KAMLA DEVI,SIKAR V. ITO WD-3,SIKAR, SIKAR

MA 15/JPR/2025

AI Insights

The case involves Kamla Devi, the appellant, who filed a Miscellaneous Application under section 254(2) of the Income Tax Act against an ex-parte order by the ITAT, Jaipur. The original appeal was dismissed due to non-appearance and alleged delay in filing, without considering the assessee's adjournment request or the condonation of delay application being prepared. The Tribunal acknowledged the oversight and the violation of natural justice, leading to the decision to recall the ex-parte order and remand the case for a fresh assessment on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314312 (ITAT-JAIPUR)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: Colonisers vs. ACIT [1992] 41 ITD 57 (Hyderabad) (SB), Honda Siel Product Ltd. v/s CIT (2007) 295 ITR 466 (SC), Khusalchand B. Daga V, ITO (1972) 85 ITR 48 (Bom.) (HC), CIT v. Gheru Lal Bal Chand [2003] 269 ITR 386 (P&H) (HC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY VC
• Assessee Lawyers: DEVANG GARGIEYA
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Search and seizure; Non compliance; Audi alteram partem
• Section: 144; 132

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM MA No. 15/JP/2025 (Arising out of vk;dj vihy la- ITA No. 386/JP/2024) fu/kZkj.k o\"kZ@Assessment Year : 2018-19 Kamla Devi Shikshak Bhawan, Charan Singh Colony, Nawalgarh Road, Sikar cuke Vs. The ITO Ward-03 Sikar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGZPD 4071 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Devang Gargieya, Adv. jktLo dh vksj ls@ Revenue by : Shri Gautam Singh Choudhary (JCIT-VC) a lquokbZ dh rkjh[k@ Date of Hearing : 03/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 05/05/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The present Miscellaneous Application has been filed by the assessee u/s 254(2) of the Act against the order of ITAT, Jaipur Benches, Jaipur in ITA No. 886/JP/2024 dated 31.07.2024 praying therein following reasons to suitably modified or recalled of its order: “MAY IT PLEASE YOUR HONOURS, 1. That the above appeal of the assessee was decided ex-parte by this Hon’ble ITAT vide its order dated 31.07.2024 (received by assessee on MA No. 15/JP/2025 Kamla Devi vs. ITO 2 07.10.2024) for A.Y. 2018-19. A copy of the ITAT order is enclosed herewith for ready reference at (PB 1-4). 2. That in the said order, there are certain glaring and patent mistakes apparent from the face of the record, which are rectifiable u/s 254(2) of the Act. These mistakes are submitted herein below: Mistake 1: The Hon’ble ITAT at Page 1, Para 2.1, stated that none appeared called out for hearing. However, it is respectfully submitted that the Hon’ble ITAT did not provide any adequate and reasonable opportunity to the appellant of being heard. In fact, on very first date of hearing, the assessee had sought an adjournment vide letter dated 24.07.2024 (PB-5) and e-mail sent to the hon’ble bench on dated 24.07.2025(PB-6) due to genuine and unavoidable reasons. However, despite the adjournment application being submitted within the stipulated time, the Hon’ble ITAT proceeded to hear the matter ex-parte and passed impugned order against the assessee, ignoring the request. Mistake 2: The fact finding recorded by the Hon’ble ITAT at Page 2, Para 2.3, states that: “2.3 The Bench has heard the Id. DR and perused the materials available on record. It is noted that there is inordinate delay on the part of the assessee in filing the appeal for which no application for condonation of delay in filing the appeal has been filed by the assessee before the Bench. Hence, in this view of the matter, the Bench feels that the assessee not serious in timely filing the appeal before the Bench and it is also noted that the assessee was also not serious in pursuing the appeal before the Ld. CIT(A). In view of the above facts and circumstances of the case, the appeal of the assessee is dismissed on the ground of inordinate delay in filing the appeal. Thus, the appeal of the assessee is dismissed.” It is respectfully submitted that though the appeal was filed delayed but due to bona fide reasons beyond the control of the assessee, and in fact the A/R of the assessee had even prepared and kept the application for the condonation of delay, explaining the reasons and circumstances that led to the delay for onward submission, and the same was only pending for signature from the assessee. In the mean while the Hon’ble ITAT without providing reasonable opportunity passed an ex-parte order. Thus, not only the ld. CIT(A) but even the Hon'ble ITAT has seriously violated the principle of natural justice by adversely commenting and in MA No. 15/JP/2025 Kamla Devi vs. ITO 3 dismissing the appeal by confirming the order of the CIT (A) only on the aspect of the delayed filing absolutely without giving any opportunity at all to hear the assessee. 3.1. Thus, no reasonable opportunity was provided to the assessee to respond to the said hearing (First hearing date) date. In this regard, the Hon’ble Apex Courts have time and again held that a reasonable opportunity of hearing which is sine qua non and imperative for the statutory authority to afford before passing the order or decision. Hear the other party or the rule of fair hearing or the rule that no one should be condemned unheard. This principle is the basic concept of principle of natural justice. This expression implies that a person must be given opportunity to defend himself. This principle is sine qua non of every civilized society. 3.2. The law is well settled that in a case where there is a violation of Principles of natural justice and a party has been deprived of its valuable rights of being heard effectively yet, such an order has to be considered as having been done without jurisdiction and vitiating the entire order which, results into as nullity and is not case of mere irregularity. Kindly refer Colonisers vs. ACIT [1992] 41 ITD 57 (Hyderabad) (SB) [1993] 45 TTJ 114 (Hyderabad) (SB) holding that: “In the preceding paragraphs it has been indicated why the assessee's version cannot be rejected as regards the credits appearing in his books. Perhaps the only justification, if at all it can be called a justification, for the ITO to reject the credits as not genuine is the failure of the assessee to produce the creditors when called upon to do so by the ITO. At this stage it is but necessary to state the circumstances in which the assessee was unable to produce the creditors. We are concerned with the asst. yr. 1985- 86. For the first time the ITO called upon the assessee to produce the creditors by his letter dt. 7th March, 1988 which was served on the assessee on 9th March, 1988. The rules of natural justice operate as implied mandatory requirement, non-observance of which amounts to arbitrariness and discrimination. The principles of natural justice have been elevated to the status of fundamental rights guaranteed in the Constitution of India as is evident from the decision of the Full Bench of the Hon'ble Supreme Court in the case of Union of India vs. Tulsiram Patel & Ors. reported in AIR 1985 SC 1416 at 1469, holding that the principle of natural justice have thus come to be recognised as being a part of the guarantee contained in Article 14 of the Constitution of India because of the new and dynamic interpretation given by the Supreme Court to the concept MA No. 15/JP/2025 Kamla Devi vs. ITO 4 of equality which is the subject-matter of that Article and that violation of principles of natural justice by a State action is a violation of Article 14. A quasi-judicial or administrative decision rendered or an order made in violation of the rule of audi alteram partem is null and void and the order made in such a case can be struck down as invalid on that score alone (Maneka Gandhi vs. Union of India AIR 1978 SC 597; Gangadharan Pillai vs. ACED: (1980) 126 ITR 356 (Ker): (1978) 8 CTR (Ker) 352 at pp. 365 to 367). In other words, the order which infringes the fundamental principle, passed in violation of audi alteram partem rule, is a nullity. When a competent Court or authority holds such an order as invalid or sets it aside, the impugned order becomes null and void. (Nb. Khan Abbas Khan vs. State of Gujarat AIR 1974 SC 1471 at 1479). In the light of these decisions, we do opine that the addition made by the Assessing Officer in violation of the principles of natural justice has to be set aside as void only in so far as the additions by way of cash credits alone are concerned, which are separable from the other additions in the order that are not challenged and consequently becoming thus non est in the eye of law.” 4.1. At this juncture, it shall be useful to refer Honda Siel Product Ltd. v/s CIT (2007) 295 ITR 466 (SC), wherein it was held that: \"---------- when prejudice result from an order attributable to the Tribunal’s mistake, error or omission, then it is the duty of the Tribunal to set it right. Atonement to the wrong party by the court or Tribunal for the wrong committed by it has nothing to do with the concept of inherent power review. In the present case, the Tribunal was justified in exercising its power under Sec.254(2) when it was pointed out to the Tribunal that the decision of the co- ordinate Bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material which was already on record. The Tribunal has acknowledged its mistake, it has accordingly rectified its order. --------\" 4.2. In Khusalchand B. Daga V, ITO (1972) 85 ITR 48 (Bom.) (HC), the Bombay High Court held that the Tribunal should not allow a party to suffer for its own mistake of passing ex parte order due to non- appearance of assessee and such an order is amenable to rectification under Section 254(2) of the Act. 4.3. In CIT v. Gheru Lal Bal Chand [2003] 269 ITR 386 (P&H) (HC), it was held that where the Tribunal decided the case against the assessee ex parte, setting aside such an ex parte order on the ground that the assessee could not attend the hearing of the case for valid reason would not amount to review. MA No. 15/JP/2025 Kamla Devi vs. ITO 5 Hence it is humbly prayed that the subjected order dated 31.07.2024 may kindly be recalled to suitably correct the above mistakes which go to the root of issue in hand and oblige. 5. An affidavit of the appellant in support of the contention is enclosed herewith and marked as \"ANNEXURE-1\". 6. A challan dated 31/01/2025 of Rs.50/- showing payment towards the fee prescribed is enclosed herewith and marked as \"ANNEXURE-2\". 2. The ld. AR of the assessee submitted that the bench has disposed of the appeal of the assessee on the first time hearing listing disposed of ex-parte the appeal of the assessee, even though prior to the hearing, the assessee filed an adjournment application the reason behind filing that application was that the assessee was in process of filing condonation petition in delay for filing the appeal of the assessee and therefore, the assessee was preparing that condonation petition and affidavit thereto and thereby the appeal of the assessee has been disposed of without giving him proper opportunity being heard. 3. On the other hand, ld. DR supported the order of ITAT, Jaipur (supra) praying that the assessee wants to get ITAT’s order reviewed in the grab of Miscellaneous Application. MA No. 15/JP/2025 Kamla Devi vs. ITO 6 4. Heard both the parties and perused the material available on record. The bench prima facie noticed that the appeal of the assessee was dismissed on account of non-appearance and the bench while disposing of the appeal noted that the assessee has not filed written submissions / arguments, controverting the order of ld. CIT(A) and ultimately same was dismissed without giving an opportunity of being heard to the assessee. Ld. AR of the assessee in support submitted that the matter was fixed for hearing before the Bench 26-06-2024 but he had sent request for adjournment through email at [e-mail]. on 20-06-2024 at 11.01 AM, since assessee was out of India at that time, and could not contacted and appointed an authorized representative by signing power of attorney to appear before Hon'ble Bench. Therefore, the order of the bench is against the principle of natural justice and therefore, this mistake being apparent on record of not discussing the adjournment application made by the assessee and the merits of the case. Therefore, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing an opportunity of being heard to the assessee. Based on MA No. 15/JP/2025 Kamla Devi vs. ITO 7 this observation, the Miscellaneous Application filed by the assessee is allowed. 5. Now after recalling the order the case needs to be decided on merits afresh. 6. Ld. AR of the assessee referring to Rule 24 of ITAT rule which says that the appeal of the assessee if decided ex-parte then the merits of the case is required to be dealt with and since all the orders were ex-parte to decide the issue on merits the matter require remand back to the ld. AO. So far as to the cost issue assessee has already paid the required appeal filling fees. 7. On the other hand ld. AO did not objected to set aside the case to the file of the ld. AO. 8. Heard the parties perused the record. The bench noted that in this case the assessee has filed the ITR for an amount of Rs. 2,30,830/-. Because of the search and seizure action u/s. 132 of the Act in the Prince Group certain documents were found and therefore, the case of the assessee based on the information MA No. 15/JP/2025 Kamla Devi vs. ITO 8 received was subjected to proceeding u/s. 153C of the Act and subsequently due to non compliance by the assessee, assessment was finalised u/s. 144 of the Act determining income at Rs. 6,51,520/-. The bench noted that in this case against the returned income of 2,30,830/- assessed income was determined at Rs. 6,51,520/-, considering the prayer of the assessee that his case at all stage has not been represented property see needs a chance to be heard on merits. The bench also noted that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee in that perspective of the matter we considered that prayer of the assessee. Thus, considering overall facts of the case and peculiar facts of the case, we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter and charge the correct income in hands of the assessee if so to be taxed in accordance with law after affording due opportunity to the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO. MA No. 15/JP/2025 Kamla Devi vs. ITO 9 9. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the light of the above discussion, we allowed the Miscellaneous Application filed by the assessee and after recalling the said ex-party order of ITAT in ITA No. 886/JP/2024 dated 31/07/2024, we consider the appeal of the assessee based on the discussion so recorded here in above. In the result, Miscellaneous Application as well as appeal of the assessee are allowed as indicated herein above. Order pronounced in the open Court on 05/05/2025 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 05/ 05/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Kamla Devi, Sikar MA No. 15/JP/2025 Kamla Devi vs. ITO 10 2. izR;FkhZ@ The Respondent- ITO, Ward-03, Sikar 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (MA No. 15/JP/2025) vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar "