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Facts
The assessee's appeal was dismissed by the CIT(A) for non-prosecution due to failure to provide submissions or attend hearings despite multiple notices. The original assessment under Section 144 resulted in a significant demand.
Held
The Tribunal held that while the assessee's negligence was apparent, penalizing without a hearing on merits, especially given the high demand, goes against principles of natural justice. The CIT(A)'s order was set aside.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without adjudicating on merits, and whether principles of natural justice were violated.
Sections Cited
250, 144, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated 27/06/2024 , passed under Section 250 of the Income Tax Act, 1961. The assessee has raised the following grounds of appeal :
1. That the learned CIT (Appeals) has erred in law and on facts in dismissing the appellant appeal without adjudicating the grounds raised on merits. solely on the basis of alleged non-prosecution
2. That the learned CIT (Appeals) failed to appreciate that under section 250(6) of income tax act 1961, he was duly bound to dispose of appeal by ITA 1132/CHD/2025 A.Y. 2017-18 2 passing a speaking order on each ground of appeal
, even if the appellant was absent or not represented
3. That the action of CIT (Appeals) in ttreat1ng the appellant as not 1ntersted in pursuing the appeal and dismissing it in limine is contrary to the binding judicial precedents
4. That the learned CIT (Appeals) erred in not deciding the appeal on merits despite admitting that the assessing officer passed order u/s 144 without granting adequate opportunity thereby violating principles of natural justice
5. That the appellant craves leave to add, amend, withdraw or substitute any of above grounds of appeal at the time of hearing.
Background and AO's Order:
The assessment in this case was originally completed by the Assessing Officer (AO), Ward 6(4), Chandigarh. The order was passed under Section 144 (Best Judgment Assessment) on 17/12/2019. The AO assessed the income at Rs. 3,33,190/-, leading to a total demand of Rs. 99,37,160/-, including interest and penalties.
Order of the CIT(A):
Aggrieved by the AO's order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) [CIT(A)].The CIT(A) noted a delay of 27 days in filing the appeal but condoned it based on the health issues cited by the appellant. However, the CIT(A) observed that despite multiple notices issued between December 2020 and June 2024, the appellant failed to provide written submissions or attend hearings. Consequently, the CIT(A) dismissed the appeal for non-prosecution, relying on the principle of Vigilantibus et non dormientibus jura sub veniunt.
ITA 1132/CHD/2025 A.Y. 2017-18 3 Submissions of the Authorised Representative (AR):
The AR appearing for the assessee submitted that the non- compliance before the CIT(A) was not intentional but due to bona fide reasons, including health issues and difficulty in engaging counsel. The AR argued that the demand of Rs. 99,37,160/- is disproportionate to the assessed income and prayed that the matter be remanded to the file of the AO to allow the assessee to explain the source of credits on merits.
Submissions of the Departmental Representative (DR):
The DR, appearing for the Department, strongly supported the orders of the AO and the CIT(A). The DR contended that the appellant was provided more than four opportunities over four years but chose not to respond. Therefore, the DR argued that the dismissal for non- prosecution was fully justified.
Decision of the Tribunal:
After hearing both sides and perusing the record, we find that the CIT(A) did not adjudicate the matter on merits but dismissed it for want of prosecution. While the assessee’s negligence is apparent, we believe in the principle that no one should be penalised without being heard on the merits of the case, especially given the high tax demand.
ITA 1132/CHD/2025 A.Y. 2017-18 4 Directions:
The order of the CIT(A) is set aside, and the case is remanded back to the file of the AO for fresh assessment. This is subject to the following:
I. The Appellant shall pay a cost of Rs. 10,000/- to the Poor Patient Relief Fund of PGI Hospital, Chandigarh within one month. II. The Appellant is directed to be vigilant and cooperate with the AO in the set-aside proceedings.
Conclusion:
The appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 29th December, 2025.