CIT(A) Cannot Dismiss Appeal for Non-Prosecution Without Deciding Merits: ITAT Pune

Nimblelogik Pvt. Ltd. Vs ACIT (ITAT Pune)

In a notable relief secured by Adv. Sachin P. Kumar, the Hon’ble Income Tax Appellate Tribunal, Pune Bench “A”, passed a significant order in ITA No. 2263/PUN/2025 for A.Y. 2022-23, reiterating the statutory obligation of the CIT(A) to decide appeals on merits and not dismiss them merely for non-prosecution.

The assessee company, engaged in the business of transportation and logistics services, had filed its return declaring nil income. During scrutiny assessment under Section 143(3), the Assessing Officer made additions aggregating to Rs.1.50 crore on account of alleged unexplained share premium under Section 68, trade payables, loans/advances, and ad-hoc disallowance of expenses.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A)/NFAC. However, due to repeated adjournments sought while preparing detailed submissions, the Ld. CIT(A)/NFAC proceeded to dismiss the appeal ex parte for want of prosecution, without adjudicating the issues on merits.

Before the Tribunal, Adv. Sachin P. Kumar strongly contended that the dismissal of appeal solely for non-prosecution was contrary to the mandate of Section 250(6) of the Income Tax Act, 1961. It was argued that the appellate authority is legally bound to pass a speaking order stating points for determination, decisions thereon, and reasons for such decisions, even in cases where the assessee fails to appear.

It was further submitted that sufficient material, including statement of facts and grounds of appeal, was already available on record and the assessee was ready to furnish all requisite documentary evidences if one final opportunity was granted.

After examining the record and rival submissions, the Hon’ble Tribunal observed that the Ld. CIT(A)/NFAC had not adjudicated the appeal on merits and had merely dismissed the same for want of prosecution, which was not in consonance with the provisions of Section 250(6) of the Act. The Bench emphasized that the appellate authority is duty-bound to pass a reasoned and speaking order after considering the facts and material available on record.

Outcome / Final Judgment:

The Hon’ble ITAT Pune, comprising Shri R.K. Panda (Vice President) and Ms. Astha Chandra (Judicial Member), set aside the ex parte order passed by the Ld. CIT(A)/NFAC and restored the matter back to the file of the appellate authority for fresh adjudication.

The Tribunal directed the CIT(A)/NFAC to grant one final opportunity to the assessee to furnish the requisite details and thereafter decide the issues afresh in accordance with law by passing a reasoned speaking order.

At the same time, the Tribunal also directed the assessee to cooperate in the appellate proceedings and not seek unnecessary adjournments, failing which the CIT(A)/NFAC would be free to pass appropriate orders as per law.

Accordingly, the appeal of the assessee was allowed for statistical purposes, reaffirming that justice cannot be denied merely on account of procedural lapses and that appellate authorities must discharge their statutory obligations in a fair and judicious manner.

FULL TEXT OF THE ORDER OF ITAT PUNE

This appeal filed by the assessee is directed against the order dated 28.07.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2022-23.

2. Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.1,50,50,674/- made by the Assessing Officer.

3. Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of transportation and logistics services under the name and style of “Nimblelogik Pvt. Ltd.” It filed its return of income on 05.11.2022 declaring Nil income. The case of the assessee was selected for scrutiny and accordingly notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued. Subsequently the Assessing Officer issued notice u/s 142(1) of the Act along with a questionnaire. The assessee in response to the same filed the requisite details. The Assessing Officer completed the assessment u/s 143(3) of the Act on 15.03.2024 determining the total income of the assessee at Rs.1,50,50,674/- wherein he made the following additions:

4. Since the assessee was filing adjournment after adjournment and did not avail of the opportunities granted by the Ld. CIT(A) / NFAC, he dismissed the appeal filed by the assessee by observing as under:

5. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

6. The Ld. Counsel for the assessee submitted that the assessee sought adjournment on 08.07.2025 based on which the Ld. CIT(A) / NFAC had granted adjournment to 16.07.2025. However, when the assessee filed an adjournment on 16.07.2025 stating that it is preparing detailed written submission, the Ld. CIT(A) / NFAC without giving any further opportunity, passed the order on 28.07.2025. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details. Further, the Ld. CIT(A) / NFAC has not decided the appeal on merit although some details were available before him as per statement of facts and grounds of appeal. However, he has simply dismissed the appeal for want of prosecution which is not as per the provisions of section 250(6) of the Act.

7. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We find the Assessing Officer in the instant case determined the total income of the assessee at Rs. 1,50,50,674/- as against the nil return of income by making certain additions / disallowances. We find the Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details. It is also his submission that the Ld. CIT(A) / NFAC has not decided the issue on merit and dismissed the same for want of prosecution.

9. A perusal of the order of the Ld. CIT(A) / NFAC shows that the Ld. CIT(A)/ NFAC has not decided the appeal on merit but has simply dismissed the same for want of prosecution. We find the provisions of section 250(6) of the Act which read as under:

“250(1).
…

(6) The order of the [Joint Commissioner (Appeals) or the] Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.”

10. Since it is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case by filing the requisite details, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law by passing a speaking order. The assessee is also hereby directed to submit the requisite details before the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

11. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 12^th December, 2025.