Natural justice in appellate proceedings requires a fair hearing; ex parte disposal and rectification rejection were set aside for fresh adjudication.

An ex parte disposal by the first appellate authority, without adjudication on merits, could not be treated as a proper disposal where the record showed a rectification application seeking recall and hearing. The rejection of that application on the ground that it was not pending on the portal was not sustained in light of the material on record and the requirement of fair hearing. The matter was restored to the first appellate authority for de novo adjudication, with reasonable opportunity to be heard and liberty to produce additional evidence and raise additional grounds.

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Issues: Whether the matter required restoration to the first appellate authority for fresh adjudication after the ex parte disposal of the appeal and rejection of the rectification application.

Analysis: The appeal arose from an assessment made under sections 147 and 143(3) of the Income-tax Act, 1961, followed by an ex parte disposal before the first appellate authority without adjudication on merits. The rectification application seeking recall and an opportunity of hearing was rejected on the footing that it was not pending on the portal. In view of the material showing the application on record and the need to afford a fair hearing, the appellate order and the rejection of rectification could not be sustained as a proper disposal of the dispute on merits.

Conclusion: The matter was restored to the first appellate authority for de novo adjudication with reasonable opportunity of hearing and liberty to adduce additional evidence and raise additional grounds.

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