CHINNAPAIYA GOUNDER MANICKAM,DHARMAPURI vs. ITO WARD 1, DHARMAPURI

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ITA 705/CHNY/2025Status: DisposedITAT Chennai26 June 2025AY 2017-18Bench: SHRI GEORGE GEORGE K (Vice President)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the FAA has no jurisdiction to dismiss an appeal for non-compliance without adjudicating on merits. The order of the FAA was set aside. The matter was remitted to the AO for fresh adjudication, with an opportunity for the assessee to be heard.

What were the facts?

The assessee's appeal before the First Appellate Authority (FAA) was dismissed ex-parte for non-compliance with notices. The assessment was completed on a best judgment basis under Section 144 of the Act. The assessee sought one more opportunity to present their case.

What were the issues?

Whether the First Appellate Authority can dismiss an appeal for non-compliance without deciding on merits. Whether the assessee should be granted another opportunity for hearing.

Which sections of the Income-tax Act were involved?

Section 250,Section 144

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Income Tax Appellate Tribunal, ‘B’ (SMC

Before: SHRI GEORGE GEORGE K

Hearing: 26.06.2025Pronounced: 26.06.2025

आदेश/ O R D E R

1.

This appeal filed at the instance of the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 20.01.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18.

2 -: 2. At the very outset, I notice that the order passed by the First Appellate Authority (FAA) is ex-parte, since there was no compliance from the assessee to the various notices issued from the office of the First Appellate Authority. I also note that the FAA had dismissed the appeal of the assessee in-limine without adjudicating the issues on merits. Further, the assessment has been completed on best judgment assessment u/s. 144 of the Act.

3.

The Ld.AR for the assessee submitted that the FAA has dismissed the appeal for non-compliance and not on merits. The Ld.AR further submitted that since the assessee had not filed the return of income or furnished the details within the time given, the assessment was completed on best judgment assessment. 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.

4.

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

3 -: 5. I have heard rival submissions and perused the materials on record. The proceedings before FAA was ex-parte, since the assessee did not respond to various notices issued. I strongly deprecate the nonchalant attitude of the assessee in not responding to the notices issued from the offices of the FAA. I also noted that the FAA has simpliciter dismissed the appeal for non-compliance and not adjudicated or decided merits of the case. I find that appellate authority has no jurisdiction to dismiss the appeal for default of non-compliance without going into merits. The FAA is bound to decide the appeal on merits even in the absence of assessee. This view of mine 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.

6.

Further, I note that the assessment has also been completed on best judgment basis u/s.144 of the Act. In the interest of justice and fair play, I’m of the view that the matter ought to be restored to the files of the AO. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.

Order pronounced in the open court on 26th June, 2025 at Chennai.

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