justice.

Natural Justice Challenge in Sangeeta Sehgal vs ITO – ITA No. 6256/DEL/2019 (Assessment Year 2011-12)