Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI N. V. VASUDEVAN & MS. PADMAVATHY S
Assessee by : Shri. B. S. Balachandran, Advocate Revenue by : Shri. Priyadarshini Mishra, Addl. CIT(DR)(ITAT), Bengaluru. Date of hearing : 26.04.2022 Date of Pronouncement : 27.04.2022 O R D E R Per N. V. Vasudevan, Vice President This is an appeal by the assessee against the order dated 23.11.2016 of CIT(A), Gulbarga, relating to Assessment Year 2008-09.
The assessee is a partnership firm engaged in the business of trading in coal. For Assessment Year 2008-09, the assessee filed a return of income declaring a total loss of Rs.29,95,798/-. An Order of Assessment under section 143(3) dated 29.11.2010 was passed by the AO in which after making several additions, the AO determined the total income of the assessee at Rs.1,30,05,738/-. Against the aforesaid order of the AO, assessee filed appeal before the CIT(A). From a perusal of the impugned order of the CIT(A), it is seen that the CIT(A) issued the following notices of hearing to the assessee:
Sl. No. Date of notice Date of hearing 01 28.10.2015 16.11.2015 at 11.00 AM 02 21.11.2015 02.12.2015 at 11.25 AM 03 27.07.2016 03.08.2016 at 02.50 PM 04 09.08.2016 18.08.2016 at 02.50 P.M 05 22.08.2016 31.08.2016 at 10.15 AM 12.09.2016 19.09.2016 at 03.15 PM 06 07 04.10.2016 20.10.2016 at 12.15 P.M
Since there was no response from the assessee, the CIT(A) proceeded to dismiss the appeal for non-prosecution by relaying upon the decision of the ITAT Delhi Bench in the case of CIT Vs. Multiplan India Pvt. Ltd., (1991) 38 ITD 320 (Delhi). The CIT(A) also observed that from the statement of facts and grounds of appeal
, there was no sufficient material to allow any relief to the assessee.
4. Aggrieved by the order of the CIT(A), assessee has filed the present appeal before the Tribunal. We have heard the rival submissions. The Delhi High Court in the case of Golden Times Services Pvt. Ltd. vs Dcit on 13 January, 2020 in W.P.(C) 402/2020 C.M.No. 1104/2020, on the question of dismissing tax appeals for default, the Hon’ble High Court of Delhi, held as follows: “16. Pertinently, adjudication on the merits of the case by the ITAT is essential for this Court to hear an appeal and the ITAT could not have dismissed the same solely on account of non-appearance of a party. As a result, as of today, the petitioner company is faced with the situation where it cannot exercise its remedy of filing the statutory appeal under Section 260A of the Act, since order dated 18.10. 2016, dismissing the appeal of the appellant, does not adjudicate on the merits of the case. For the assessee to file an appeal under the said provision before this Court, it is required to satisfy that the case involves a substantial question of law. As the order is not touching upon the merits of the case, it deprives this Court to evaluate, if any, substantial question of law under Section 260A of the Act arises on merits, thereby impinging upon assessee's right to get the issue decided by the final fact finding authority. Thus, the approach adopted by the ITAT in dismissing the application for recall of an order, cannot be countenanced, particularly, since Rule 24 of the ITAT Rules, extracted hereinabove mandates the ITAT to decide the appeal on merits. In fact this approach has rendered the liberty granted in the order dated 18th October, 2016 as nugatory. The sufficient cause for non-appearance of the petitioner company at the time of disposal of the appeal, as provided in the proviso to Rule 24 of the ITAT Rules has also lost its meaning because of the approach adopted by the ITAT, especially, when there is no limitation provided in Rule 24 of the ITAT Rules. The ITAT has chosen to rely upon its own decision in Commissioner of Income-Tax vs. Multi Plan India (P) Ltd. 38 ITD 320 (Del) and Estate of Late Tukojirao Holkar vs. CWT: 223 ITR 480 (M.P), which is completely misplaced. The ITAT has misread the provision of law and has erroneously dismissed the application for recall. It was necessary for the ITAT to exercise its jurisdiction and afford an opportunity of rehearing the appeal that had been dismissed in the absence of the appeal. Even otherwise, we are of the view that it was the duty and obligation of the ITAT to dispose of the appeal on merits after giving both the parties an opportunity of being heard. The ITAT should have been conscious of the fact that the appellant was not afforded the opportunity to argue the case on merits and for this reason it had given the liberty to apply afresh, while dismissing the appeal for non-prosecution. There was thus no cogent reason for the tribunal not to entertain the application for recall. The ITAT has ignored the decision of the Supreme Court in CIT vs. S.Chenniappa Mudaliar (supra) in the correct perspective.
17. For the foregoing reasons, the course adopted by the ITAT at the first instance, by dismissing the appeal for non-prosecution, and then compounding the same by refusing to entertain the application for recall of the order, cannot be sustained. We, therefore have no hesitation in quashing the impugned order. Accordingly, the present petition is allowed. The order dated 30.08.2019 is quashed and the matter is remanded back to the ITAT with a direction that they shall hear and dispose of on merits. The parties shall now appear before the ITAT on 05.02.2020. The registry is directed to send a copy of this order to the ITAT.”
5. The aforesaid view of the Hon’ble Delhi High Court will apply with equal force to the powers of the CIT(A) to dismiss appeal for non prosecution. Learned AR submitted that inasmuch as the impugned order is an ex parte order without spelling out any reasons, it cannot be sustained. Learned DR, on the other hand, stated that when the assessee does not respond to the repeated notices, the CIT(A) is left with no option but to pass ex parte order. He, therefore, justified the impugned order.
6. On a careful consideration of the matter, we find that though the impugned order states that more than three times the notice was issued but nowhere had it been noted in the impugned order that such a notice was served on the assessee. In the given facts and circumstances of the case, we are of the view that interest of justice would be met, if the order of CIT(A) is set aside and the appeal of the Assessee before CIT(A) be directed to be decided afresh after affording opportunity of being heard to the Assessee. We hold and direct accordingly.
In the result, the appeal is treated as allowed for statistical purpose.
Pronounced in the open court on the date mentioned on the caption page.