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Facts
The Assessee filed an appeal against the order of the NFAC. The NFAC had dismissed the appeal ex-parte due to non-compliance and non-appearance of the Assessee, without touching upon the merits of the case.
Held
The Tribunal held that dismissing an appeal for non-prosecution without deciding on merits is not permissible under Section 251 of the Act. The Tribunal remanded the case back to the Commissioner for a fresh decision.
Key Issues
Whether an appeal can be dismissed for non-prosecution without deciding on merits, and if such a dismissal is permissible under the Income Tax Act.
Sections Cited
250, 68, 143(3), 144B, 251(1)(a), 251(1)(b), 251(2)
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Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH :: MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
This appeal has been preferred by the Assessee against the order dated 18/06/2025 impugned herein passed by the National Faceless Appeal Centre (NFAC), Delhi (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2020-21.
Though, Assessee though had filed first appeal before the Ld. Commissioner challenging the disallowance of Rs. 7,48,403/- made by the Assessing Officer (AO) u/sec. 68 of the Act, vide assessment order dated 27/09/2022, u/sec. 143(3) r.w.s. 144B of the Act, however, despite of affording 03 opportunities, eventually made no compliance and/or filed no submissions or documents. Therefore, in the constrained circumstances, Ld. Commissioner decided the appeal of the Assessee as ex-parte and ultimately dismissed the same in limini, without touching upon the merits of the case due to non-prosecution, which is not permissible, as held by the Hon'ble Jurisdictional High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) [2017] 297 CTR 614 (Bom), as under:-
This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251 (2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act."
Thus, considering the peculiar facts and circumstances in totality, for just and proper decision of the case and substantial justice and non-appearance of the Assessee before the Ld. Commissioner despite of issuing notices on e-filing ITBA portal, this Court is inclined to remand the instant case to the file of the Ld. Commissioner for decision afresh, however, subject to token cost of Rs.5,500/- (Rupees Five Thousand Five Hundred Only) to be deposited within 15 days from today in the Revenue-Department under the ‘other head’, so that, the Assessee would become more conscious and vigilant, in pursuing its proceedings.
It is clarified that in case of subsequent default, the Assessee shall not be entitled for any leniency.
In the result, Assessee’s appeal is allowed for statistical purposes in the aforesaid terms.
Order pronounced in the open court on 07.10.2025.