Bhulakshmi Srinivasarao Tulasi Vs ITO (ITAT Pune)
No Reply Does Not Mean No Merit: CIT(A) Must Decide the Appeal
The Issue
An assessee’s failure to respond to appellate notices may justify proceeding in her absence. But does it justify concluding that her claims have no strength and dismissing the appeal without examining the grounds?
The Pune Tribunal held that the CIT(A) cannot dismiss an appeal for non-prosecution without adjudicating its merits. The statutory requirement under section 250(6) continues to apply even when the assessee does not file submissions, furnish evidence or seek an adjournment.
The decision highlights a fundamental distinction: non-compliance with hearing notices is a procedural fact; lack of merit requires a reasoned finding.
The Background
The assessee challenged an assessment order dated 30 March 2025, passed under section 147 read with section 144, for Assessment Year 2020-21.
The appeal was disposed of by the CIT(A), NFAC, through an order dated 24 October 2025. During the appellate proceedings, notices were issued on 17 September 2025, 24 September 2025 and 3 October 2025, requiring the assessee to furnish submissions and evidence supporting the grounds of appeal.
The assessee did not respond to any of these notices. Nor was any request for adjournment filed.
The CIT(A) consequently concluded that the assessee was not interested in pursuing the appeal and that the claims made had no strength. On that basis, the assessment order was upheld and all the grounds were dismissed.
However, the appellate order contained no adjudication of the grounds on their merits.
Non-Participation Before the Tribunal Too
The assessee remained unrepresented before the Tribunal as well. Nevertheless, the Tribunal heard the Departmental Representative and examined the records.
This aspect is significant. The Tribunal did not treat the assessee’s continued absence as sufficient reason to sustain the appellate dismissal. Instead, it examined whether the CIT(A)’s order fulfilled the statutory requirements governing disposal of an appeal.
It found that the grounds had not been adjudicated, although such adjudication was mandatory under section 250(6). The defect therefore lay in the manner in which the appeal had been decided, irrespective of the assessee’s failure to participate.
Section 250(6): A Decision Must Have Reasons
The Tribunal emphasised the obligation to pass a reasoned appellate order.
Under section 250(6), the order must state the points for determination, the decision thereon and the reasons for the decision. Merely recording that opportunities were provided and ignored does not answer the issues raised against the assessment.
Likewise, a general statement that the assessee’s claims lack strength cannot substitute for an examination of the grounds and the material available on record.
An appeal may ultimately fail because the assessee has not substantiated a claim. But the appellate authority must explain which claim fails, what material was considered and why the assessment deserves confirmation. The outcome must emerge from adjudication, rather than from an inference drawn solely from silence.
Bombay High Court’s Principle Applied
The Tribunal relied on Pr. CIT (Central) v. Premkumar Arjundas Luthra (HUF), [2017] 297 CTR 614 (Bom.).
In the passage reproduced in the order, the Bombay High Court explained that the statutory scheme imposes an obligation upon the CIT(A) to dispose of an appeal on merits.
Under section 250(4), the appellate authority may make further inquiry as considered necessary or direct the Assessing Officer to undertake inquiry and report the result. Section 250(6) requires a written decision supported by reasons.
The High Court also referred to the powers under section 251 to confirm, reduce, enhance or annul an assessment, and to consider issues arising from the proceedings even where the appellant has not specifically raised them.
These extensive powers carry a corresponding responsibility to apply the mind to the issues arising from the assessment. The statutory scheme does not permit dismissal merely for non-prosecution.
Applying this principle, the Tribunal held that the CIT(A) was required to decide the assessee’s appeal on merits.
The Decision
The Tribunal set aside the CIT(A)’s order and restored the matter to the CIT(A) for de novo adjudication, directing that the assessee be provided an opportunity of hearing.
The appeal was allowed for statistical purposes.
The Tribunal did not delete any addition, annul the reassessment or accept the assessee’s substantive claims. Those issues remained open for consideration in the fresh appellate proceedings.
Author’s Comments
The weakness in the appellate order was the leap from “no submissions were filed” to “the claims have no strength.” The first records the assessee’s conduct; the second requires examination and reasons.
Taxpayers must certainly respond to notices and produce supporting material. Their failure may lead to an adverse decision on the available record. Nevertheless, an adverse decision on merits and a dismissal for non-prosecution are legally distinct.
For practitioners, the decision reinforces the importance of examining whether an appellate order actually addresses the grounds. A recital of hearing opportunities, followed by blanket confirmation of the assessment, does not fulfil the duty to adjudicate.
The assessee may remain absent; the reasons cannot.
Cases Discussed
- Pr. CIT (Central) Vs Premkumar Arjundas Luthra (HUF), [2017] 297 CTR 614 (Bombay High Court) — directly followed for the proposition that once an appeal is preferred, the CIT(A) is obliged to dispose of it on merits; sections 250 and 251 do not empower the CIT(A) to dismiss an appeal merely for non-prosecution.
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 2020-21 on 24.10.2025, emanating from the Assessment Order u/s 147 r.w.s. 144 of the Act, dated 30.03.2025.
Findings and Analysis:
2. None appeared on behalf of the assessee. We have heard Ld. DR and perused the records.
2.1 During the appellate proceedings, the Ld. CIT(A) issued notices for hearing to the assessee on 17.09.2025, 24.09.2025 and 03.10.2025 for furnishing submissions and evidences in support of grounds of appeal. However, the assessee neither filed submission nor filed for adjournment against any of the notices. 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 :
“9. The appellant has been provided sufficient opportunities but appellant failed to submit any submission or evidence in appeal proceedings in support of grounds of appeal as well as statement of facts and remained non-compliant. In view of the above facts, it is held that appellant is not interested in pursuing the appeal and the claims made by the appellant do not have any strength. Therefore, on the facts of the case, I am constrained to uphold the order of the AO and accordingly all the grounds raised in the appeal are dismissed.
10. In result, the appeal is dismissed.”
2.2 The Ld. CIT(A) has dismissed the appeal without adjudicating the grounds of appeal which is mandatory u/s 250(6) of the Act.
3. 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.
3.1 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.
4. 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.
5. In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 30th September, 2026
