ITAT: Even administrative orders have to be construct with rule of natural justice

The Income Tax Appellate Tribunal (ITAT) has ruled that even administrative orders must adhere to the principles of natural justice. In this case, an appeal was dismissed ex-parte within seven days of the first notice without confirming proper service. The ITAT found this to be an error, stating that the merits of the case should have been considered. The appeal was allowed for statistical purposes.

IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” Bench, Mumbai
Before Shri Shamim Yahya, Accountant Member
I.T.A. No. 475/Mum/2020 (Assessment Year 2015-16)
Hinesh B.Lodaya (HUF)
1202, Neelkanth Heights
B.P. Cros Road, Mulund (W)
Mumbai-400 080
PAN : AABHH3838Q

vs

ITO-29(1)-4
Kauti lya Bhawan, BKC
Mumbai-400 051
Assessee by None
Department by Ms. Smita Verma
Date of Hearing 11.10.2021
Date of Pronouncement 20.10.2021
O R D E R

On the facts, and in circumstances of the case, and in law, learned Commissioner of Income-tax (Appeal) erred in dismissing the appeal ex-parte just in a span of seven days from the issue of first notice alleging non attendance without ensuring service of notice in paper form as opted while filing the appeal petition, and without considering merits of the case which were glaringly covered by statement of facts.

2. The case was posted for hearing on 15.11.2019 for which no response nor filed any adjournment letter. Hence the appeal filed by the appellant is disposed based on the material available on record, The A.O. disallowed the set off brought forward business loss claimed at Rs.91,253/- against the current years speculative profits. Similarly the A.O. made addition of Rs.4,13,724/- being the difference in business income. The A.O. considered the b/f business loss which can be set off against, the current business profit not being speculative business profits. Thus-the A.O assessed total business income at Rs.1,59,667/-after disallowing the b/f business loss at Rs.91,553/- . The contention of the appellant that section 72 of the I.T. Act which a/lows set off of b/f business loss against income from any business including speculative business is not acceptable in the absence of any details. Hence the addition made by the A.O. is hereby confirmed.

4. In the result, this appeal stands allowed for statistical purpose.
Pronounced in the open court on 20.10.2021.

Please find attached the enclosed file for the full judgement