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Facts
The assessee's appeal was dismissed by the CIT(A) in limine due to non-prosecution, despite the appeal being filed with a delay of 253 days. The delay was attributed to medical issues and staff shortage.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal without adjudicating on merits, as it is obligatory to decide appeals on merits, not summarily dismiss them for want of prosecution. A final opportunity was granted to the assessee.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding the merits of the case. Whether a liberal approach should be adopted for condoning the delay in filing appeals.
Sections Cited
156, 143, 147, 69A, 251(1)(a), 251(1)(b), 251(2), 246A
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Income Tax Appellate Tribunal, “J (SMC
Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA
आदेश / ORDER PER ARUN KHODPIA, AM:
The present appeal filed by the assessee is directed against the order passed by the Ld. CIT(Appeals)/NFAC, dated 22.07.2024 for the assessment year 2012-13 as per the following grounds of appeal:
“1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in dismissing the appeal without providing the opportunity of being heard to the appellant.
2. On the facts and circumstances of the case and in law, common Document Identification Number (DIN) has been generated by the Ld. AO for notice of demand u/s 156 and assessment order passed u/s 143 r.w.s 147 which is violation of guidelines issued by CBDT vide Circular No.19/2019 dated 14.08.2019 regarding the generation /allotment/quoting of DIN.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in dismissing the appeal and confirming reopening the assessment u/s 147 of the Act. Further, the impugned order passed u/s 143(3) r.w.s. 147 of the Act by the Ld. AO is bad in law. i. Without prejudice to the above, the present reassessment proceeding was only to make further inquiry and verification without any reason to believe that any income has escaped assessment. ii. Without prejudice to the above, the present reassessment proceeding was on the basis of borrowed satisfaction and that there is no independent application of mind by the Ld. AO.
4. On the facts and circumstances of the case and in law, the impugned assessmentorder passed u/s 143(3) r.w.s 147 of the Act dated 27.12.2019 and the notice ofdemand is bad in law.
On the facts and circumstances of the case and in law, the Ld. AO has erred inviolating the principles of natural justice, in as much as, he has not issued any showcausenotice in respect of the allegations made in the order.
6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred indismissing the appeal and confirming an addition
of Rs. 49,500/- being allegedcommission that ought to have been earned by the appellant for alleged transfer offunds u/s 69A of the Act. i. Without prejudice to the above, the said addition is a complete fictional andnotional addition and therefore, unsustainable in law. 7. Your appellant craves to add, alter, or amend any of the grounds of appeal on orbefore the date of hearing of appeal.”
At the very outset, the Ld. Counsel for the assessee submitted that the appeal is time barred by 253 days. Explaining the reasons leading to the said delay, the Ld. Counsel has filed condonation petition a/w. affidavit. It was submitted by the Ld. Counsel that due to some medical issues and non availability of the staff in the erstwhile company, no tracking of cases or filing of appeal could be made before the due date. It was submitted by the Ld. Counsel that there was no deliberate or malafide conduct on the part of the assessee in causing such delay, therefore, the impugned delay may be condoned.
The Ld. Sr. DR did not raise any objection as regards the delay involved in appeal and fairly conceded to the submissions of the Ld. Counsel for the assessee as regards the said delay.
Having heard the parties herein, we are of the considered view that the delay involved in the present appeal was caused due to some medical issues and shortage of staff and therefore was no deliberate or malafide conduct on the part of the assessee in causing such delay. The Ld. Sr. DR could not place on record any evidence showing malafide or lackadaisical approach on the part of the assessee. In so far the delay is concerned, it would be relevant to point out that the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31.01.2025, had observed that a justice oriented and liberal approach ought to be adopted while considering the aspect of condoning the delay involved in filing of the appeal. Also, the Hon’ble High Court of Chhattisgarh in the case of Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025, after relying on the judgment of the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur (supra) had held that a justice oriented and liberal approach be adopted while considering the application filed by the assessee for condonation of delay.
That in the recent judgment of the Hon’ble Supreme Court in the 5. case of Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave Petition (Civil) No.6145 of 2024, dated 21st March, 2025, the Hon’ble Apex Court while interpreting Section 5 of the Limitation Act, 1963 regarding the condonation of delay in respect of case of land acquisition has observed and held on the aspect of delay that although the delay cannot be condoned without sufficient cause, the merits of the case could not be discarded solely on the ground of delay. A liberal approach, therefore, should be taken in condoning the delay when limitation ground undermines the merits of the case and obstructs the substantial justice. In other words, the objective of the court should be to deliver substantial justice coupled with liberal and judicious approach while deciding the issue of limitation and whenever it is found that the case has merits which needs to be addressed substantially, in such case, the delay should be condoned. Accordingly, the said delay of 253 days involved in the present appeal is condoned.
As regards the merits of the case, the Ld. Counsel for the assessee submitted that the Ld. CIT(Appeals)/NFAC has dismissed the appeal in limine due to non-prosecution without dealing with the merits of the case. In support of his aforesaid contention, the Ld. Counsel has referred to Para 4 & 4.1 of the Ld. CIT(Appeals)/NFAC order. It was submitted by the Ld. Counsel that one final opportunity may be provided to the assessee so that the assessee can represent its case on merits. For the sake of completeness, Para 4 & 4.1 of the Ld. CIT(Appeals)/NFAC order is culled out as follows:
“4.Several notices were issued giving opportunities of being heard to the appellant, which were duly served upon the appellant through registered email. No response is received till date. The particulars of notices issued are as under:
SL. No. Date of Notice Date of hearing REMARKS 1. 22.02.2021 02.03.2021 Delivered on the registered e-mail address given by the appellant, but no response received. 2. 05.07.2021 12.07.2021 Delivered on the registered e-mail address given by the appellant, but no response received. 3. 21.07.2023 31.07.2023 Delivered on the registered e-mail address given by the appellant, but no response received. 4. 04.10.2023 19.10.2023 Delivered on the registered e-mail address given by the appellant, but no response received. 5. 21.06.2024 08.07.2024 Delivered on the registered e-mail address given by the appellant, but no response received.
4.1 In view of the above, it appears that the non-appearance to notices isdeliberate as all the notices have been duly served upon the "appellant on theregistered email account. No response has been received from the appellant till date.It is reasonable to infer from the continued non-compliance that the appellant is not serious to pursue his appeal.”
The Ld. Sr. DR has fairly conceded that the matter may be adjudicated denovo on merits before the first appellate authority providing one final opportunity to the assessee.
We have carefully considered the contents in the documents/material available on record, submissions of both the parties. As per the aforesaid examination of the entire spectrum of the matter in the interest of natural justice, we deem it fit and proper to provide one final opportunity to the assessee to represent its case on merits before the Ld. CIT(Appeals)/NFAC.
On a perusal of the order of the Ld.CIT(Appeals)/NFAC, it is observed that the Ld.CIT(Appeals)/NFAC dismissed the appeal of the assessee in limine for non-prosecution without dealing with the merits of the case. In our considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal for want of prosecution. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the CIT(Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per the mandate of law the CIT(Appeals)/NFAC is not vested with any power to summarily dismiss the appeal on account of non prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble High Court had observed as under:
"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 AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 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. Sec. 251(1)(a) and (h) 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-s. (2) of s. 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 s. 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 w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO 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 s. 251(1)(a) and (b) and Explanation to Sec. 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.”
Respectfully following the aforesaid order, we set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to his file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC, failing which an appropriate order would be passed in accordance with the mandate of law.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 20th August, 2025.