2025 (7) TMI 15 - AT - Income Tax

Reopening of assessment u/s 147 - denial of principle of natural justice - AO deprived the assessee with a reasonable time to file its responses - transactions concerning purchase of immovable property - HELD THAT - AO proceeded to conclude the assessment - The non-compliance of the assessee is evident however it is also seen that the AO deprived the assessee with a reasonable time to file its responses. Principles of natural justice postulate that reasonable opportunity of being heard is sina qua non for any judicial proceedings. The same has been violated. We are of the view that the assessee has not been afforded adequate opportunities of being heard. We are of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and file supporting evidences before the AO. Accordingly the order of lower authorities is set aside and the Ld. AO is directed to re-adjudicate the matter de novo after giving due opportunity of being heard and by passing a speaking order. The decision to remit it back to the AO is taken in view of the fact that an AO is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. We have noted with respectful deference the decision of TIN box 2001 (2) TMI 13 - SUPREME COURT on the subject matter. AO shall give opportunities of being heard to the assessee and it shall be bounden upon the assessee to comply with the notices issued by the Ld. AO. Any non-compliance on the part of the assessee can be adversely viewed. The assessee is at liberty to produce all or any other evidences deemed relevant in support of its claims before the Ld. AO during the re-adjudication proceedings. Accordingly all the grounds of appeal raised by the assessee are therefore allowed for statistical purposes.

Summary

The Appellate Tribunal (ITAT Chennai) allowed the assessee's appeal against the order of the Commissioner of Income Tax (CIT(A), NFAC, Delhi) for AY 2014-15, setting aside the assessment order passed by the Assessing Officer (AO). The AO had completed the assessment under section 147 after issuing limited notice and providing only 10 days to the assessee to respond, which the Tribunal found to violate the "principles of natural justice" requiring a "reasonable opportunity of being heard" as a "sine qua non" for judicial proceedings.The Tribunal emphasized that the AO is the "fulcrum of assessment proceedings" with the primary responsibility to examine facts and determine taxable income. Citing the Hon'ble Apex Court's decision in TIN Box 249 ITR 216, the Tribunal directed the AO to re-adjudicate the matter de novo, after affording the assessee a final opportunity to present its case and submit evidence, and to pass a "speaking order." The assessee was warned that non-compliance with AO's notices may be "adversely viewed."Accordingly, the appeal was allowed for statistical purposes, and the matter remitted to the AO for fresh adjudication with due opportunity to the assessee.