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Facts
The assessee's appeal before the CIT(A) was dismissed in limine for non-prosecution. The assessee then filed an appeal before the ITAT, delayed by 185 days, challenging the ex-parte order and seeking an opportunity to present their case.
Held
The ITAT condoned the delay, finding it to be due to bonafide reasons. The Tribunal noted that the CIT(A) order lacked merit adjudication and was ex-parte. Consequently, the matter was set aside and remanded to the CIT(A) for fresh adjudication, with one final opportunity for the assessee to be heard.
Key Issues
Validity of an ex-parte order by CIT(A) without merit consideration due to assessee's non-prosecution and condonation of delay in filing appeal.
Sections Cited
143(3), 250(4), 250(6), 251(1)(a), 251(2), 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI PAWAN SINGH, JM & SHRI ARUN KHODPIA, AM
O R D E R
Per Arun Khodpia, AM:
This appeal is filed by the assessee challenging the order of Addl/JCIT(A), Prayagraj [for short “ld. CIT(A)”] dated 12.02.2025 for the AY 2013-14, arises from the assessment order passed under section 143(3) of the Income Tax Act, 1961 (the Act) dated 11.03.2016 by the ITO, W-27(3)(2). The grounds of appeal raised by the assessee are as under:
Sangeeta Motilal Shahani “1) Under the facts and circumstances of the case and in law order passed by the Ld. Addl. CIT(A) being bad in law on various counts and hence the same should be annulled. 2) Under the facts and circumstances of the case and in law the ex-party order passed by the Ld. Addl. CIT(A) being devoid of natural justice and that the same should be set aside. 3) Under the facts and circumstances of the case and in law the Ld. Addl. CIT(A) has erred in passing an order ex-party and thereby confirming the addition of Rs. 18,79,000/- made by the AO and that the same should be deleted.”
It is observed that the filing of present appeal by the assessee was barred by limitation being filed with a delay of 185 days. To explain the reasons for aforesaid delay, an application for condonation of delay has been filed by the assessee along with affidavit to claim that the delay was occasioned on account of reasons beyond the control of the assessee. We have considered the contents of the petition for condonation of delay along with the affidavit of the assessee and find substance in the submissions of the assessee that the delay was occasioned under bonafide error without any malafide intent or intentional act of the assessee. Neither any submission to oppose the condonation of delay have been made by the revenue, by placing any evidence to contradict the aforesaid plea of the assessee. Accordingly, we deem it appropriate to condone the delay of 185 days in the present case.
Brief facts of the case are that the return was filed by the assessee on 30.03.2013, which was processed under section 143(1) of the Act, thereafter selected for scrutiny under section 143(3) of the Act. After the deliberations the 2 Sangeeta Motilal Shahani assessment was completed with an addition on account of undisclosed income under section 68 of the Act to the tune of Rs. 20,03,990/-, which was challenged by the assessee before the First Appellate Authority (FAA) i.e. ld. CIT(A), however before the FAA the assessee has not made any compliances, therefore the appeal of assessee was dismissed in limine on account of non- prosecution.
Being aggrieved with the aforesaid order, assessee preferred an appeal before us challenging the decision of ld. CIT(A).
At the outset, the ld. AR representing the assessee submitted that the order passed by ld. CIT(A) was an ex-parte order, wherein the assessee was unable to attend the hearings and to make necessary compliances. Also, there was no finding by the ld. CIT(A) on merits based on material available on record, he merely affirmed the decision of AO in absence of any submission by the assessee. Ld. AR, therefore requested for one more opportunity to the assessee to represent her case before the ld. CIT(A), following the principles of natural justice. Accordingly, it was the prayer that the matter may please be set- aside to the file of ld. CIT(A) for fresh adjudication.
Per contra, the ld. DR submitted that sufficient opportunities were provided by ld. CIT(A) to the assessee, however assessee chooses not to represent her case, therefore restoration of appeal back to the ld. CIT(A) would
We have considered the rival submissions and perused the material available on record. Admittedly in present case the order passed by ld. CIT(A) has no finding qua the merits of the issue; it was just reiteration of the findings provided by the AO. Since, there was no submission by the assessee before the ld. CIT(A), the issue remains unattended in terms of discussion and decision on merits to adhere to the mandate of section 250(4) & (6) of the Act.
We therefore find it appropriate to provide one more opportunity to the assessee to represent her case before the ld. CIT(A), the assessee is directed to remain compliant towards the notices issued in set-aside appellate proceedings, failing which the ld. CIT(A) would be at liberty to decide the issues in accordance with mandate of law. The assessee would not be provided with any further opportunities.
Our aforesaid decision is in accordance with the ratio of law laid down by the Hon’ble Mumbai High Court in the case of Hon'ble Mumbai High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF)- [2016] 69 taxmann.com 407 (Bombay) are as under:
Sangeeta Motilal Shahani "8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non- prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.”
In view of aforesaid facts, circumstances, decision and our observations, the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 09-01-2026.
Sd/- Sd/- (PAWAN SINGH) (ARUN KHODPIA) Judicial Member Accountant Member Mumbai, Dated : 09-01-2026. *SK, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT
BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai