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Facts
One appeal (ITA No.783/Bang/2025) was filed against an order u/s 143(3) of the Income Tax Act, 1961, but it was not filed correctly before the Tribunal. Two other appeals (ITA Nos.905 & 906/Bang/2025) were dismissed by the CIT(A) for want of prosecution without deciding on merits.
Held
The Tribunal held that the first appeal was not maintainable as filed and dismissed it. For the other two appeals, the Tribunal held that the CIT(A) cannot dismiss an appeal for non-prosecution without deciding on merits, and restored these appeals to the CIT(A) for fresh adjudication.
Key Issues
Whether an appeal against an order passed u/s 143(3) can be directly filed before the Tribunal? Can CIT(A) dismiss an appeal for non-prosecution without deciding the merits of the case?
Sections Cited
143(3), 250, 251, 246A
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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI DIPAK P. RIPOTE & SHRI PRAKASH CHAND YADAV
All these three appeals are filed by the assessee. Since common issues are involved in these appeals, we are deciding these appeals together by way of this consolidated order.
, 905 & 906/Bang/2025 KMV Projects Limited, Serilingampally, Telangana Page 2 of 5 2. So far as is concerned, it is observed that this appeal is related to assessment year 2018-19. Perusal of Form 36 column 3 would show that the assessee has filed appeal against the order of AO passed u/s 143(3) of the Income Tax Act, 1961 (in short “The Act”). During the course of hearing, the Bench has raised a query from the assessee as to whether the assessee can directly file an appeal before the Tribunal against the order of the AO even if such order is not related to the DRP route. Counsel for the assessee candidly accepted that there is no provision under the Act that an assessee can file appeal directly before the Tribunal against the order of AO. It is interesting to note that in the grounds of appeal also, the assessee is impugning the order of AO passed u/s 143(3) of the Act instead of the impugning the order of ld. CIT(A). Therefore, we are of the firm opinion that this appeal is not at all maintainable before the ITAT and hence the same is dismissed. However, liberty is granted to the assessee to file correct appeal with an application for condonation of delay.
& 906/Bang/2025 are concerned, at the outset, we observe that in both these years, the ld. CIT(A) has dismissed the appeals of the assessee for the want of prosecution. Perusal of the orders of ld. CIT(A) would show that the ld. CIT(A) is not at all discussed the merits of the case in terms of the provisions of section 250 (6) of the Act.
Ld. Counsel appearing on behalf of the assessee craved that the matter may kindly be restored to the file of ld. CIT(A) for deciding afresh.
Ld. D.R. relied upon the orders of authorities below.
, 905 & 906/Bang/2025 KMV Projects Limited, Serilingampally, Telangana Page 3 of 5 6. After considering rival submissions, we are of the opinion that the matter requires fresh adjudication at the end of ld. CIT(A) because it is settled position of law that ld. CIT(A) has no power to dismiss an appeal without discussing the grounds as well as contentions of the assessee. A reference can be made to the judgement of Hon’ble Bombay High Court in the case of CIT (Central), Nagpur Vs. Premkumar Arjundas Luthra (HUF) reported in 297 CTR 614, wherein the Hon’ble Bombay High Court has held as under:
“7. An appeal is filed with the CIT(A) from appealable orders listed in Section 246A of the Act. We find that the procedure in appeal before the CIT(A) and the powers of the CIT(A) are governed by Sections 250 and251 of the Act respectively. The relevant provisions for consideration are as under:— 'Procedure in appeal 250 (1) . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . (4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). (5) . . . . . . . . . . . . . . . . . . (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (6A) . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . Powers of the Commissioner (Appeals) "Section 251(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment. (aa) . . . . . . . . . . . . . . . . . . (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty." (c) . . . . . . . . . . . . . . . . . . (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation. - In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in , 905 & 906/Bang/2025 KMV Projects Limited, Serilingampally, Telangana Page 4 of 5 which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.' 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 1stJune, 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 co-terminus 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.”
6.1 Keeping in view of the above order of Hon’ble Bombay High Court, both these appeals of the assessee in & 906/Bang/2025 are restored to the file of ld. CIT(A) for deciding afresh in accordance with law. Needless to say, that ld. CIT(A) would grant meaningful opportunity to the assessee before passing any order.
ITA Nos.783, 905 & 906/Bang/2025 KMV Projects Limited, Serilingampally, Telangana Page 5 of 5 7. In the result, & 906/Bang/2025 are allowed for statistical purposes and is dismissed. Order pronounced in the open court on 21st Aug, 2025