Srishti Resident Welfare Association vs ACIT Noida: Reconsideration of Assessment Order for AY 2015-16

Srishti Resident Welfare Association vs ACIT Noida: Reconsideration of Assessment Order for AY 2015-16

The case of Srishti Resident Welfare Association, located at T-6/803, Parsvanath Prestige-II, Plot No. 2, Sector-93-A, Noida, Uttar Pradesh, versus the Assistant Commissioner of Income Tax, Circle-3, Noida, was addressed by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘SMC’ on January 5, 2021. The appeal, numbered ITA 6468/DEL/2019, was filed on August 2, 2019, challenging the assessment order issued for the assessment year 2015-16.

The primary contention of the appellant, Srishti Resident Welfare Association, was that they were not properly served with notices during the assessment and appellate proceedings. The assessment order in question was passed by the Assessing Officer (AO) on October 3, 2017, under Section 143(3) of the Income Tax Act, 1961. The appellant challenged this order before the Commissioner of Income Tax (Appeals) [CIT(A)], Noida, who noted several procedural lapses in the assessment order but ultimately dismissed the appeal, creating confusion and contradiction in the appellate order.

Contradictions in the CIT(A)’s Order

In the appellate proceedings, the CIT(A) observed that key documents, such as the impugned assessment order, the demand notice, and the challan for the fee deposited for filing the appeal, were not available on the official website of the department. Several notices issued to the appellant were returned unserved, with the postal authorities indicating that no such person was available at the given address. Despite these discrepancies, the CIT(A) went ahead with the appellate proceedings.

Interestingly, in paragraph 108 of the appellate order, the CIT(A) acknowledged that the assessment order was defective in law and needed to be annulled on merits. The CIT(A) even issued a direction to the AO under Section 150 of the Income Tax Act to reopen the assessment and pass a new order. However, in a contradictory move, the CIT(A) also confirmed the impugned assessment order in paragraph 111 and dismissed the appeal.

Lack of Notice and Opportunity for Hearing

The appellant, represented by Shri K. Prasanna, contended that the CIT(A) passed the order without providing them with an opportunity to be heard. The lack of proper notice service and the contradictory conclusions in the CIT(A)’s order led to significant procedural unfairness. The appellant argued that the order should be set aside and the matter reconsidered, with due opportunity for the appellant to present their case.

ITAT’s Decision and Direction for Reconsideration

The ITAT, after hearing the arguments and reviewing the case file, found merit in the appellant’s contentions. The Hon’ble Judicial Member Shri Bhavnesh Saini noted that the order passed by the CIT(A) was indeed contradictory and that the appellant had not been given a fair chance to present their case. The ITAT emphasized the importance of ensuring that all procedural requirements, including the proper service of notices, are met to uphold the principles of natural justice.

As a result, the ITAT set aside the impugned appellate order and remanded the case back to the CIT(A), Noida. The ITAT directed the CIT(A) to reconsider the appeal in accordance with the law, ensuring that the appellant is given a reasonable and sufficient opportunity to be heard. The ITAT also stressed that the CIT(A) should address the contradictions in the earlier order and provide a clear and reasoned decision.

Conclusion

The case of Srishti Resident Welfare Association vs ACIT, Noida underscores the importance of proper notice service and the need for clarity and consistency in appellate orders. The ITAT’s decision to remand the case for reconsideration reflects its commitment to ensuring that taxpayers are treated fairly and that all legal procedures are diligently followed.

The order was pronounced in the open court on January 5, 2021, with the decision duly recorded and communicated to both parties involved. The case will now be re-evaluated by the CIT(A), Noida, with a fresh opportunity for the appellant to present their case.

Srishti Resident Welfare Association vs ACIT Noida: Reconsideration of Assessment Order for AY 2015-16