Loading judgment…
Facts
The assessee's appeal was dismissed by the Ld. First Appellate Authority (Ld. FAA) for non-compliance and failure to respond to notices. The Ld. FAA also mistakenly noted the Assessment Year as 2017-18 instead of 2016-17. The assessee claimed non-compliance was due to unavoidable circumstances and sought a fresh opportunity.
Held
The Tribunal held that substantive justice should prevail over procedural lapses. Given the assessee's readiness to present its case and the principles of natural justice, a final opportunity was granted. The Ld. FAA's order was set aside, and the matter was restored for adjudication on merits.
Key Issues
Whether the appeal, dismissed for non-compliance, should be restored to the file of the First Appellate Authority to decide on merits, considering unavoidable circumstances and principles of natural justice?
Sections Cited
201, 201(1), 201(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by M/s. Sri Venkateswara Cine Chitra LLP (“the assessee”), feeling aggrieved by the order passed by the Learned Addl/JCIT(A), Indore (“Ld. First Appellate Authority”), dated 13.02.2025 for the A.Y. 2016-17. 2. The assessee has raised the following grounds of appeal :
1. 3. The brief facts of the case are that the assessee had filed an appeal before the Ld. First Appellate Authority against the order passed on 31.03.2023 by the Learned Assessing Officer (“Ld. AO”) under section 201(1) & 201(1A) of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2016–17. However, during the appellate proceedings before the Ld. First Appellate Authority, the assessee failed to respond to the notices issued by the appellate authority. Due to the absence of compliance, the Ld. First Appellate Authority proceeded to dismiss the appeal ex parte, without adjudicating the matter on merits. It is also found that the Ld. First Appellate Authority has mentioned the A.Y. as 2017-18 instead of A.Y. 2016-17 in its order dated 13.02.2025.
4. Aggrieved by the said dismissal, the assessee is in appeal before this Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that, the non-compliance before the Ld. First Appellate Authority was neither wilful nor deliberate, but due to unavoidable circumstances. It was submitted that the assessee was not in a position to submit its reply or attend the hearing before the Ld. First Appellate Authority, and consequently, the appeal could not be prosecuted on merits. The Ld. AR prayed before the Bench that, in the interest of justice and fairness, one more opportunity may be granted to the assessee to present its case and file necessary evidence before the Ld. First Appellate Authority. He submitted that the assessee is now fully prepared to substantiate its claims and undertakes to fully cooperate in the appellate proceedings. Accordingly, the Ld. AR requested that the issue may be remanded to the file of the Ld. First Appellate Authority for de novo adjudication.
5. Per contra, the Learned Departmental Representative (“Ld. DR”) strongly opposed the request for remand and submitted that the assessee was provided sufficient opportunity during the course of appellate proceedings before the Ld. First Appellate Authority, which the assessee failed to avail. The Ld. DR argued that once an assessee fails to prosecute its appeal despite repeated notices, no further opportunity is warranted, and the dismissal by the Ld. First Appellate Authority was justified in law. He therefore supported the impugned order and urged for dismissal of the present appeal.
We have heard the rival submissions and also gone through the record in the light of the submissions made by either side. It is an admitted fact that the appeal of the assessee was dismissed in limine by the Ld. First Appellate Authority solely on the ground of non-appearance and non-compliance to the notices issued. It is also not in dispute that the appeal has not been decided on merits due to non-compliance on the part of the assessee. Further the Ld. First Appellate Authority has made an error in mentioning the A.Y. as 2017-18 instead of A.Y. 2016-17 its order dated 13.02.2025. The Hon’ble Supreme Court and various High Courts have consistently held that substantive justice should prevail over procedural lapses.
In our considered opinion, given that the assessee has now expressed readiness to furnish all relevant materials and participate in appellate proceedings, and in view of the principles of natural justice, it would be just and appropriate to provide one final opportunity to the assessee to pursue its appeal before the Ld. First Appellate Authority. Accordingly, we set aside the impugned order of the Ld. First Appellate Authority and restore the matter to his file, with a direction to provide reasonable opportunity of being heard to the assessee, to file necessary evidence in support of its claims, and thereafter, to adjudicate the appeal on merits in accordance with law. We also direct the assessee to extend full cooperation and to appear before the Ld. First Appellate Authority on the date of hearing so fixed, failing which the Ld. CIT(A) shall be at liberty to decide the appeal as per law. In view of the above discussion, the appeal filed by the assessee is allowed for statistical purposes with a direction to the Ld. First Appellate Authority to decide the appeal afresh on merits, after granting one more opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 8th July, 2025.