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Facts
The assessee's appeal before the CIT(A)-NFAC was dismissed for non-compliance without deciding on merits. The CIT(A)-NFAC cited total non-compliance and difficulty in adjudication due to lack of adequate submissions and clarifications. The assessee requested another opportunity.
Held
The Tribunal held that an appellate authority must decide an appeal on merits, not dismiss it for default, unless the statute expressly permits it. Relying on the case of Southern Steel Industries vs. AAC (CT), the order of CIT(A)-NFAC was set aside.
Key Issues
Whether the CIT(A)-NFAC was justified in dismissing the appeal for default without deciding on merits, and whether the assessee should be granted another opportunity.
Sections Cited
271(1)(c), 250
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI S.R. RAGHUNATHA
सुनवाई क� तार�ख/Date of Hearing : 21.08.2024 घोषणा क� तार�ख/Date of Pronouncement : 21.08.2024 आदेश /O R D E R PER BENCH: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi in Order No.ITBA/NFAC/S/250/2024-25/ 1064371136(1) dated 25.04.2024. The impugned penalty u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter the ‘Act’) was levied by the Assessing Officer, Assessment Unit, Income Tax
At the outset, the ld.counsel for the assessee stated that the CIT(A)-NFAC has dismissed the assessee’s appeal for default simpliciter and has not decided the appeal on merits. The ld.counsel for the assessee took us through the findings of CIT(A)- NFAC and read out the entire findings and stated that there is no iota on merits discussed by CIT(A)-NFAC, whereas he has discussed that how the appeal can be dismissed for default. The ld.counsel for the assessee particularly drew our attention to the last para of the CIT(A)-NFAC, which reads as under:- “In view of the appellant’s total non-compliance during appeal proceedings, I find it extremely difficult to adjudicate on the appeal for want of adequate submission and clarification, counter-clarification.
In the result, the appeal is dismissed.”
In view of the above, the ld.counsel requested for one more opportunity.
On the other hand, the ld.CIT-DR stated that the CIT(A)- NFAC has fixed this appeal for three or four times but no response is received from assessee. Hence, the CIT(A)-NFAC was
After hearing rival contentions and going through the facts of the case and particularly, the order of CIT(A)-NFAC, we noted that the CIT(A)-NFAC has simpliciter dismissed the appeal for default and not adjudicated or decided merits of the case. After going through the provisions of the Act particularly provision of section 250 of the Act, we are of the view 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. For this, we rely 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). In term of the above, the order of CIT(A)-NFAC 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.
In the result, the appeal filed by the assessee is allowed for statistical purposes.