ASHWANI DWIVEDI, BHILAI,DURG V. INCOME TAX OFFICER-1(3), BHILAI, DURG

ITA 498/RPR/2025

AI Insights

The case involves Ashwani Dwivedi, the proprietor of M/s. Vandana Steel Traders, who appealed against the order of the CIT(Appeals)/NFAC for the assessment year 2011-12. The appeal was initially time-barred by 179 days, attributed to the sudden departure of the assessee's accountant, which left him without guidance on legal and procedural compliance. The Tribunal found the delay to be circumstantial and not due to any deliberate or mala fide conduct by the assessee, thus condoning the delay. The primary issue was the non-compliance of the assessee in previous hearings, leading to ex-parte orders. The Tribunal, referencing several judicial precedents, emphasized the need for a fair hearing and the principles of natural justice, thus remanding the case for a fresh examination on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775264 (ITAT-RAIPUR)
• Duration Of Justice: 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2025
• Other Referred Cases: Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur, Inder Singh Vs. the State of Madhya Pradesh, Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal, Delhi Transport Corporation vs. DTC Mazdoor Union, Commissioner of Income Tax Madras v. Chenniyappa Mudiliar
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE GETTING; PRIYANKA PATEL
• Assessee Lawyers: RAVI AGRAWAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; TDS; Validity of assessment

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.498/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2011-12 Ashwani Dwivedi M/s. Vandana Steel Traders, Junwani Road, Pushpak Nagar, Bhilai-490 020 (C.G.), Dist. Durg PAN: AIAPD9101B .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-1(3), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Ravi Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 10.09.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 10.09.2025 Printed from counselvise.com 2 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 12.12.2024 for the assessment year 2011-12 as per the grounds of appeal on record. 2. At the very outset, it has been pointed out by the Ld. Counsel for the assessee that the appeal is time barred by 179 days. However, explaining the reasons for the said delay, the Ld. Counsel has filed condonation application as well as affidavit, wherein it is stated as follows: “1) The appellant is not well versed with accounting and tax laws and he was fully dependent on his accountant one Sri Santosh Yadav. Even the accountant Mr. Yadav had given his mail id also in the income tax forms. 2) That Mr. Yadav had left the job without pre intimating the appellant and therefore the appellant was put to a difficult situation for managing his accounting and taxation works. 3) That, the appellant could not get a good accountant for a long time and that is why the case has not been properly attended. 4) That the accountant Mr.Yadav used to contact the counsel for appeal matter and there was no proper guidance and advice from the counsel. The appellant relied upon his accountant in this matter. The counsel first advised to opt for VSVS (Vivad Se Vishwas Scheme), 2020 and filed some of the forms and thereafter, refused to opt for that. The appellant could not file his submissions before Ld. CIT(A). 5) That the delay in filing appeal is due to bonafide and genuine reasons.” Printed from counselvise.com 3 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 It was submitted by the Ld. Counsel for the assessee that the assessee is engaged in the business of iron, steel and cement and his turnover is below the statutory requirement as mandated u/s. 44AB of the Income Tax Act, 1961 ( for short ‘the Act’). The Ld. Counsel also submitted that the assessee is fully dependent on his accountant which is common practice to deal with the various financial matters and therefore, once the accountant left the job, the assessee was unable to comply with personally regarding the law of limitation without any advice which resulted to the aforesaid delay. 3. The Ld. Sr. DR submitted that as a matter of common practice for a businessman, there is a relation between businessman and the accountant with regard to filing of the appeal before the various forum. 4. Having heard the submissions of the parties herein on the ground of limitation, I am of the considered view that as contended in the affidavit, the said delay is absolutely circumstantial and there is no deliberate or malafide conduct brought on record before this bench by the revenue so to say that delay has been caused due to the assessee. Further, in so far the delay is concerned, I take guidance from the following judicial pronouncements viz. (i) Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31.01.2025; (ii) Jagdish Prasad Printed from counselvise.com 4 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025 and (iii) Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025. Accordingly, the said delay of 179 days involved in the present appeal is condoned. 5. That as evident from Paras 3 & 3.2 of the order of the Ld.CIT(Appeals) /NFAC, the assessee had not complied with on any date of hearing as issued through the hearing notices from the office of the Ld. CIT(Appeals)/NFAC. For the sake of completeness, the relevant Paras 3 & 3.2 of the order of the Ld. CIT(Appeals)/NFAC are culled out as follows: “3. Notices u/s.250 was issued to the appellant dated 07.01.2021, 13.01.2022, 07.10,2022, 20.04.2023, 02.02.2024 and 11.10.2024 the appellant were requested to file his reply in support of his claim. In response to this notice, the appellant filed his reply on 01.02.2022, 21.10.2022, 14.12.2022, 05.05.2023, 09.02.2024, 30.04.2024 and 18.10.2024. Response filed vide letter dated 18.10.2024 is reproduced here under: Printed from counselvise.com 5 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 3.2 There after the appellant has not filed any reply there after till date. It is pertinent to mention here and as evidence from the replies reproduced herein under, even on earlier dates also the appellant has merely submitted adjournment requests on one pretext or the other without filing any reply on merits. Thus, the assessee had always taken adjournment on one pretext or the other instead of substantiating grounds of appeal. The Ld. Counsel for the assessee submitted that some other counsel was looking after the matter before the First Appellate Authority and therefore, specifically he had no Printed from counselvise.com 6 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 idea as to the merits of those adjournment letters filed before the Ld. CIT(Appeals)/NFAC. However, he assured the Bench and made a statement at bar that if one final opportunity is provided to the assessee, then he shall comply with the hearing notices before the Ld. CIT(Appeals)/NFAC and furnish various evidences/submission to represent the matter on merits. 6. The Ld. Sr. DR has fairly conceded that the matter may be adjudicated denovo on merits before the first appellate authority providing one final opportunity to the assessee. 7. Having heard the submissions of the parties herein in the given facts and circumstances as per statement made by the Ld. Counsel regarding compliance before the Ld. CIT(Appeals)/NFAC, in the interest of substantive justice, request of the Ld. Counsel is accepted. At this stage, I herein observe that the ITAT, “Division Bench”, Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos. 1 to 6, 8 & 9/RPR/2025, dated 20.03.2025 had dealt with similar issue on the same parameters of ex-parte order passed by the Ld. CIT(Appeals)/NFAC and remanded the matter back to the file of the Ld. CIT(Appeals)/NFAC observing as follows: “7. We have considered the submissions of the parties herein and analyzed the facts and circumstances involved in all the captioned appeals. After careful perusal of the Printed from counselvise.com 7 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 documents on record, we find that the assessee had assailed the legal ground as aforestated, however, the fact of the matter is that on perusal of the respective orders of the Ld. CIT(Appeals) for all the years before us, it is also evident from Para 3 that there has been no compliance by the assessee before the said authority and as such, an ex-parte order was passed for the concerned years in appeal. Admittedly, as per record, sufficient opportunities had been provided to the assesse, however, there was no compliance by the assessee. In effect, rights and liabilities of the parties herein are yet to be adjudicated substantially at the level of the first appellate authority. Though in the impugned orders, discussion has been done as per material available on record by the Ld.CIT(Appeals) but they are only Form 35, statement of facts, grounds of appeal and the assessment order. However, due to non-compliance by the assessee, there are no submissions, evidence and documents submitted for adjudication by the assessee before the Ld. CIT(Appeals). That as per Para 3 of the Ld. CIT(Appeals) order, there has been no compliance on the part of the assessee for submitting detailed explanations regarding the grounds of appeal for the years under consideration which clearly shows that the grounds of appeal raised before the first appellate authority has not been substantiated on merits through corroborative evidence /submissions. 8. That in such scenario we are of the considered view that the Income tax Act is within the ambit of welfare legislation which are completely different from that of the penal legislation, therefore, benefit of doubt whenever arises, it has to be interpreted in favour of the assessee tax payer within the parameters of law and facts. There may be circumstances beyond control of the assessee because of which, the assessee may not have been able to represent his case on the given dates of hearing before the Ld. CIT(Appeals). Though it is correct that there was no compliance from the side of the assessee, however, nothing is there on record which suggests any deliberate non-compliance or malafide conduct of the assessee. That further, if one final opportunity is provided to the assessee to represent his case before the first appellate authority, the position of the revenue will also not be jeopardized. 9. Recently, the Hon’ble High Court of Bombay in the case of Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.), dated 04.02.2025 observed that in the case the Assessing Officer had passed an ex-parte order and when the matter Printed from counselvise.com 8 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex-parte due to non-compliance by the assessee’s authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex- parte by the Ld. CIT(Appeals)/NFAC which amounted to violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon’ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex-parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee. 10. In the aforesaid case, the Hon’ble High Court of Bombay had referred to a judgment of the Hon’ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi-alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India. 11. The Hon’ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits and not dismissed owing to the absence of the appellant. Printed from counselvise.com 9 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be adjudication on merits by the first appellate authority and one final opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice. 12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised such legal issue at the sub-ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex- parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld.CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex-parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the reason that as per framework of the Act, Ld.CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld.CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. CIT(Appeals), of course due to Printed from counselvise.com 10 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee. 13. In view thereof, we set aside the respective orders of the Ld. CIT(Appeals) for all the years and remand the same to their file for denovo adjudication on merits. At the same time, we direct the assessee that this being the final opportunity, there must be compliance on merits before the first appellate authority. Needless to say, the Ld. CIT(Appeals) shall provide reasonable opportunity of being heard to the assessee and pass an order in terms of Section 250(4) and (6) of the Act within three months from receipt of this order.” 8. Respectfully following the aforesaid order and as per examination of the facts in the case of the assessee, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication while complying with the principles of natural justice as per similar terms. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC and represent the matter on merits. Needless to say, the Ld. CIT(Appeals)/NFAC shall comply with the principles of natural justice while disposing of the matter. Printed from counselvise.com 11 Ashwani Dwivedi Vs. ITO-1(3), Raipur (C.G.) ITA No.498/RPR/2025 9. As per the aforesaid terms, the grounds of appeal raised by the assessee stands allowed for statistical purposes. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 10th day of September, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 10th September, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "