Jayan Vatahakkattu Moni Vs CIT (Appeals) (Kerala High Court)
An Income-tax Appeal May Be Heard Ex Parte, But Cannot Be Dismissed for Non-Appearance: Kerala HC Quashes Cryptic CIT(A) Order
Summary: The Kerala High Court has held that the CIT(A) cannot dismiss an income-tax appeal solely because the assessee failed to appear for the appellate hearing. Even where the appellant remains absent despite repeated notices, Section 250(6) requires the appellate authority to identify the points for determination, adjudicate the grounds raised and record reasons for its conclusions.
Since the impugned appellate order did not examine any of the grounds raised by the assessee and dismissed the appeal merely for non-appearance, the High Court quashed the order and directed fresh disposal after granting a reasonable opportunity of hearing.
Appeal Dismissed After Four Hearing Notices
The assessee challenged an assessment order dated 17.12.2024 by filing Form 35 before the first appellate authority on 09.01.2025.
During the appellate proceedings, the CIT(A) issued hearing notices on four occasions. The assessee did not appear or otherwise effectively participate in the proceedings. On that basis, the CIT(A) passed an order u/s 250 dated 26.03.2026 dismissing the appeal.
Instead of approaching the ITAT through the ordinary statutory appellate remedy, the assessee invoked the writ jurisdiction of the Kerala High Court. The principal contention was that the appellate authority had rejected the appeal without referring to or deciding any of the grounds raised in Form 35.
The assessee argued that the order violated the mandatory requirements prescribed u/s 250 and could not be regarded as a valid appellate adjudication.
The Department opposed the petition by contending that the assessee had not furnished documents to substantiate the grounds of appeal and that no interference with the appellate order was therefore warranted.
Non-Appearance Does Not Extinguish Statutory Appeal
The High Court examined the impugned order and found that the appeal had been dismissed solely because the assessee failed to appear despite four notices.
The Court accepted that the assessee had remained absent. However, it held that such absence did not confer power upon the CIT(A) to dismiss the statutory appeal without examining its merits.
Section 250(6) provides that an order disposing of an appeal must be in writing and must state the points for determination, the decision on those points and the reasons supporting the decision.
These are not optional requirements dependent upon the appellant’s participation. They constitute the statutory content of a valid appellate order.
Therefore, even if the assessee does not appear, the CIT(A) must examine the assessment order, grounds of appeal, statement of facts and whatever material is available on record. The authority may proceed ex parte and decide the matter against the assessee where the evidence does not support the claim, but it cannot treat non-appearance itself as sufficient reason to dismiss the appeal.
Appellate Authority Must Decide Grounds on Merits
The Court emphasised that the obligation to adjudicate continues irrespective of whether the appellant appears before the appellate authority.
The CIT(A) performs a quasi-judicial function and is required to apply his mind independently to the controversy arising from the assessment. An appellate proceeding is not merely a hearing opportunity which disappears when the appellant remains absent. It is a statutory adjudicatory process requiring a reasoned determination.
In the present case, the appellate order did not formulate any point for determination, discuss any ground raised by the assessee or provide findings on the merits of the assessment. The entire dismissal rested upon the assessee’s failure to attend the hearings.
The High Court consequently held that the order was not in conformity with the statutory requirements of Section 250.
Order Quashed & Appeal Restored
The High Court quashed the appellate order dated 26.03.2026 and restored the appeal to the CIT(A).
The first appellate authority was directed to reconsider the appeal and pass a fresh order after providing the assessee a reasonable opportunity of being heard.
The Court did not express any view on the merits of the assessment or the grounds raised in Form 35. All substantive questions were left open for fresh adjudication by the appellate authority.
Author’s Comments
The judgment reiterates a settled but frequently overlooked distinction between proceeding ex parte and dismissing for default.
Where an assessee repeatedly fails to respond, the CIT(A) is not required to keep the proceeding pending indefinitely. He may proceed ex parte on the basis of the assessment record and the material accompanying Form 35. But the resulting order must still satisfy Section 250(6). It must record what the dispute was, what material was considered, what conclusions were reached & why.
Unlike a private dispute that may sometimes be dismissed for non-prosecution, an income-tax appeal concerns the correct determination of statutory tax liability. The CIT(A) also possesses wide powers, broadly co-terminus with those of the AO, and is expected to examine whether the assessment is legally and factually sustainable.
A standard paragraph listing hearing notices, followed by dismissal for non-compliance, does not amount to disposal of an appeal on merits. Such an order merely records procedural default; it does not perform the appellate function assigned by the Act.
At the same time, this ruling should not encourage non-compliance. On remand, the assessee must promptly furnish submissions and supporting evidence. Continued absence may result in an adverse order on merits based upon the available record—but not a mechanical dismissal for want of prosecution.
The principle is clear: the CIT(A) may decide an appeal against an absent assessee, but cannot avoid deciding it. Non-appearance permits ex parte adjudication; it does not permit non-adjudication.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is an assessee under the provisions of the Income Tax Act, 1961. The challenge raised in this writ petition is against Ext.P3 order passed by the first appellate authority, by which, the appeal submitted by the petitioner against Ext.P1 order of assessment was rejected. The challenge is raised by the petitioner by way of this writ petition, instead of invoking statutory remedy, is on the ground that, the assessing authority rejected the appeal without referring to any of the grounds raised in the appeal. The rejection was solely on the ground that, the petitioner failed to appear before the appellate authority for hearing.
2. I have heard the learned Counsel for the petitioner and the learned Standing Counsel for the respondents.
3. The specific contention raised by the learned Counsel for the petitioner is that, Ext.P3 order passed by the first appellate authority is not in consonance with the statutory requirements contemplated under Section 250 of the Income Tax Act. The learned Standing Counsel appearing for the respondents opposed the said contention by pointing out that, the petitioner did not produce any documents to substantiate the grounds raised in the appeal and therefore, no interference is warranted in Ext.P3.
4. After carefully going through the records and considering the contentions raised from both sides, I find merits in the submission made by the learned counsel for the petitioner. On going through Ext.P3 order, it is seen that, the dismissal was solely on the ground that the petitioner failed to appear for hearing despite issuance of notices on four occasions. However, as rightly contended by the learned counsel for the petitioner, even in the absence of appearance of the appellant in the appellate proceedings, the appellate authority is not empowered to dismiss the appeal on that sole ground and this is because, as per Subsection (6) of Section 250 of the Income Tax Act, the appellate authority is bound to frame points of determination and to answer the same, by providing reasons for the same. Thus, it is obligatory for the appellate authority to pass an order by referring to the grounds raised in the appeal, irrespective of the question whether, the appellant appears before the appellate authority or not. In this case, going through Ext.P3 it is seen that, such an exercise has not been done and therefore, the appellate order cannot be treated as an order, passed in tune with the statutory requirements contemplated under Section 250. Therefore, an interference is required.
Accordingly, this writ petition is disposed of quashing Ext.P3 with a direction to the 1st respondent to reconsider Ext.P2 appeal and pass fresh orders after giving the petitioner a reasonable opportunity for being heard.
