Natural justice and proper appellate allocation required setting aside an ex parte order and remanding for fresh hearing.

An ex parte appellate order was found unsustainable because it was passed after only one notice and without considering the assessee's reply, amounting to a breach of natural justice. It was also inconsistent with the CBDT notification governing allocation of transfer pricing appeals, under which the designated appellate authority was the Commissioner (Appeals), Delhi-44, not NFAC, Delhi. On those grounds, and with the parties agreeing that fresh adjudication was appropriate, the order was set aside and the matter restored for de novo consideration after granting a proper opportunity of hearing.

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Issues: Whether the ex parte appellate order of the Commissioner (Appeals) was sustainable and whether the matter required restoration for fresh adjudication in accordance with law.

Analysis: The appellate order was passed after only one notice and without considering the assessee's reply, resulting in breach of the principles of natural justice. The order was also found to be inconsistent with the CBDT notification governing allocation of appeals arising from transfer pricing orders, under which the designated appellate authority was the Commissioner (Appeals), Delhi-44, rather than NFAC, Delhi. In these circumstances, and in view of the parties' agreement that fresh adjudication was appropriate, the impugned appellate order was set aside and the matter was restored for de novo consideration after granting proper opportunity of hearing.

Conclusion: The ex parte appellate order was not sustained and the matter was remanded for fresh adjudication in accordance with law.

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