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Facts
The assessee appealed against a penalty under Section 271(1)(c) for AY 2010-11. The Ld. CIT(A) dismissed this appeal for non-prosecution, citing repeated non-compliance and failure to file submissions despite several notices issued to the assessee.
Held
The Tribunal noted the assessee's claim of having filed submissions (Paper Book pages 14-16) and emphasized that the CIT(A) is obligated under Section 250 to decide appeals on merit. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the case for fresh adjudication on merits, with a directive for the assessee to comply with future notices.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without a decision on merits, despite the assessee claiming to have filed submissions.
Sections Cited
Section 271(1)(c) of the Income-tax Act, 1961, Section 250 of the Income-tax Act, 1961
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the assessee is directed against order dated 21.08.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2010-11 in relation to penalty u/s 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’).
Savatex Pvt. Ltd., 2 ITA No. 5319/MUM/2024
We have heard rival submission of the parties and perused the relevant material on record. We find that the Ld. CIT(A) has dismissed the appeal of the assessee for default on the part of the assessee in appearing/filling submissions before him. The relevant finding of the Ld. CIT(A) is reproduced as under:
“Findings and Decision 4. The appeal was taken up and notice dated 24.12.2020, 07.07.2023, 06.07.2023, 12.07.2024 and 05.08.2024 were issued to the appellant fixing hearing on 31.12.2020, 14.07.2023, 22.07.2024 and 12.08.2024 respectively. However, the appellant neither responded on that date nor any adjournment was sought. No written submission was also filed. In view of repeated ignorance of the notices, it was clear that the appellant was not interested in pursuing appeal. 4.1 By repeated non compliance and not filing any written submission, the appellant has shown that he is not interested in pursuing the appeal. In view of these facts, I have no alternative but to dismiss the appeal of the appellant for non-prosecution as it cannot be kept pending adjudication for indefinite period. It is the duty of the appellant to make necessary arrangements for effective representation on the appointed date. Mere filing of an appeal is not enough, rather it requires effective prosecution also. Therefore, the appeal is found liable for dismissal. This view is supported by the following judicial pronouncements:- (i) CIT vs Multiplan India Ltd. 38 ITD 320(Del) (ii) Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (M.P.) (iii) New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P&H) (iv) CIT vs. B. N. Bhatachargee And Another 118 ITR 461 (SC). 4.2 The Hon'ble ITAT, Jabalpur Bench, Jabalpur in the case of M/s Bindra Warehousing Corporation, Itarsi vs ITO, and in Jabalpur Sahkari Dugh Sangh vs ITO, to 203/Jab/2015 has found assessee as not interested in pursuing appeal on the basis of just one non-attendance before the Hon'ble Tribunal. The Tribunal has dismissed appeals for non prosecution. The Tribunal has held as follows:-
Savatex Pvt. Ltd., 3 ITA No. 5319/MUM/2024
"At the time of hearing, none appeared on behalf of the assessee. The notice o hearing was sent to the assessee through RPAD, but there was no compliance on behalf of the assessee. Even no application seeking adjournment was filed. The laws aid those who are vigilant, not those who sleep upon their rights. This principle is embodied in well known dictum "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUN". Under these circumstances, in our considered opinion assessee is not interest in prosecuting the appeal. As such we hold that this appeal is liable to be dismissed for non prosecution." 4.3 Respectfully, following the view taken in the cases cited at para-4.1 above and the decision of Hon'ble ITAT, Jabalpur Bench, Jabalpur in the cases cited (supra), the appeal filed by the appellant is liable for dismissal for non-prosecution.” 2.1 Before us, the Ld. counsel for the assessee has filed a Paper Book containing pages 1 to 16. The Ld. counsel submitted that assessee had duly complied the queries raised by the Ld. CIT(A). He referred to Paper Book page 14 to 16 which is copy of the acknowledgement of the submissions filed by the Ld. CIT(A).
2.2 Since the Ld. CIT(A) has dismissed the appeal for default on the part of the assessee without deciding the issue in dispute on merit under the provisions of section 250 of the Act. The Ld. CIT(A) is required to decide the issue in dispute on merit even in absence of any submission on the part of the assessee, whereas in the case , the assessee has claimed to have filed the submissions. Therefore, we feel it appropriate to set aside the order of the Ld. CIT(A) and remit the matter back to him for deciding afresh after taking into consideration submission of the assessee. The assessee is also directed to comply various notices which may be issued by the Ld.
Savatex Pvt. Ltd., 4 CIT(A). Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 22/11/2024.