Karnataka High Court Remands Business Loss Claim After CIT(A) Denies Personal Hearing — Natural Justice Violated

Case Overview

Case Name: Rajesh Jaswanth Rai Mehta Vs CIT (Appeals)
Court: Karnataka High Court
Nature of Proceeding: Writ Petition (Partly Allowed)

The Karnataka High Court has intervened in a matter where the Commissioner of Income Tax (Appeals) passed an appellate order rejecting the assessee's claim of business loss without affording a personal hearing — despite an express request having been made. The Court set aside the impugned portion of the appellate order and remitted the matter for fresh adjudication, while leaving intact the findings rendered in favour of the assessee concerning unsecured loans.

Background and Facts of the Case

The assessee, Rajesh Jaswanth Rai Mehta, challenged an assessment order by filing an appeal before the Appellate Authority on multiple grounds. The appeal was partly decided in his favour — specifically, the Appellate Authority upheld the assessee's contentions regarding unsecured loans and simultaneously remitted certain aspects back to the Assessing Officer with specific observations.

However, the assessee remained aggrieved by one particular portion of the appellate order — the outright rejection of his claim pertaining to business loss, which was dealt with in paragraph 6 of the Order-in-Appeal dated 10.02.2026.

The core grievance was procedural in nature: the assessee had explicitly requested a personal hearing during the appellate proceedings. This request was submitted on 04.02.2026, along with written submissions already placed on record. Despite this pending request, the Appellate Authority proceeded to pass the final order on 10.02.2026 — a mere six days later — without granting any personal hearing opportunity.

The Assessee's Submissions Before the High Court

Counsel appearing on behalf of the assessee drew the Court's attention to the following key points: