ITAT Delhi Restores Section 153C Assessment Appeal After Ex-Parte Dismissal by CIT(A)

Background

The Delhi Bench of the Income Tax Appellate Tribunal has remanded the appeal of M/s AK Landcon Pvt. Ltd. for Assessment Year 2020–21, holding that the Commissioner (Appeals) erred in disposing of the matter ex-parte without adjudicating crucial legal and factual grounds raised by the assessee. The appeal arose from an assessment framed under Section 153C of the Income Tax Act pursuant to search-related proceedings. The CIT(A) had dismissed the assessee’s challenge primarily on account of repeated non-appearance, relying on the Supreme Court’s ruling in CIT v. B.N. Bhattacharjee to justify proceeding ex-parte. While touching upon the merits, the appellate authority refrained from examining the additions substantively, citing lack of cooperation and absence of supporting material from the assessee.

Outcome

Before the Tribunal, although the assessee again remained unrepresented, the Bench noted that important jurisdictional issues had been raised — including the alleged absence of mandatory approval under Section 153D and the admission of digital evidence without compliance with Section 65B of the Indian Evidence Act. The record indicated that these grounds had not been effectively examined by the CIT(A), despite being specifically flagged during appellate proceedings. Observing that denial of a meaningful opportunity would undermine the principles of natural justice, the Tribunal held that the matter warranted fresh consideration. It set aside the impugned appellate order and restored the case to the file of the CIT(A) with a direction to grant proper hearing, permit raising of legal objections, and decide the appeal on merits.

The appeal was accordingly allowed for statistical purposes.