Tribunal emphasizes right to be heard, sets aside ex parte decision, remands for fresh consideration.

The Tribunal set aside the ex parte decision of CIT(A) due to lack of proper opportunity of hearing, emphasizing the right to be heard as a fundamental principle of natural justice. The Tribunal remanded the matter to the AO for fresh consideration after providing the assessee with a reasonable opportunity to be heard. Additionally, the Tribunal allowed the appeal for statistical purposes regarding the addition of unexplained deposits in bank accounts under Section 69 of the Act, considering the additional evidence submitted by the assessee as crucial in determining the source of the deposits.

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Issues:
1. Ex parte decision by CIT(A) without proper opportunity of hearing.
2. Addition of unexplained deposits in bank accounts under Section 69 of the Act.
3. Appeal against the order of CIT(A) before the Tribunal.

Issue 1: Ex parte decision by CIT(A) without proper opportunity of hearing

The appeal filed by the assessee was directed against the order of CIT(A), Shimla, H.P. for Assessment Year 2005-06. The assessee contended that the CIT(A) erred in deciding the appeal ex parte without providing a proper opportunity of hearing, which violated the Principles of Natural Justice. The notice for hearing issued by CIT(A) was not served upon the assessee, and the CIT(A) proceeded to pass an ex parte order. The Tribunal held that the CIT(A) should have issued another notice to the assessee to inform him about the date of hearing. The Tribunal emphasized that the right of appeal includes the right to be heard, a fundamental principle of natural justice. Consequently, the Tribunal set aside the order of CIT(A) and remanded the matter to the AO for fresh consideration after affording the assessee a reasonable opportunity to be heard.

Issue 2: Addition of unexplained deposits in bank accounts under Section 69 of the Act

The AO had made additions under Section 69 of the Act, totaling to Rs. 5,60,200, based on alleged unexplained deposits in the bank accounts of the assessee. The AO also added Rs. 10,000 on account of income from the sales of shawls and Rs. 1,50,000 on account of an unexplained entry in the bank account of the assessee. The AO observed that the assessee could not explain the sources of these deposits. The Tribunal noted that the assessee had submitted additional evidence during the appeal, including bank statements and affidavits, which were crucial in determining the source of the deposits. The Tribunal allowed the appeal for statistical purposes, indicating that the additional evidence presented by the assessee was relevant and necessary to decide the issues on merits.

Issue 3: Appeal against the order of CIT(A) before the Tribunal

The assessee appealed against the order of CIT(A) before the Tribunal, challenging the ex parte decision and the additions made by the AO under Section 69 of the Act. The Tribunal, after considering the arguments presented by both parties and examining the additional evidence submitted by the assessee, allowed the appeal for statistical purposes. The Tribunal emphasized the importance of providing a fair opportunity of being heard in judicial proceedings and directed the AO to reconsider the issues afresh after affording the assessee due and reasonable opportunity to present their case. The Tribunal's decision highlighted the significance of adhering to the principles of natural justice in legal proceedings.

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