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Facts
The assessee, a non-profit company, filed an appeal with a delay of 235 days. The delay was attributed to changes in administrative personnel and legal counsel, leading to a lack of continuity and oversight in following up on pending appeals. The assessee discovered the order against them only during a routine check of the ITBA portal during their statutory audit.
Held
The Tribunal held that the First Appellate Authority (FAA) wrongly dismissed the appeal ex-parte without adjudicating on merits, despite the assessee's non-compliance with notices. The FAA has jurisdiction to decide appeals on merits even in the absence of the assessee, as supported by judicial precedent. Therefore, the FAA's order was set aside.
Key Issues
Whether the First Appellate Authority was justified in dismissing the appeal ex-parte for non-compliance without adjudicating on merits? Whether sufficient cause was shown for condoning the delay in filing the appeal?
Sections Cited
250 of the Income Tax Act, 1961, Sec.25 of the Companies Act, 1956
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE KAND SHRI S.R. RAGHUNATHA
आदेश/ O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal filed by the assessee is directed against the Addl/JCIT(A), Raipur order dated 21.01.2025, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18.
2 -: 2. There is a delay of 234 days in filing the appeal. The Managing Director of the assessee company has filed an affidavit stating therein the reasons for belated filing of this appeal. It is stated that the assessee is a Non-profit company u/s.25 of the Companies Act, 1956. It is submitted that during the course of the statutory audit for the financial year 2024–25, for disclosure purposes in the financial statements to ascertain the litigation status of various appeals pending before the Department, assessee had accessed the ITBA portal. This exercise was done by assessee in the month of September, 2024 and it was noticed for the first time, the order passed by the CIT(A) for the assessment year 2017-18. It was further submitted that the assessee being a Government Undertaking, it is subject to periodic changes in its administrative personnel and legal counsel. It was submitted that due to such lack of continuity and regular follow-up with the concerned counsel, the appellate order passed by the CIT(A) had escaped the attention of the management within the prescribed time limit for filing further appeal before the Tribunal. Immediately upon becoming aware of the impugned order, the assessee approached its counsel, and upon his advice filed the present appeal before the Tribunal on 20.11.2025 with a delay of 235 days. On perusal of the reason stated, we find there is sufficient cause for delay in filing this appeal before the Tribunal. Hence, we condone the delay in filing the appeal and proceed to dispose off the appeal on merits.
3 -: 3. At the very outset, we notice that the order passed by the First Appellate Authority (FAA) is ex-parte, since there was no compliance from the assessee to four notices issued from the office of the First Appellate Authority. We also note that the FAA had dismissed the appeal of the assessee in-limine without adjudicating the issues on merits.
The Ld.AR submitted that the FAA has dismissed the appeal for non-compliance and not on merits. It was prayed, in the interest of justice and equity, assessee may be provided with one more opportunity to present its case before the FAA.
The Ld.DR submitted that adequate opportunities were provided from the offices of the FAA and there is no violation of principles of natural justice. However, he could not controvert the fact that the FAA has dismissed the appeal for non-compliance.
We have heard rival submissions and perused the materials on record. The proceedings before FAA was ex-parte, since the assessee did not respond to various notices issued. We strongly deprecate the nonchalant attitude of the assessee in not responding to the notices issued from the offices of the FAA. We also noted that the FAA has simpliciter dismissed the appeal for non-compliance and 4 -: not adjudicated or decided merits of the case. We find that appellate authority has no jurisdiction to dismiss the appeal for default of non-compliance without going into merits. The FAA is bound to decide the appeal on merits even in the absence of assessee. This view of ours is supported by the decision of Hon’ble High Court of Madras in the case of Southern Steel Industries vs. AAC (CT), reported in [1996] 101 STC 273 (Mad). In term of the above, the order of FAA is set aside and matter remanded back to his file for fresh adjudication on merits after allowing reasonable opportunity of being heard to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 10th March, 2026 at Chennai.