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of <h1>Assessing Officer's statutory right to hearing u/s250(2) invalidates order when not heard; matter remitted for de novo adjudication</h1> Whether an order under s.250 is valid where the Assessing Officer (AO) was not afforded a hearing: s.250(2) expressly grants the right to be heard to the ... Validity of order passed u/s 250 by CIT(A) - Liability to deduct TDS from a payment made to entity fiscally domiciled in the UK - As submitted that this is a case in which the CIT(A) has passed his order without affording an opportunity of hearing to the AO, as is mandatory u/s 250 HELD THAT:- We find that Section 250 (2) specifically provides for “the right to be heard at the hearing of the appeal” to “(a) the appellant, either in person or by an authorised representative; (b) the Assessing Officer, either in person or by a representative”. Admittedly no such opportunity of hearing is given to the Assessing Officer concerned. In view of this position, we deem it fit and proper to remit the matter to the file of the CIT(A) for adjudication de novo after giving a reasonable opportunity of hearing to the Assessing Officer having jurisdiction over ascertainment of the tax withholding liability from foreign remittances. As we are remitting the matter to the file of the CIT(A), we see no need to go into the decision of the learned CIT(A) on merits or on the question. Issues: (i) Whether the appellate order passed by the Commissioner (Appeals) without affording the Assessing Officer an opportunity of hearing under section 250(2) is vitiated and whether the matter should be remitted for de novo adjudication after hearing the Assessing Officer.Analysis: Section 250(2) grants the right to be heard at the hearing of the appeal to both the appellant and the Assessing Officer. The statutory scheme for appeals under section 248 concerns determination of tax deductible under section 195 and related obligations; where the Commissioner (Appeals) proceeds without providing the Assessing Officer the hearing guaranteed by section 250(2), the procedural right conferred on the Assessing Officer is not complied with. Given the absence of such opportunity in the present proceedings, and because the question of tax withholding liability arising from foreign remittances falls within the purview of the Assessing Officer's jurisdictional functions, the appropriate remedy is to remit the matter for fresh adjudication so that the Assessing Officer may be afforded a reasonable opportunity to be heard and the appeal decided afresh on merits.Conclusion: The appeal is allowed to the extent that the matter is remitted to the Commissioner (Appeals) for de novo adjudication after giving a reasonable opportunity of hearing to the Assessing Officer; this result is in favour of the assessee.Ratio Decidendi: Where section 250(2) confers a right to be heard to the Assessing Officer at the appellate hearing, failure to afford that right vitiates the appellate proceedings and requires remand for fresh adjudication after hearing the Assessing Officer.
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