VELAPPA ROWTHER ABDUL AZEEZ MOHAMED RAJA,ERODE vs. ACIT, CIRCLE-1,, ERODE

At the outset, the ld.counsel for the assessee pointed out from the order of CIT(A)-NFAC that the order is passed for default on the part of the assessee and dismissed the appeal without adjudicating on merits. The ld.counsel took us through the order of CIT(A)- NFAC’s finding at para 4 and stated that the CIT(A) has relied on the Tribunal’s decision in the case of M/s. Chhabra Land & Housing Ltd., in and the decision of Hon’ble Supreme Court in the case of B.N. Bhattacharjee & other reported in 118 ITR 461 (SC). Hence, according to him, the CIT(A)-NFAC merely can’t dismiss the appeal for default on the part of assessee but appeal has to be decided on merits. He relied on the decision of Hon’ble High Court of Madras in the case of Southern Steel Industries vs. AAC (CT), [1996] 101 STC 273 (Mad), wherein the Hon’ble Madras High Court held that unless the statute authorizes the quasi judicial authority to dismiss the appeal for default expressly or by inevitable implication, but the appellate authority has to decide the appeal on merits and not dismiss it for default. Admittedly, the Income Tax Appellate Tribunal Rules, 1963, Rule 24, hearing of appeal ex-parte for default by the appellant, matter can be heard but it has to be disposed of on merits. When this was confronted to ld.CIT-DR, he only insisted that CIT(A) has allowed many opportunities.

After hearing rival contentions and going through the fact that the appeal is dismissed for default on the part of appellant but appeal is not decided on merits. There is no iota of word on merits in this appellate order. Hence, we have left with no alternative except to set aside the order of CIT(A) and remand the matter back to his file for fresh adjudication. Hence, the order of CIT(A) 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.