Suthir Subramaniam Vs ITO (ITAT Chennai)
ITAT Chennai Sets Aside Ex-parte NFAC Order; Holds CIT(A) Cannot Dismiss Appeal for Non-compliance Without Deciding on Merits
The Chennai ‘C’ Bench of the ITAT, in Shri Suthir Subramaniam Vs. ITO, Ward 2(1), Erode (ITA No.2960/CHNY/2025, AY 2020-21, order dated 16-12-2025), quashed the ex-parte order passed by the CIT(A), NFAC, Delhi, which had dismissed the appeal in-limine for non-compliance. The Tribunal noted that though the Assessee failed to respond to three notices issued by the First Appellate Authority, the CIT(A) had no jurisdiction to dismiss the appeal for default without adjudicating the issues on merits. Relying on the Madras High Court decision in Southern Steel Industries vs. AAC (CT) [1996] 101 STC 273 (Mad), the Tribunal held that the appellate authority is duty-bound to decide the appeal on merits even in the absence of the Assessee. Accordingly, the impugned NFAC order was set aside and the matter was remitted back to the AO for fresh adjudication, with a direction to grant reasonable opportunity of hearing to the Assessee, who was also cautioned to co-operate and not seek unnecessary adjournments. The appeal was thus allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 17.09.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2020-21.
2. At the very outset, we notice that the order passed by the First Appellate Authority (FAA) is ex-parte, since there was no compliance from the assessee to three notices issued from the office of the First Appellate Authority. We also note that the FAA had dismissed the appeal of the assessee in-limine without adjudicating the issues on merits.
3. The Ld.AR submitted that the FAA has dismissed the appeal for non-compliance and not on merits. The Ld.AR further submitted that the assessee could not submit the complete details with regard to the huge cash deposits made during the relevant year before the AO at the time of assessment proceedings. Therefore, it was prayed, in the interest of justice and equity, assessee may be provided with one more opportunity to present his case before the AO.
4. The Ld.DR submitted that adequate opportunities were provided from the offices of the FAA and AO and there is no violation of principles of natural justice. However, he could not controvert the fact that the FAA has dismissed the appeal for noncompliance.
5. We have heard rival submissions and perused the materials on record. The proceeding before FAA was ex-parte, since the assessee did not respond to three notices issued. We strongly deprecate the nonchalant attitude of the assessee in not responding to the notices issued from the offices of the FAA. We also noted that the FAA has simpliciter dismissed the appeal for non-compliance and not adjudicated or decided merits of the case. We find that appellate authority has no jurisdiction to dismiss the appeal for default of non-compliance without going into merits. The FAA is bound to decide the appeal on merits even in the absence of assessee. This view of ours is supported by the decision of Hon’ble High Court of Madras in the case of Southern Steel Industries vs. AAC (CT), reported in [1996] 101 STC 273 (Mad). In term of the above, the order of FAA is set aside. Further, the Ld.AR had submitted that complete details with regard to cash deposits made during the relevant year could not be submitted at the time of assessment proceedings. Therefore, in the interest of justice and fair play, we of the view that the matter ought to be restored to the files of the AO. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to furnish the required details and co-operatewith the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.
6. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 16th December, 2025 at Chennai.
