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Facts
The assessee, a District Central Co-operative Bank, filed appeals against ex-parte orders of the CIT(A) for AY 2016-17 and 2017-18. The appeals were dismissed by the CIT(A) for non-prosecution due to alleged non-compliance with hearing notices.
Held
The Tribunal held that the CIT(A) order was passed without adjudicating on merits and in violation of Section 250(6) of the Act. The Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file for a fresh decision on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without deciding on merits, and whether the order violated statutory provisions.
Sections Cited
143(2), 142(1), 143(3), 36(1)(viia), 250, 271(1)(c), 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: MS. ASTHA CHANDRA & SHREE DR. DIPAK P. RIPOTE
आदेश / ORDER
PER ASTHA CHANDRA, JM : Two appeals filed by the assessee are directed against the two separate orders dated 27.03.2025 and 26.03.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Years (“AYs”) 2016-17 and 2017-18. Since the issue(s) involved are identical, these were heard together and are being disposed of by this common order.
None appeared for and/or on behalf of the assessee when the matter was called for hearing on 09.06.2025. However, the Ld. DR was present for the hearing. The Ld. DR, at the outset, brought to our attention that the order of the Ld. CIT(A) is an ex-parte order without there being any adjudication on merits of the case. We, therefore deem it fit to decide the appeal after hearing the Ld. DR and the material available on records.
ITA No. 1140/PUN/2025, AY 2016-17
The assessee has raised the following grounds of appeal:-
1. On the facts and the circumstances of the case and in law, learned CIT appeal erred in passing Ex-parte order u/s 250 of The Income Tax Act, 1961 without discussing the merit of the case, appellant prays for restoring the matters to the file of learned CIT Appeal for considering the appeal on merit. The notice for hearing was send to email address which was not used by the assessee and hence the assessee was unable to comply with the notices.
1. 2. On the facts and in the circumstances of the case the Hon'ble CIT(A) has erred in law and on merit in making addition of Rs.58,41,018/- on account of Amortization of Government Securities which was allowable in accordance with the CBDT guidelines issues in accordance with CBDT circular No. 17/2008 dated 26.11.2008.
3. On the facts and in the circumstances of the case Hon'ble CIT(A) has erred in law and on merit in making addition of Rs. 1,31,30,000/- on account of Provision for Bad and Doubtful Debts u/s. 36(1) (viia) of the Act, when such provision was in accordance with the Rule 6ABA of the Income Tax Act, 1961.
4. On the fact and in the circumstances of the case the Hon'ble CIT(A) has erred in law on merit in making additions of Rs. 5,97,00,624/- on of Park Interest when this interest was allowable in accordance with the Bombay high court decision on the issue and the issue was fully covered in the assessee's own case by the orders of CIT(A) and Pune ITAT.
5. On the facts and in the circumstances of the case the Hon'ble CIT(A) has erred in law and on in merit in making addition of Rs. 53,00,000/- on account of Provision of Standard Assets.
6. On the fact and in the circumstances of the case the Hon'ble CIT(A) has erred in law and on in merit in making additions of 42,64,050/- on account of Nominal membership fees collected by the assessee when such receipt was a capital receipt.
7. On the facts and in the circumstances of the case the Hon'ble CIT(A) erred in law and on merit in computing set-off carry forward loss available to the assessee after giving appeal effect to earlier years assessment orders.
8. On the facts and in the circumstances of the case the Hon'ble CIT(A) erred in law and on merit in levying penalty u/s. 271(1)(c) of the Act.
9. On the facts and in the circumstances of the Act, the Hon'ble CIT(A) has erred in law and on in merit in levying interest u/s. 234A, 2348, 234C of the Act.
10. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
4. Briefly stated the facts are that the assessee is a District Central Co- operative Bank carrying on business of banking. The assessee e-filed its return of income on 15.10.2016 showing income of Rs.8,28,58,536/- before setting-off of brought forward losses. The case was selected for scrutiny on the basis of parameter at Para 1(ii) of the Manual Compulsory Guidelines of CBDT vide Instruction No.4/2016 dated 13.07.2016. Accordingly, notice u/s 143(2) of the Income Tax Act, 1961 (the “Act”) on 29.09.2017 was issued by the ACIT, Ratnagiri Circle, Ratnagiri, which was duly served on the assessee within the prescribed time limit, for compliance. In response, the assessee has furnished certain information. Subsequently, a notice under section 142(1) of the Act along with a questionnaire dated 26.07.2018 was issued to the assessee for compliane by 14.08.2018 requisitioning various details and explanation for the purpose of completion of the assessment. However, no compliance has been made by the assessee in response to the said notice. The assessment was therefore completed by the Ld. Assessing Officer (“AO”) after verification of the return of income and other details available on record, vide his order dated 28.12.2018 u/s 143(3) of the Act by making an addition of - (i) Rs.58,41,018/- on account of - Amortization of Government Securities; Rs.1,31,30,000/- on account of Provision of Bad and Doubtful Debts u/s 36(1)(viia) of the Act; (iii) Rs.5,97,00,624/- on account of Park Interest; (iv) Rs.53,00,000/- on account of Provision of Standard Assets; and (v) Rs.42,64,050/- on account of Nominal membership fees, totaling to Rs.17,10,94,228/-.
Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. There was non-compliance of notices of hearing sent via ITBA portal. Hence, the Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non- prosecution, observing as under: “4.1. The appeal was filed by the appellant on 19.01.2019 against the order of 143(3) of the Act passed by ITO, Ward 3 Ratnagiri In connection to the appeal opportunities were provided by CIT(A), NFAC to the appellant to substantiate his grounds of appeal on following dates : Sr. No. Date on which hearing notices were issued 1 03.10.2019 2 24.10.2019 3 14.11.2019 4 29.02.2020 5 08.01.2021 6 12.03.2025
4.2. Against all these notices by CIT(A), NFAC, there was no response from the appellant, as has been brought out above, it is evident that the appellant is not interested in filing any details during the appellate proceedings and avail the opportunity under the principle of natural justice. In response to the notices issued, even adjournment was not sought. In such situation, the only conclusion which can be drawn is that the appellant is not interested in pursuing the appeal. 4.3. It has been held by the Hon'ble Supreme Court in the case of BN. Bhattacharjee and Another (118 ITR 461) that appeal does not mean merely filing of memo of appeal but also pursuing it effectively. In cases where the appellant does not want to pursue the appeal, appellate authorities have inherent power to dismiss the appeal for non-prosecution as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009 While deciding the issue, the Hon'ble High Court of Bombay has referred to the observations of Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Mannalal Vs. Nandramdas Dwarkadas AIR 1958 MP 260 wherein it was observed :- "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses...” 4.4. This appeal has been filed by the appellant claiming that the action of the Assessing Officer is not supported by facts and laws and that it is unjust. In such a situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, if any, to support the claim. The 'burden of proof is always on the person who makes the claim. In this case, it is the appellant who has made the claim by filing the appeal. Thus, in cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where, however, the appellant claims exemption, the burden is on the appellant to prove it to be exempt. Same is the position in case of all allowances, deductions, claims or loss, etc. Since an appeal is nothing but the claim of the appellant that he has been unduly unjustifiably taxed, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so. From the conduct of the appellant as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal. 4.5. Hence, respectfully following the above mentioned judicial pronouncements and in view of the facts of the case, the grounds of appeal filed by the appellant is hereby dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the ground of appeal relate thereto. Although, there are number of grounds raised by the assessee on merits challenging the impugned additions/ disallowances made by the Ld. AO, the assessee in its ground no.1 has challenged action of the Ld. CIT(A)/NFAC in passing the ex-parte order without adjudicating the issues involved on merits and therefore praying that the matter be restored to the file of Ld. CIT(A)/NFAC for considering the appeal on merit.
We have heard the Ld. DR and perused the material on record. Admittedly, there was non-compliance of notices before the Ld. CIT(A)/NFAC, however, the assessee has contended that the notices for hearing were sent to the email address which was not in the regular use of the assessee which resulted in such non-compliance. The appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision in the case of CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and various other cases cited therein and dismissed the appeal of the assessee for want of prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex- parte where the assessee does not prosecute his appeal in spite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A)/ NFAC has passed the order without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
On the facts and in the circumstances of the case set out above, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC and restore the matter back to his file with a direction to decide the appeal afresh by pass a speaking order on merits as per facts and law, after allowing reasonable opportunity of being heard to the parties. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon, without seeking adjournment under any pretext unless for sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. The assessee is also directed to provide the latest email id and contact details to the Department for receiving notices from ITBA portal and remain vigilant in accessing the same and responding to the notice(s) of hearing. We direct and order accordingly. All the grounds raised by the assessee are therefore allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
AY 2017-18 10. We find that the facts and the grounds of appeal in for AY 2017-18 is identical to the grounds raised in for AY 2016-17 except for the variance in amounts. The Ld. CIT(A) has also passed an ex-parte order for both the AYs involved for the same reasons reproduced in the preceding paragraph for AY 2016-
17. In this view of the matter, the finding given by us while adjudicating would mutatis mutandis apply to the appeal in as well. Accordingly, the grounds of appeal raised by the assessee in are allowed for statistical purposes in the same terms.
Order pronounced in the open court on 27th June, 2025.