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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -5, Chennai, dated 01.02.2019 and pertains to assessment year 2013-14.
Ms. S. Sriniranjani, the Ld.counsel for the assessee, submitted that the CIT(Appeals) dismissed the appeal for non- prosecution without considering the grounds raised by the assessee on merit. Referring to the provisions of Section 251 of the Income- tax Act, 1961 (in short 'the Act'), the Ld.counsel submitted that the Parliament in its wisdom conferred a power to enhance the assessment on the CIT(Appeals). According to the Ld. counsel, this power may be exercised provided the CIT(Appeals) disposes of the appeal on merit, therefore, the CIT(Appeals) has failed to exercise the statutory duty conferred on him under the scheme of Income-tax Act.
We heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative also. Under the scheme of Income-tax Act, the CIT(Appeals) is the first appellate authority. The power of the CIT(Appeals) is provided under Section 251 of the Act which reads as follows:-
(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers-- (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment ; (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment ; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.
The CIT(Appeals) has power to enhance the assessment apart from reduce or annul the assessment. He may also confirm or cancel the assessment and penalty orders. However, there cannot be any enhancement of assessment or penalty provided a reasonable opportunity was given to the tax payer. By way of Explanation, the Parliament empowered the CIT(Appeals) to consider and decide any matter arising out of proceedings in which the order appealed against was passed, notwithstanding that such matter was raised before him by the assessee / the appellant.
This Tribunal repeatedly observed that this responsibility to enhance the assessment and to consider and decide the matter arising out of the assessment order notwithstanding that such matter was not raised before him, is a onerous responsibility to safeguard the interest of Revenue. Therefore, the CIT(Appeals) is under the statutory obligation to consider the grounds of appeal on merit irrespective of the fact whether the assessee appeared before him or not. Even though this Tribunal is repeatedly pointing out that the CIT(Appeals) has no power to dismiss the appeal for non- prosecution, the present tendency of the Commissioners(Appeals) is to continue to dismiss the appeal for non-prosecution. This Tribunal may not be able to appreciate this kind of attitude any further. By dismissing the appeal for non-prosecution and forcing the assessee to approach this Tribunal by way of appeal is not only prejudicial to the interests of Revenue but also a financial burden caused on the assessee by way of filing appeal before this Tribunal and apart from the fees to the counsel. This can be avoided if the CIT(Appeals) discharges the statutory responsibility as per law.
Therefore, if the Commissioners (Appeals) continued to dismiss the appeal for non-prosecution, this Tribunal may not have any option except to levy cost as per law. Even though this case is a fit case for levy of cost, we are not doing so in exercise of our discretion hoping that the Commissioners(Appeals) may not dismiss the appeal in future for non-prosecution.
With the above observation, the order of the CIT(Appeals) is set aside and the appeal stands restored on his file. The CIT(Appeals) is directed to dispose the appeal on merit after giving a reasonable opportunity to the assessee. If for any reason, the assessee fails to appear before the CIT(Appeals) after receipt of notice of hearing, it is open to the CIT(Appeals) to dispose the appeal on merit after re-appreciating the material available on record, including the assessment record.
With the above observation, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 6th December, 2019 at Chennai. Sd/- Sd/- (एस. जयरामन) (एन.आर.एस. गणेशन) (S. Jayaraman) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member चे�नई/Chennai, �दनांक/Dated, the 6th December, 2019. Kri.