Case Law Details
Ask Chemicals India Private Limited Vs DCIT (ITAT Pune)
In the case of Ask Chemicals India Private Limited vs. DCIT, ITAT Pune reviewed an appeal against the order of the National Faceless Appeal Centre (NFAC), which had dismissed the assessee’s appeal for non-prosecution without considering the merits. The dispute arose when the assessee’s return for AY 2019-20 was processed under Section 143(1) of the Income Tax Act, 1961, leading to prima facie disallowances of gratuity payments and ESI contributions. The assessee challenged these adjustments before the NFAC, but the appeal was dismissed solely due to non-appearance, without evaluating the substantive issues.
The ITAT observed that it is a settled legal principle that the Commissioner of Income Tax (Appeals) must adjudicate appeals on merits, even in cases of ex-parte proceedings. The tribunal held that NFAC’s failure to do so was contrary to established legal norms. Consequently, the ITAT remanded the matter to NFAC for fresh adjudication, directing it to review the case based on available records and decide the appeal on its substantive merits. This decision reinforces the obligation of appellate authorities to evaluate issues thoroughly rather than dismissing appeals purely on procedural grounds.
The case was represented by CA Kishor Phadke (Assisted by CA Saurabh Jadhav)
FULL TEXT OF THE ORDER OF ITAT PUNE
This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 24.02.2023 for the assessment year 2019-20.
2. Briefly, the facts of the case are that the appellant had filed Return of Income for the assessment year 2019-20 on 29.11.2019.
Against the said return of income, an intimation u/s 143(1) of the Income Tax Act, 1961 (‘the Act’) was received by the appellant. The intimation dated 01.05.2020, wherein, the prima-facie adjustment of gratuity payment of Rs.6,36,570/- and ESI amount of Rs.3,056/- was disallowed. Against the said intimation, an appeal was filed before the NFAC, who vide impugned order dismissed the appeal in limine for non-prosecution without going into the merits of the adjustments.
3. Being aggrieved, the appellant is in appeal before this Tribunal in the present case.
4. I heard the rival submissions and perused the material on record. On perusal of the impugned order, it would be clear that the NFAC had dismissed the appeal in limine for non-prosecution. Now, the law is settled to the extent that the Commissioner of Income Tax (Appeals) is bound to dispose of the appeal on merits even in the case of ex-parte The settled positions of law mandates the Commissioner of Income Tax (Appeals) to dispose of the appeal by adjudicating the issue raised in appeal on merits. In the circumstances, I am of the considered opinion that the NFAC should go into to the merits of the issue in appeal and dispose the appeal. Since the NFAC had not disposed of the matter on merits, I remand the matter to the file of the NFAC for fresh adjudication on merits based on the material available on record.
5. In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced on this 10th day of July, 2023.
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