2022 (5) TMI 604 - AT - Income Tax

Tribunal emphasizes fair hearings, criticizes dismissal for non-prosecution, sets precedent for just tax dispute resolution

The Tribunal set aside the order of the CIT(A) and allowed the appeal for statistical purposes, emphasizing the importance of deciding appeals on merits ... Ex-parte order - powers of the CIT(A) to dismiss appeal for non prosecution - HELD THAT:- We find that though the impugned order states that more than three times the notice was issued but nowhere had it been noted in the impugned order that such a notice was served on the assessee. In the given facts and circumstances of the case, we are of the view that interest of justice would be met, if the order of CIT(A) is set aside and the appeal of the Assessee before CIT(A) be directed to be decided afresh after affording opportunity of being heard to the Assessee. Appeal is treated as allowed for statistical purpose. Issues:- Appeal against order of CIT(A) for Assessment Year 2008-09- Dismissal of appeal for non-prosecution by CIT(A)- Application for recall of order dismissed by ITAT- Jurisdiction of ITAT to decide appeal on meritsAnalysis:1. The appeal was filed by the assessee against the order of CIT(A) for Assessment Year 2008-09. The Assessing Officer (AO) had determined the total income of the assessee after making additions. The CIT(A) issued multiple notices of hearing to the assessee, but due to no response, proceeded to dismiss the appeal for non-prosecution, citing the decision in the case of CIT Vs. Multiplan India Pvt. Ltd. The CIT(A) observed a lack of sufficient material to grant relief to the assessee.2. The assessee, aggrieved by the order of the CIT(A), filed an appeal before the Tribunal. The Tribunal considered the judgment of the Delhi High Court in the case of Golden Times Services Pvt. Ltd. vs. Dcit, emphasizing that adjudication on the merits of the case is essential before dismissing an appeal for default. The Tribunal found that the CIT(A) did not serve notices on the assessee despite issuing them multiple times. Therefore, the Tribunal set aside the order of the CIT(A) and directed the appeal to be decided afresh after providing an opportunity to the assessee to be heard.3. The Tribunal highlighted the importance of deciding appeals on merits and providing both parties with an opportunity to present their case. It criticized the approach of dismissing appeals for non-prosecution without considering the substantive issues involved. The Tribunal emphasized that the right to appeal and present substantial questions of law should not be deprived due to procedural lapses. The judgment underscored the duty of the ITAT to ensure a fair hearing and proper adjudication of appeals.4. The Tribunal's decision to set aside the order of the CIT(A) and allow the appeal for statistical purposes reflects a commitment to upholding the principles of natural justice and due process in tax matters. By remanding the case back to the CIT(A) for a fresh decision, the Tribunal aimed to safeguard the rights of the assessee and ensure a fair and just resolution based on the merits of the case.5. In conclusion, the judgment underscores the significance of procedural fairness and the duty of appellate authorities to adjudicate appeals on their merits. It highlights the need for a thorough examination of the facts and legal issues involved in tax appeals, emphasizing the right of parties to be heard and present their case effectively. The decision sets a precedent for ensuring a just and equitable resolution of tax disputes through a robust and principled adjudicatory process.