ARUL KANAGARAJAN,CHENNAI vs. INCOME TAX OFFICER, CHENNAI

ITA 4492/CHNY/2026Status: DisposedITAT Chennai14 October 2026AY 2015-164 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 446 days in filing the appeal, finding sufficient cause for the belated filing as the assessee was unaware of the proceedings due to non-receipt of notices. Regarding the merits, the Tribunal held that the FAA had no jurisdiction to dismiss an appeal for non-compliance without going into the merits of the case. The FAA is bound to decide the appeal on merits even in the absence of the assessee. This view was supported by the decision of the Hon'ble High Court of Madras in Southern Steel Industries vs. AAC (CT). Consequently, the order of the FAA was set aside, and the matter was remanded back to the FAA for fresh adjudication on merits after providing a reasonable opportunity of being heard to the assessee. The assessee was directed to cooperate and not seek unnecessary adjournments. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Shri Arul Kanagarajan, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated March 11, 2025. The appeal pertains to Assessment Year 2015-16. There was a delay of 446 days in filing the appeal, which the assessee sought to condone by explaining that neither the FAA's order nor hearing notices were received, leading to unawareness of the proceedings. The First Appellate Authority (FAA) had passed an ex-parte order, dismissing the assessee's appeal in-limine due to non-compliance with five notices, without adjudicating on merits.

What were the issues?

1. Whether the delay of 446 days in filing the appeal should be condoned? (Question of fact) 2. Whether the First Appellate Authority (FAA) was justified in dismissing the assessee's appeal ex-parte for non-compliance without adjudicating on merits? (Question of law and fact, concerning principles of natural justice and jurisdiction) Assessee's Contentions: - The assessee was unaware of the appellate proceedings as notices from the FAA were not received/served on the updated email ID or mobile number, leading to an ex-parte appearance before the FAA. - The FAA dismissed the appeal for non-compliance, not on merits. - In the interest of justice and equity, the assessee should be granted another opportunity to present their case before the FAA. Revenue's Contentions: - Adequate opportunities were provided by the FAA's office, and there was no violation of the principles of natural justice. - The revenue could not controvert the fact that the FAA dismissed the appeal for non-compliance.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI GAGAN GOYAL

Hearing: 13.10.2026Pronounced: 14.10.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 11.03.2025, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2015-16.

- 2 - ITA No.4492/CHNY/2026 Arul Kanagarajan 2. There is a delay of 446 days in filing the present appeal. The assessee has filed a petition seeking condonation of the delay, duly supported by an affidavit, explaining the reasons for the same. It is stated that neither the order passed by the FAA nor the hearing notices issued during the appellate proceedings were received by the assessee. Consequently, the assessee remained unaware of the appellate proceedings and the order passed by the FAA. Subsequently, upon his authorised representative accessing the portal, the assessee came to know of the order. Thereafter, the assessee consulted his counsel and filed the present appeal without further delay. The assessee’s counsel has also stated in the affidavit that the appeal papers were misplaced in his office along with other client papers and hence, it took some time to trace them. On perusal of the reasons stated, we are of the view that no latches can be attributed to the assessee as there is sufficient cause for belated filing of this appeal. Hence, we condone the delay and proceed to dispose off the appeal on merits.

At the very outset, we notice that the order of First Appellate Authority (FAA) is ex-parte, since there was no compliance from the assessee to five notices issued from the office of the First Appellate Authority. We also note that the FAA had dismissed the appeal of the assessee in-limine without adjudicating the issues on merits.

- 3 - ITA No.4492/CHNY/2026 Arul Kanagarajan 4. The Ld.AR submitted that the assessee was unaware of the appellate proceedings since the notices issued by the FAA was not received / served upon the assessee in the email id or mobile number updated with the Income-tax department and, therefore, remained ex-parte before the FAA. However, the FAA has dismissed the appeal for non- compliance and not on merits. It was prayed, in the interest of justice and equity, assessee may be provided with one more opportunity to present his case before the FAA.

The Ld.DR submitted that adequate opportunities were provided from the offices of the FAA and there is no violation of principles of natural justice. However, he could not controvert the fact that the FAA has dismissed the appeal for non-compliance.

We have heard rival submissions and perused the materials on record. The proceedings before FAA were ex-parte, since the assessee did not respond to various notices issued. We strongly deprecate the nonchalant attitude of the assessee in not responding to the notices issued from the offices of the FAA. We also noted that the FAA has simpliciter dismissed the appeal for non-compliance and not adjudicated or decided merits of the case. We find that appellate authority has no jurisdiction to dismiss the appeal for default of non-compliance without

- 4 - ITA No.4492/CHNY/2026 Arul Kanagarajan going into merits. The FAA is bound to decide the appeal on merits even in the absence of assessee. This view of ours is supported by the decision of Hon’ble High Court of Madras in the case of Southern Steel Industries vs. AAC (CT), reported in [1996] 101 STC 273 (Mad). In term of the above, the order of FAA is set aside and matter remanded back to his file for fresh adjudication on merits after allowing reasonable opportunity of being heard to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 14th October,2026 at Chennai.

Sd/- Sd/- (जॉज� जॉज� के) (गगन गोयल) (GAGAN GOYAL) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 14th October, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.10.16 17:03:07 +05'30'

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