Urun Vividh Karyakari Vikas Society Ltd. Vs ITO (ITAT Pune)
Assessee Silent, CIT(A) Still Must Decide: Appeal Cannot Be Dismissed for Non-Prosecution
Repeated failure to respond to appellate notices does not empower the CIT(A) to dismiss an appeal merely for non-prosecution. In Urun Vividh Karyakari Vikas Society Ltd. v. ITO, the Pune ITAT reiterated that Section 250(6) requires adjudication on merits through a reasoned order. Following the binding Bombay High Court decision in Pr. CIT (Central) v. Premkumar Arjundas Luthra (HUF) [2017] 297 CTR 614 (Bombay), the Tribunal set aside the dismissal and restored the appeal to the CIT(A) for fresh adjudication.
Background: Assessment Followed by an Unanswered Appeal
The assessee, Urun Vividh Karyakari Vikas Society Ltd., challenged an assessment for Assessment Year 2019-20, passed under Section 147 read with Section 144 on 2 January 2024.
During the first appellate proceedings, the CIT(A), NFAC, issued notices on 18 March 2024, 28 March 2024, 26 April 2024, 24 May 2024, 27 September 2024 and 28 March 2025.
According to the appellate order, the assessee neither filed submissions or supporting documents nor requested an adjournment. The CIT(A) noted that, in the faceless appeal system, notices were communicated electronically and responses were expected through the appeal module on the income-tax portal.
From this continued non-compliance, the CIT(A) inferred that the assessee was not interested in pursuing the appeal. Consequently, all grounds were dismissed for non-prosecution, without examining their merits.
Delay Before ITAT: Substantial Justice Given Priority
The appeal before the Tribunal was itself delayed by 183 days. The assessee filed an affidavit explaining the reasons.
After examining the affidavit, the Tribunal was satisfied that sufficient cause existed and condoned the delay. It emphasised that substantial justice was more important than procedural delay and observed that an assessee ordinarily gains nothing by filing an appeal belatedly.
Significantly, none appeared for the assessee even before the Tribunal. Nevertheless, the Bench heard the Departmental Representative, examined the record and decided the legal issue concerning the validity of the CIT(A)’s dismissal.
The condonation finding was based on the explanation furnished in this case. The order does not suggest that delay must invariably be condoned without sufficient cause.
CIT(A)’s Reasoning: Filing an Appeal Is Not Enough
The CIT(A) relied on decisions including CIT v. B.N. Bhattacharjee, Estate of Late Tukojirao Holkar v. CWT and CIT v. Multiplan India (P.) Ltd.
The appellate authority’s reasoning was that filing an appeal must be followed by effective prosecution. Repeated silence, despite several opportunities, was treated as evidence that the assessee had nothing further to offer in support of its grounds.
However, the Tribunal identified the fundamental defect: the appeal had been dismissed without adjudicating the grounds, although such adjudication was mandatory under Section 250(6).
The question was therefore not simply whether opportunities had been granted. It was whether the appellate authority had discharged its statutory duty while disposing of the appeal.
Section 250(6): A Decision Must Contain Reasons
The Tribunal relied on Pr. CIT (Central) v. Premkumar Arjundas Luthra (HUF) [2017] 297 CTR 614 (Bombay).
The Bombay High Court explained that Section 250(6) obliges the CIT(A) to dispose of an appeal in writing by identifying the points for determination, recording the decision on those points, and stating the reasons supporting the decision.
The High Court also referred to Section 250(4), under which the CIT(A) may conduct further inquiry or direct the Assessing Officer to do so.
These provisions require the appellate authority to apply its mind to the dispute. An inference that the appellant has lost interest cannot substitute for findings on the issues arising from the assessment.
Wide Appellate Powers Carry a Duty to Adjudicate
The High Court’s reasoning also drew upon Section 251, which confers powers to confirm, reduce, enhance or annul an assessment.
The CIT(A)’s powers are coterminous with those of the Assessing Officer. The appellate authority may examine issues arising from the proceedings even where the appellant has not specifically raised them.
Against this statutory framework, the Bombay High Court held that the CIT(A) has no power to dismiss an appeal merely for non-prosecution.
Following that binding ruling, the Pune Tribunal held that the first appellate authority had to decide the society’s appeal on merits.
Relief Granted: Fresh Hearing, No Decision on Additions
The Tribunal set aside the CIT(A)’s order and restored the matter to that authority for de novo adjudication, with an opportunity of hearing to the assessee.
The appeal was therefore allowed for statistical purposes. This is an important distinction: the Tribunal did not delete the assessment additions or decide the underlying tax dispute. It corrected the defective appellate disposal and required a fresh decision.
Author’s Comments
Giving several opportunities and passing a legally valid appellate order are separate requirements. The assessee’s failure to respond may leave its factual claims unsupported, but the CIT(A) must still examine the available record and give reasons for accepting or rejecting the grounds.
This ruling does not excuse non-compliance or guarantee relief on merits. It ensures that the outcome follows reasoned adjudication rather than dismissal for absence alone.
For practitioners, the decision provides direct support against NFAC orders which simply record unanswered notices and dismiss every ground for non-prosecution. Once restored, however, the appellant should use the fresh opportunity to furnish submissions and evidence addressing the actual assessment issues.
Case: Urun Vividh Karyakari Vikas Society Ltd. v. ITO, Ward-5, Sangli, ITA No.472/PUN/2026, AY 2019-20, Pune ITAT, order dated 30 September 2026.
Cases Discussed
- Pr. CIT (Central) Vs. Premkumar Arjundas Luthra (HUF) [2017] 297 CTR 614 (Bombay) — Directly followed by the Tribunal. The Bombay High Court held that Sections 250 and 251 require the CIT(A) to decide an appeal on merits and that the CIT(A) has no power to dismiss an appeal merely for non-prosecution.
- CIT Vs. B.N. Bhattacharjee and Another, 118 ITR 461 (SC) — Relied upon by the CIT(A) for the proposition that an appeal involves not merely filing the appeal but effectively pursuing it.
- Estate of Late Tukojirao Holkar Vs. CWT, 223 ITR 480 (Madhya Pradesh) — Relied upon by the CIT(A) in support of its approach to non-prosecution.
- CIT Vs. Multiplan India (P.) Ltd., 38 ITD 320 (Delhi-Trib.) — Relied upon by the CIT(A). The decision concerning non-prosecution is also discussed in TaxGuru material dealing with dismissal/non-admission of appeals where the appellant failed to appear.
FULL TEXT OF THE ORDER OF ITAT PUNE
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2019-20 on 22.05.2025, emanating from the Assessment Order u/s 147 r.w.s. 144 of the Act, dated 02.01.2024.
2. There was a delay of 183 days in filing of the appeal before this Tribunal. The assessee filed an affidavit explaining the reasons for delay. We have perused the affidavit and convinced that there was sufficient cause for delay. Substantial justice is more important than procedural delay. No assessee is going to gain by filing the appeal belatedly. Accordingly, delay condoned.
Findings and Analysis:
3. None appeared on behalf of the assessee. We have heard Ld. DR and perused the records.
3.1 The Ld. CIT(A) has observed that the assessee failed to file reply to the notices dated 18.03.2024, 28.03.2024, 26.04.2024, 24.05.2024, 27.09.2024 and 28.03.2025. Accordingly, the Ld. CIT(A) dismissed the appeal of the assessee for non-compliance without discussing the merits of the case. The relevant paragraphs of the order of the Ld. CIT(A) is reproduced here as under :
“3. Observations, Finding and Decision:
3.1 I have perused the assessment order and other relevant records. The assessment order was passed under section 147 r. w. s. 144 of the Income-tax Act, 1961, against which the appellant preferred an appeal before the undersigned.
3.2 During the appellate proceedings, the appellant was granted many opportunities for presenting his case and filing detailed submission in support of various grounds of appeal taken by him. However, on none of the occasions, the appellant chose to file a submission or filed any documents, evidences or even requested for adjournment. It may be noted that in the faceless appeal environment, all the notices are issued to the appellant at the email address provided by him, and also, all the submission are supposed to be filed online through the appeal module available to the appellant online in his e-filing portal. In this electronic communication environment, the emails/notices/letters are routed through the NFAC, and the appellant is expected to respond through the same environment.
3.3 Having noted thus, it is a fact that the appellant chose not to submit anything in response to various notices issued to him thereby giving him ample opportunity of hearing, which is also in accordance to principle of natural justice. The table below list the various dates of issuing of notices, dates of hearing/submission granted to the appellant and the response of the appellant:
3.4 It is very clear from the above table that the appellant has chosen not to submit anything in support of his various grounds of appeal. I am of the considered opinion that the appellant does not have anything to say or have anything to offer to the appellate authority in support of his various grounds of appeal. It further means that the assessee is not interested in prosecuting this appeal. Hence the appeal filed by the assessee is liable to be dismissed for non-prosecution. For this view I find support from the following decisions: –
(a) The Hon’ble SC In the case of CIT vs B.N. Bhattacharjee and Another, reported in 118 ITR 461 [relevant pages 477 & 478] their Lordships have held that:
“The appeal does not mean merely filing of the appeal but effectively pursuing it.”
(b) In the case of Estate of late Tukojirao Holkar vs CWT; 223 ITR 480(M.P.) the Hon’ble High court while dismissing the reference made at the instance of the assessee in default made following observation in their order:
“If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference.”
(c) In the case of Commissioner of Income-tax vs Multiplan India (P) Ltd.; 38 ITD 320(Del), the appeal filed by the revenue before the Tribunal, which was fixed for hearing, but on the date of hearing nobody represented the revenue/appellant nor any communication for adjournment was received. There was no communication or information as to why the revenue chose to remain absent on that date. The Tribunal on the basis of inherent powers, treated the appeal filed by the revenue as un admitted in view of the provisions of Rule 19 of the Appellate Tribunal Rules, 1963.
(d) Further, the law assists those who are vigilant and not those who sleep over their rights; i.e. “vigilantibus non dormientibus, jura subveniunt”.
3.5 I, therefore, dismiss all the grounds of appeal filed by the assessee.”
3.2 The Ld. CIT(A) has dismissed the appeal without adjudicating the grounds of appeal which is mandatory u/s 250(6) of the Act.
4. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) (Bombay) / [2017] 297 CTR 614 (Bombay) asunder :
Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act.
Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn.
Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” Unquote.
4.1 Thus, the Hon’ble Bombay High Court has categorically held that Ld. CIT(A) has to decide the appeal on merit and Ld. CIT(A) does not have any power to dismiss appeal for non-prosecution.
5. In view of the above, the order of the Ld. CIT(A) is set-aside to Ld. CIT(A) for de-novo adjudication. The Ld. CIT(A) shall provide opportunity of hearing to the assessee.
6. In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 30th September, 2026
