BIJAPURE FITNESS PRIVATE LIMITED,SATARA vs. INCOME TAX OFFICER WARD 3, SATARA

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ITA 621/PUN/2026Status: DisposedITAT Pune29 June 2026AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) is obligated to adjudicate the grounds of appeal on merits and cannot dismiss an appeal for non-prosecution. The CIT(A)'s order was set aside for de novo adjudication.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-attendance. The assessee faced operational and financial difficulties, leading to a lack of administrative personnel to manage tax compliance. The ITAT condoned the delay in filing the appeal before it.

What were the issues?

Whether the CIT(A) can dismiss an appeal for non-prosecution without adjudicating the grounds of appeal. The procedural obligation of the CIT(A) to dispose of appeals on merits.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 250(6),Section 251(1)(a),Section 251(1)(b),Section 251(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Pramod S. Shingte
For Respondent: Shri Sandip Pawar, JCIT

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), (NFAC) [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 („the Act‟) for AY 2016-17 on 12.08.2025, emanating from the Assessment Order u/s 143(3) of the Act, dated 28.12.2018.

2.

There was a delay of 101 days in filing of the appeal before this Tribunal. The assessee filed an affidavit citing the reasons for delay. The relevant paragraphs of the affidavit is reproduced here as under : “The Appellant company was engaged in the business of running fitness centres at various locations, both on its own account and on a franchisee basis. However, since the year 2023, on account of various operational and financial difficulties, the said business activity was compelled to be discontinued and the company became virtually defunct. As a direct and inevitable consequence of this, since 2023 the company has had no administrative personnel or staff to oversee and manage its day-to-day affairs, including compliance with Income Tax proceedings. Neither the registered email ID of the Appellant company nor its Income Tax e-filing portal account was accessed periodically or monitored. It is on account of

ITA No.621/PUN/2026

this singular and genuine reason that the hearing notices issued by the Learned CIT(A) under Section 250 remained unattended, resulting in the ex- parte order, and further causing the delay of 101 days in filing the present Appeal before the Hon'ble Tribunal.”

2.1 In view of the above reasons, we are convinced that there was sufficient cause for delay. Substantial justice is more important than procedural delay. Accordingly, delay condoned.

3.

Submission of Ld.AR: In this case, the Ld. AR submitted that the Ld. CIT(A) has dismissed the appeal without adjudicating the grounds of appeal. Therefore, the Ld. AR requested that one more opportunity may be provided to the assessee to appear before the Ld. CIT(A).

4.

Submission of Ld. DR:

The Ld. DR supported the order of the AO and Ld. CIT(A).

5.

Findings and analysis: We have heard both the parties and perused the records. It is observed that the Ld. CIT(A) had not adjudicated the grounds of appeal raised by the assessee. We reproduce hereunder the relevant paragraphs of the Ld. CIT(A)‟s order : “4.3 .............. From the conduct of the appellant as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal. Further, from the records, it is observed that the appellant failed to give satisfactory explanation about the transactions and has not submitted necessary evidences to satisfy the AO. Though the appellant filed appeal but remained non-compliant during the appellate proceedings also and not furnished any evidences to satisfy the appellate authority. Even otherwise on the merits of it also, I do not see any reason to differ with the findings of the AO since no attempt has been made by the appellant to discharge its onus, following the above-mentioned judicial pronouncements and in view of the facts of the case, the appeal is hereby dismissed.”

5.1 Thus, the ld. CIT(A) has dismissed the appeal without adjudicating the grounds of appeal which is mandatory u/s 250(6) of the Act.

ITA No.621/PUN/2026

5.2 The Hon‟ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) (Bombay) / [2017] 297 CTR 614 (Bombay) as under : Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. 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.” Unquote.

6.

Thus, the Hon‟ble Bombay High Court has categorically held that Ld. CIT(A) has to decide the appeal on merit and Ld. CIT(A) does not have any power to dismiss appeal for non-prosecution.

7.

In view of the above, the order of the Ld. CIT(A) is set-aside to Ld.CIT(A) for denovo adjudication. The Ld. CIT(A) shall provide opportunity of hearing to the assessee.

ITA No.621/PUN/2026

8.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open Court on 29th June, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 29-06-2026 Ravi Kumar Ravi Kumar Digitally signed by Ravi Kumar Date: 2026.06.29 15:56:08 +05'30' आदेशकीप्रतितितिअग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी/ The Appellant 2. प्रत्यर्थी/ The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, „A‟ Bench, Pune 5. ग र्डफ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकरअपीलीयअदिकरण, पुणे / ITAT, Pune

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