Sharda Devi Singh Vs ITO (ITAT Raipur)
Appeal Cannot Be Dismissed for Non-Prosecution: CIT(A) Must Decide on Merits
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) held that the CIT(A) has no power to dismiss an appeal merely for non-prosecution and is statutorily bound to adjudicate the appeal on merits by passing a reasoned order, even if the assessee fails to appear.
In this case, the assessee’s appeal against an ex-parte reassessment order (treating cash deposits of about ₹77 lakh as unexplained under section 69) was dismissed by the CIT(A) solely due to non-compliance and non-appearance, without examining the validity of reopening or the addition on merits. The Tribunal noted that such an approach is contrary to section 250(6) of the Act, which mandates disposal of appeals in writing with reasons on each point of determination.
The ITAT emphasized that, read with sections 250(4), 250(5), 251(1)(a)/(b) and the Explanation to section 251(2), the appellate authority must apply its mind to all issues arising from the assessment, whether or not the assessee prosecutes the appeal. Dismissal for non-prosecution is impermissible under the scheme of the Act.
Considering that both the assessment and the first appeal were decided ex-parte, the Tribunal, without expressing any view on merits, set aside the CIT(A)’s order and remanded the matter back to the CIT(A) for fresh, de-novo adjudication on merits, after granting adequate opportunity of hearing. The appeal was allowed for statistical purposes, with a caution to the assessee to ensure proper compliance.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
