Delhi High Court Sets Aside ITAT's Ex-Parte Order Against AAI Over Non-Service Of Hearing Notice

The Delhi High Court has recently held that the Income Tax Appellate Tribunal (ITAT) cannot decide an appeal ex-parte without first ensuring that notice of the hearing has been issued and served on the concerned party.

The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta allowed an appeal filed by the Airports Authority of India (AAI) and set aside the ITAT's order, which had disposed AAI's appeal on merits in its absence.

The Court observed that the Tribunal had committed a procedural irregularity by proceeding to hear and decide the appeal without ascertaining whether notice of the hearing date had been issued and served upon AAI.

“In the absence of the service of notice upon the appellant, we are of the view that there has been a complete non-compliance with Rule 20 of the Rules of 1963 and consequently, manifest failure of justice,” the Court observed.

AAI submitted that on three previous hearing dates, the Tribunal had not functioned and the matter was adjourned. On December 24, 2025, the matter was adjourned to February 2, 2026.

However, AAI contended that it did not receive any notice informing it of the hearing scheduled on February 2.

Despite this, the Tribunal took up the appeal on that date, proceeded ex-parte and decided it on merits.

Revenue could not refute AAI's contention but submitted that since the appeal had been decided on merits, the High Court should consider the merits of the issues involved.

Rejecting this course, the High Court noted that the Tribunal's order had been passed ex-parte without hearing AAI. It referred to Rule 20 of the Income Tax (Appellate Tribunal) Rules, 1963, which requires the date and place of hearing to be fixed in a manner that allows sufficient time for service of notice so that the parties may appear and be heard.

The Court found that there had been complete non-compliance with the requirement of serving notice upon AAI before the appeal was taken up on February 2, 2026.

As such, it set aside the ITAT's order and restored AAI's appeal for fresh consideration.

For Appellant: Advocates Ruchesh Sinha and Ms. Monalisa Maity, Advs.

For Respondent: Advocate Puneet Rai, SSC with Ashwini Kumar & Rishabh Nangia, JSCs