What did the Tribunal hold?

The Tribunal held that the CIT(A) is required to pass an order on merits, even if the assessee defaults in appearance. Dismissing the appeal solely on default without considering the merits is not sustainable in law.

The assessee, a charitable society registered under Section 12A, failed to appear before the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)]. Consequently, an ex parte assessment order was passed, and the CIT(A) dismissed the appeal on default.

What were the issues?

Whether the CIT(A) can dismiss an appeal solely on the ground of the assessee's default in appearance without adjudicating the matter on merits.

Shri Guru Singh Sabha, New Delhi vs ITO | ITAT Delhi 2018

Income Tax Appellate Tribunal, DELHI BENCH: G, NEW DELHI

Before: SHRI BHAVNESH SAINI & SHRI L.P. SAHU

PER: BHAVNESH SAINI, JM

We have heard the Ld. Representatives of both the parties and perused the orders of the authorities below.

2 SA No.-578/Del/2018 Sh. Guru Singh Sabha.

While considering the stay application, both the parties have consented for disposal of the appeal itself.

The appeal by assessee has been directed against the order of Ld. CIT(A)-36, New Delhi, dated 17.06.2016 for Assessment Year 2011-12.

Briefly the facts of the case are that the assessee is registered U/s 12A of the IT Act. The assessee claimed to be the charitable society, however, in default of putting in appearance before AO, ex parte assessment order was passed disallowing 30% of the expenses which resulted into the taxable income of the assessee computed at Rs. 53,69,509/-. The assessee preferred an appeal before the Ld. CIT(A), however, there was again a default in appearing before the Ld. CIT(A). The Ld. CIT(A) in absence of the assessee dismissed the appeal of assessee.

After considering the rival submissions, we are in view that the matter requires reconsideration at the level of the Ld. CIT(A). Accordingly to Section 250(6) of the IT Act, the Ld. CIT(A) is required to pass the order on merits given reasons for decision in the appellate order. Even if, assessee did not appear before the Ld. CIT(A), he is required to pass the orders on merits. The Ld. CIT(A), however, dismissed the appeal of the assessee only on default of the assessee without on merits. In view of this matter, the order of the Ld. CIT(A) cannot be sustained in law.

We, accordingly, set aside the impugned order and restore the appeal of the assessee to the file of Ld. CIT(A) with direction to re-decide the appeal of the assessee

3 SA No.-578/Del/2018 Sh. Guru Singh Sabha. on merits strictly as per law giving reasons for decision in the appellate order. The Ld. CIT(A) shall give reasonable and sufficient opportunity of being heard to the assessee as well as AO. Considering the facts of the case, we direct the assessee to co-operate with the Ld. CIT(A), otherwise, he may proceed against the assessee as per law.

In the result, the appeal of the assessee is allowed for statistical purpose. The stay application stands infructuous and dismissed.

Order pronounced in the open court on 31/8/2018

SHRI GURU SINGH SABHA,NEW DELHI vs. ITO, TRUST WARD- 2, NEW DELHI

What did the Tribunal hold?

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