Dhingra Projects Pvt Ltd vs. ACIT on Ex Parte Appeal Adjudication: ITA 742/DEL/2021

Case Overview

In ITA No. 742/Del/2021, Dhingra Projects Pvt Ltd appeals against the decision of the Commissioner of Income Tax (Appeals), New Delhi, regarding the assessment year 2015-16. This appeal highlights significant procedural flaws in the handling of the case by the CIT(A), particularly the ex-parte disposal of the appeal without adequate representation from the assessee.

Background

The appellant faced significant organizational challenges due to the ill health and subsequent death of its chief functionary, leading to an operational halt and unattended legal notices. This contributed to a substantial delay in filing the appeal against the CIT(A)’s decision, which was initially made on 18.02.2019. The Tribunal acknowledged these challenges and admitted the appeal for adjudication after condoning a delay of 772 days.

Principal Issues in Dispute

The primary dispute revolves around the addition of Rs. 9,26,17,197 under Section 68 of the Income-tax Act, 1961, characterized as unexplained cash credit by the Assessing Officer. This addition significantly inflated the assessed income compared to the loss reported by the assessee in its return.

Tribunal’s Decision

The Tribunal, recognizing the need for a fair hearing, set aside the ex-parte order of the CIT(A) and remanded the matter for de-novo adjudication. The Tribunal emphasized the importance of providing the assessee a reasonable opportunity to present its case and directed the assessee to cooperate fully in the proceedings.

Conclusion and Implications

The restoration of the matter to the CIT(A) underscores the Tribunal’s commitment to ensuring that justice is served through proper procedural conduct. This case serves as a precedent for the importance of administrative fairness and the rights of taxpayers to a fair hearing, particularly in complex cases involving substantial additions to income.

Dhingra Projects Pvt Ltd vs. ACIT on Ex Parte Appeal Adjudication: ITA 742/DEL/2021