2019 (6) TMI 286 - AT - Income Tax

ITAT overturns dismissal, orders fresh adjudication of appeals, emphasizes merits over non-prosecution

The ITAT set aside the CIT(A)'s orders dismissing the appeals for non-prosecution and upholding penalties under Section 271(1)(c) for Assessment Years ... Power of CIT(A) to dismiss appeals ex-parte - penalty u/s 271(1)(c) - HELD THAT:- CIT(A) simply noticed the non-attendance of the assessee and thereafter dismissed the appeals for want of prosecution. It is true that the assessee failed to prosecute his appeals and to submit necessary explanation; but, again, sub-section (6) of Section 250 mandates the CIT(A) to decide the appeals on merits and not to dismiss them in default or for want of prosecution. As far as the observations of the CIT(A) that the appeals are dismissed on merits are concerned, we are of the view that no such discussion is discernible in the order of the learned CIT(A). It is just a single word for the sake of exhibiting compliance of mandate under section 250(6) of the Act. Therefore, we set aside all these orders and restore all the appeals to the file of the learned CIT(A) for fresh adjudication. CIT(A), while adjudicating these appeals, shall take into consideration the judgment in the case of B. Loganathan Vs. ITO [2019 (3) TMI 1003 - MADRAS HIGH COURT]. - Assessee's appeals are allowed for statistical purposes. Issues:Appeals against orders of CIT(A) dismissing appeals ex-parte and confirming penalties under Section 271(1)(c) for Assessment Years 2006-07, 2007-08, and 2008-09.Analysis:The appeals were filed by the assessee against orders of the CIT(A) dismissing the appeals ex-parte and upholding penalties imposed by the Assessing Officer under Section 271(1)(c) for the mentioned assessment years. The CIT(A) dismissed the appeals due to non-prosecution by the assessee, despite multiple opportunities provided for hearings. The CIT(A) cited relevant case laws emphasizing the need for effective pursuit of appeals and the consequences of non-appearance. The CIT(A) concluded that the appellant showed disinterest in prosecuting the appeals, leading to their dismissal for non-prosecution. Additionally, the CIT(A) upheld the penalties imposed by the Assessing Officer on the merits of the case, specifically related to unexplained cash deposits under Section 68.The ITAT observed that the CIT(A) failed to determine the points in dispute, consider the submissions made by the assessee, or review the facts presented during the appeals process. While acknowledging the assessee's failure to prosecute the appeals adequately, the ITAT highlighted that the CIT(A) is mandated under Section 250(6) to decide appeals on merits rather than dismiss them due to non-prosecution. The ITAT found that the CIT(A) did not provide a detailed discussion on the merits of the case before dismissing the appeals. Consequently, the ITAT set aside the CIT(A)'s orders and remanded the appeals back to the CIT(A) for fresh adjudication. The ITAT directed the assessee to cooperate with the CIT(A) and submit necessary details during the fresh adjudication process.In conclusion, the ITAT allowed all the appeals for statistical purposes, emphasizing the need for proper adjudication based on merits and compliance with legal procedures. The decision was pronounced in court on 30th May 2019 at Ahmedabad.