Satanarayan Ispat Private Limited Vs ITO (ITAT Kolkata)
CIT(A) Cannot Dismiss Appeal Merely for Non-Compliance; All Grounds Must Be Decided on Merits: ITAT Kolkata
Summary: The Kolkata Bench of the Income Tax Appellate Tribunal has held that even where an assessee fails to participate properly in the first appellate proceedings, the CIT(A) cannot dismiss the appeal without deciding all the grounds raised by the assessee on merits.
The assessee, Satanarayan Ispat Private Limited, was subjected to reassessment proceedings for Assessment Year 2019-20. The assessment was completed under section 147 read with section 144B of the Income-tax Act, 1961, on 18.03.2025 by making certain additions.
Aggrieved by the reassessment order, the assessee filed an appeal before the CIT(A), NFAC. The CIT(A), however, dismissed the appeal through an ex parte order dated 02.06.2026.
The assessee carried the matter before the Tribunal and contended that the CIT(A) had not provided a proper opportunity of hearing. It was argued that the appeal had been dismissed in violation of the principles of natural justice and without properly adjudicating the grounds raised against the additions made by the Assessing Officer.
The Revenue relied upon the order of the CIT(A) and sought dismissal of the assessee’s appeal.
After examining the appellate order, the Tribunal noticed that the assessee had not made proper compliance during the proceedings before the CIT(A). Consequently, the appellate order had been passed ex parte without hearing the assessee.
However, the Tribunal further found that, while deciding the first appeal, the CIT(A) had not adjudicated all the grounds raised by the assessee on their merits.
The Tribunal held that, considering the circumstances and in the interest of natural justice, the assessee should be granted another opportunity to present its case. Accordingly, the order of the CIT(A) was set aside and the entire matter was remanded to the CIT(A) with a direction to decide the appeal afresh on merits, in accordance with law, after providing an adequate opportunity of hearing to the assessee.
The assessee’s appeal was accordingly partly allowed for statistical purposes.
Author’s Comments
The powers and duties of the CIT(A) are materially different from those of an ordinary administrative authority. Under section 250(6), the order of the CIT(A) is required to be in writing and must state the points for determination, the decision thereon and the reasons for such decision.
Therefore, even where the assessee remains absent or fails to comply with appellate notices, the CIT(A) cannot ordinarily dismiss the appeal merely for non-prosecution. The CIT(A) is expected to examine the assessment order, grounds of appeal and available material and decide the issues on merits.
At the same time, the ruling should not be understood as giving an assessee an unrestricted right to ignore notices issued during appellate proceedings. Repeated non-compliance may result in an ex parte decision on the basis of the available record. However, even such an ex parte order must contain an independent adjudication of every material ground raised in the appeal.
The distinction is important: the CIT(A) may decide an appeal ex parte, but should not dismiss it merely because the assessee did not appear. The appellate authority must pass a reasoned and speaking order on merits.
The Tribunal has therefore rightly balanced both aspects. It acknowledged the assessee’s failure to make proper compliance but nevertheless restored the matter because all the grounds had not been adjudicated on merits. On remand, the assessee must diligently participate in the proceedings and place all relevant explanations and supporting evidence before the CIT(A).
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, KOLKATA
The present Appeal is filed by the Assessee against the order of the NFAC, Delhi (‘Ld. CIT(A)’ for short) dated 02.06.2026, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) pertaining to the Assessment Year 2019-20.
2. Brief facts of the case are that, an Assessment Order came to be passed u/s 147 r.w.s. 144B of the Act on 18.03.2025 by making certain additions. Aggrieved by the Assessment Order dated 18.03.2025, Assessee filed an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 02.06.2026, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 02.06.2026, Assessee filed the present Appeal.
3. The Ld. Counsel for the Assessee vehemently submitted that the Ld. CIT(A) has provided no proper opportunity of being heard to the Assessee and in violation of principals of natural justice, dismissed the appeal of the Assessee.
4. Per contra, the Ld. Ld. Departmental Representative relying on the orders of the Ld. CIT(A) sought for dismissal of the Appeal.
5. We have heard both the parties and perused the material available on record. It can be seen from the order of the Ld. CIT(A), the Assessee has not made proper compliances and the impugned order has been passed ex-parte without hearing the Assessee. It is further observed that while deciding the first Appeal, the Ld. CIT(A) has not decided all the grounds of Appeal of the Assessee on its merits. Considering the facts that the Assessee has not participated in the first Appellate proceedings, in the interest of natural justice, we remand the matter to the file of the Ld. CIT(A) with a direction to the Ld. CIT(A) to decide the Appeal afresh on its merits in accordance with law after providing opportunity of being heard to the Assessee.
6. In the result, Appeal of the Assessee is partly allowed for statistical purposes.
Order pronounced on 15.09.2026.
