M/S AUROFOOD P LTD.,CHENNAI vs. DCIT, CORPORATE WARD-1(1), CHENNAI

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ITA 67/CHNY/2022Status: DisposedITAT Chennai20 May 2022AY 2007-083 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal held that the CIT(A) should have decided the appeal on merits with a speaking order, rather than dismissing it for default. An ex-parte order without adjudicating the issues is not maintainable.

What were the facts?

The assessee's appeal was dismissed by the CIT(A) for non-prosecution without discussing the merits of the fringe benefit tax assessment. The assessee contended that the order was passed ex-parte and in violation of natural justice.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order for non-prosecution without adjudicating the appeal on merits, thereby violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 115WE,Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL

Hearing: 12.05.2022Pronounced: 20.05.2022

आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 10.01.2022. The assessment was framed by the DCIT, Corporate Circle 1(1), Chennai for the assessment year 2007-08 u/s.115WE(3) r.w.s. 254 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 09.11.2019.

1.

2 2. The first issue raised by assessee is violation of principles of natural justice and passing ex-parte order. For this, assessee has raised following three grounds:- “1. The order of National Faceless Appeal Centre, Delhi dated 10.01.2022 for the above assessment year is contrary to law, facts , and in the circumstances of the case.

2.

The NFAC erred in passing the order ex-parte and ought to have appreciated that any order passed in violation of principles of natural justice should be reckoned as nullity in law inasmuch as further ought to have appreciated that the findings of non compliance of the notices issued in the appellate proceedings in Para 4 of the impugned order were completely erroneous and ought to have appreciated that perverse findings of facts would vitiate the ex-parte appellate order.

3. The NFAC erred in confirming the fringe benefit tax assessment u/s 115WE of the Act without assigning proper reasons and justification and ought to have appreciated that the computation of fringe benefits for taxation on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.”

3.

At the outset, the ld.counsel for the assessee took us through the order of CIT(A) and stated that the CIT(A) only dismissed the appeal for non-prosecution simpliciter and there is no discussion on facts how the total value of fringe benefit was adopted by the assessee and made addition of Rs.18,62,133/-. When these facts were confronted to ld. Senior DR, he could not controvert the same.

4.

After hearing both the sides and going through the order of CIT(A), we noted that the CIT(A) simpliciter dismissed the appeal

3 for non-prosecution. We are of the view that unless the statute authorizes a quasi judicial authority to dismiss the appeal for default expressly or by inevitable implication, the appellate authority has to decide the appeal and not to dismiss it for default. Probably, appellate authority has to decide the appeal on merits by a speaking order. Where an appeal has been disposed off ex-parte and without adjudicating the issue, ex-parte order is not maintainable. Hence, the order passed by the CIT(A) is not maintainable and accordingly the same is reversed. Accordingly the order of CIT(A) is set aside and the matter is remanded back to his file for fresh adjudication after allowing reasonable opportunity of being heard to the assessee.

5.

In the result, the appeal of the assessee is allowed for statistical purposes.

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