M/S SPECIFIC ENGINEERING CORPORATION ,NAVI MUMBAI vs. ITO 15(3)(4), MUMBAI

Shri Vaibhav Bhajani appearing on behalf of the assessee at the outset submitted that the impugned order was passed by the CIT(A) in an ex-parte proceedings. The ld. Authorized Representative for the assessee submitted that if an opportunity is granted to the assessee to present the case before the CIT(A), the assessee would be able to make out the case on merits and the entire addition would be deleted.

Per contra Ms. Smita Verma representing the Department submitted that the notice of hearing was given to the assessee but the assessee failed to appear before the CIT(A),hence, appeal of the assessee was dismissed by the CIT(A).

Both sides heard. A perusal of the impugned order reveals that the CIT(A) in an ex-parte proceedings has dismissed the appeal of assessee for non-prosecution. The CIT(A) is under statutory obligation to decide the appeal filed by the assessee on merits after granting fair opportunity of hearing, in accordance with law. The Hon'ble Bombay High Court in the case of CIT vs. Premkumar Arjundas Luthra(HUF), 240 Taxman 133 has held that once an appeal is filed u/s 246 of the Income Tax Act, 1961 [in short ‘the Act’] neither it is open to the assessee to withdraw appeal, nor the CIT(A) can dismiss appeal on account of non-prosecution by the assessee. The CIT(A) is obliged to dispose of the appeal on merits. Ergo, the impugned order is quashed and appeal of the assessee is restored back to the file of CIT(A) for deciding the appeal on merits after affording reasonable opportunity of hearing to the assessee, in accordance with law The assessee is directed to appear before the CIT(A) on service of notice and co-operate in the proceedings.

In the result, appeal by the assessee is allowed for statistical purposes in the aforesaid terms.