PRINCIPAL COMMISSIONER OF INCOME TAX 3 vs. NEELU GUPTA
What did the High Court hold?
The High Court dismissed the Revenue's appeal, following its own decision in a similar case, Tax Appeal No. 1192 of 2018. In that prior case, the Court had observed that while the Tribunal's decision to remand the proceedings for consideration by the CIT(A) on the ground that the appeal order was ex-parte was permissible, the Tribunal could have imposed a fair amount of cost on the assessee to ensure seriousness in the proceedings. However, the Court held that solely for the purpose of suggesting imposition of cost, it was not inclined to entertain the appeal, as it did not find any question of law arising. The Court noted that in future, the Tribunal would bear these observations in mind. Therefore, the present appeal was also dismissed on similar grounds, without delving into the merits of the ITAT's decision regarding the assessee's non-compliance.
What were the facts?
The Revenue is in appeal against an order of the Income Tax Appellate Tribunal (ITAT) dated April 5, 2018. The ITAT had set aside an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The Revenue contends that the CIT(A) did not render a decision on merits due to the assessee's total non-compliance, despite sufficient opportunities. The Revenue also questions the ITAT's decision to take up the matter directly for adjudication on merits without considering the reasons for the assessee's non-compliance before the lower authorities. The present appeal concerns the assessment year(s) not explicitly stated in the provided text.
What were the issues?
1. Whether the Appellate Tribunal erred in setting aside the order passed by the CIT(A) on the ground that CIT(A) had not rendered any decision on merits, without appreciating that this was due to the assessee's total non-compliance despite being granted sufficient opportunities? (Question of law and fact, concerning the ITAT's power to set aside orders based on procedural non-compliance). 2. Whether the Appellate Tribunal erred in law and on facts by holding that there were no reasons for an appellate forum being bypassed and the matter being taken up directly before it for adjudication on merits? (Question of law and fact, concerning the ITAT's jurisdiction and procedure). 3. Whether the Appellate Tribunal erred in setting aside the matter to the CIT(A) for fresh adjudication without considering whether there were justifiable grounds for the assessee's total non-compliance before the CIT(A) as well as the Assessing Officer? (Question of law and fact, concerning the ITAT's discretion in remanding matters). Assessee's contentions: Not recorded. Revenue's contentions: The Revenue argued that the ITAT erred in setting aside the CIT(A)'s order due to the assessee's non-compliance and in taking up the matter directly for adjudication without proper consideration of the reasons for non-compliance.
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Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 05.04.2018 raising following questions for our consideration: “A. Whether the Appellate Tribunal erred in setting aside the order passed by the CIT(A) on the ground that CIT(A) had not rendered any decision on merits without appreciating the fact that due to total non-compliance on part of the assessee despite granting sufficient opportunities? B. Whether the Appellate Tribunal erred in law and on facts while holing that there is no reasons for an appellate Forum being by passed and the matter being taken up directly before it for adjudication on merits? C. Whether the Appellate Tribunal erred in setting aside the matter to CIT(A) for fresh adjudication without taking into consideration whether there were justifiable grounds for making total non-compliance by the assessee before the CIT(A) as well as the Assessing Officer?” C/TAXAP/1235/2018 ORDER
Similar issue came up before us in Tax Appeal No. 1192 of 2018. This Tax Appeal was dismissed by making following observations. “1. Revenue is in appeal against judgment of the Incometax Appellate Tribunal dated 28.3.2018. Tribunal remanded the proceedings for consideration of CIT (Appeals) on the ground that the appeal order was exparte. Learned counsel for the appellant is justified in making a grievance that the Tribunal did not put some check or restriction on the assessee so that sense of seriousness is brought about in the proceedings. In our prima facie view, even if the Tribunal was inclined to grant opportunity to participate in the proceedings, at least imposition of fair amount of cost could have been considered. This would bring in a level of seriousness required on the part of the assessee while facing assessment proceedings. However, only for such purpose, we are not inclined to entertain this appeal, since otherwise we do not find any question of law arising. In future assure the Tribunal would bear in mind these observations.” In the result, this Tax Appeal is also dismissed. (AKIL KURESHI, J) (B.N. KARIA, J) JYOTI V. JANI
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