The appellate authority must adhere to principles of natural justice, ensuring proper notice and factual verification before dismissing appeals.

ORDER

PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER:

This appeal, in ITA No. 1393/Bang/2024 being filed by the assessee has arisen from the appellate order dated 30.01.2018 passed by Ld. CIT(A) under section 250 of the Act wherein ld. CIT(A) dismissed the appeal of the assessee ex- parte in the absence of the assessee for non-prosecution , the appellate proceedings before ld. CIT(A) had arisen from the assessment order dated 24.12.2010 passed by the ld. Assessing Officer under section 143(3) of the Act.

2. The grounds of appeal raised by the assessee in Memo of appeal filed with Income Tax Appellate Tribunal, Bangalore Benches, Bangalore, reads as under:

“ 1. The order of learned Commissioner of Income Tax(Appeals)-1, Bangalore is opposed to law and facts of the case.

2. The learned Commissioner of Income Tax(Appeals) has erred in dismissing the appeal filed by the appellant on the only ground that no one appeared for the hearing on 30.01.2018, However, the hearing notice was sent by Commissioner of Income Tax(Appeals) to appellant’s postal address at “No. 6 & 7, St. Patrix, 157, Brigade Road, Bengaluru-560038” though appellant had mentioned in form 35 its Authorised representative postal address for serving notice viz. “ Digliya & Co. , L Block Unity Buildings, JC Road, Bangalore”

3. The learned CIT(Appeals) has erred in not deciding the appeal on the merits and has dismissed the appeal without proper servicing of hearing notice.

4. The Learned CIT(Appeals) has erred in not considering the grounds raised on facts and law with regard to disallowance of Rs. 4,27,076/- u/s 40(a)(ia) of the Income Tax Act, 1961 and disallowance of Rs. 5,50,820/- u/s 37 of the Income Tax Act, 1961 .

5. The appellant prays before this court to direct the CIT(Appeals) to hear the appellant as per grounds of appeal submitted in the Form 35 dated 15.02.2011.

6. With these and such other grounds that might be urged at the time of hearing, the appellant prays for the relief sought for.”

3. The brief facts of the case are that the assessee filed its return of income for the impugned assessment year on 26.09.2008 , declaring loss of Rs.(-) 36,73,873/-. The assessee is a partnership firm. The return of income was processed u/s 143(1). The case was selected by Revenue for framing scrutiny assessment under CASS, and statutory notices u/s 143(2) and 142(1) were issued by the AO during the course of assessment proceedings. The assessee participated in assessment proceedings and furnished the requisite details. There were two additions made by the AO to the income of the assessee, firstly being on account of non deduction of income tax at source u/s 194I on hire charges to the tune of Rs. 4,27,076/- paid by the assessee to M/s Event Net work, and debited to its P & L Account, by invoking provisions of Section 40 (a)(ia). The second additions made by the AO was to the tune of Rs. 5,50,820/- on account of excess amount of delivery expenses and salaries and wages, debited to P&L Account with reference to earlier years compared to turnover, and 20% stood disallowed by the AO. The AO passed assessment order dated 24.12.2010 u/s 143(3) of the 1961 Act, making aggregate additions to the tune of Rs. 9,77,896/- on the above two counts.

4. The assessee filed first appeal with ld. CIT(A), which stood dismissed by ld. CIT(A) ex-parte in limine for non prosecution by the assessee, vide appellate order dated 30.01.2018, by holding as under:

“1. This appeal was filed on 15-02-2011 for the Assessment Year 2008-09 against the order dated 24-12-2010 passed under Section 143 (3) of the IT Act by the ACIT, Circle-1(1), Bengaluru, which was served on 17-01-2011. Aggrieved by the said order, the appellant i