2024 (7) TMI 720 - AT - Income Tax

Tribunal Overturns Ex-Parte Order, Emphasizes Merits and Procedural Compliance in Tax Adjudications.

The Tribunal set aside the ex-parte order issued by the NFAC, remanding the case for reconsideration. It underscored the necessity for the NFAC to address ... Ex-parte order by the National Faceless Appeal Centre (NFAC) u/s 250 - HELD THAT:- While exercising the jurisdiction u/s 251(1)(a) of the Act, the CIT(A) is mandated to state point of determination, its decision thereon and clear reasons therefore in terms of section 250(6) of the Act. This exercise by the CIT(A) is a pre-requisite and invariably necessary for each assessment year in each case irrespective of its repetition. This is because in taxation each assessment year per-se is a separate unit as is governed by its own peculiar facts & features and as such the principle of res-judicata is inapplicable in fiscal laws. It is a trite law as laid down in case ‘Chandra Kishore Jha Vs Mahavir Prasad’ [1999 (9) TMI 948 - SUPREME COURT] that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’. Therefore the Ld. NFAC has no power to dismiss the appeal ex-parte for non-prosecution without dealing with the merits therefore. This view stands fortified in ‘CIT Vs Premkumar Agundas Luthra HUF’ [2016 (5) TMI 290 - BOMBAY HIGH COURT]. Therefore, in our considered view, in the absence of clear authorisation in the statue permitting the Ld. NFAC to culminate proceedings without touching merits even in ex-parte proceedings is violative of provision of sub-section (6) of section 250 of the Act. The impugned order passed side-stepping the dictate is since not in consonance with provision of s/s (6) of section 250 of the Act, is set aside and remanded back to Ld. NFAC with a direction to deal therewith de-novo after according two effective opportunities to the appellant assessee and pass a speaking order in terms of section 250(6) of the Act. Appeal allowed for statistical purposes. Issues:1. Appeal against ex-parte order by National Faceless Appeal Centre2. Non-receipt of notices leading to dismissal for non-prosecution3. Adjudication on merits without remand4. Power of National Faceless Appeal Centre to dismiss ex-parteAnalysis:1. The appeal was filed against an ex-parte order by the National Faceless Appeal Centre (NFAC) under section 250 of the Income Tax Act. The appellant company sought relief under section 253(1)(a) of the Act.2. The issue of non-receipt of notices was raised, leading to the dismissal of the appeal for non-prosecution. The appellant claimed that notices were not received at the email address provided, hindering their ability to participate effectively. The Tribunal noted conflicting arguments from both parties regarding the receipt of notices and the appellant's response. The Tribunal highlighted the importance of providing opportunities to the appellant to present their case sincerely without undue adjournments.3. The Tribunal examined the requirement under section 251(1)(a) of the Act for the Commissioner of Income Tax (Appeals) to adjudicate on issues without the right to remand the matter back. It emphasized the necessity for the CIT(A) to state the point of determination, decision, and reasons for each assessment year, as fiscal laws treat each year as a separate unit. The Tribunal referenced legal precedents to support the need for proper adjudication in tax matters.4. The Tribunal analyzed the power of the NFAC to dismiss appeals ex-parte without addressing the merits of the case. It noted that such actions were not in line with the provisions of section 250(6) of the Act. The Tribunal cited legal cases to support its view that the NFAC must deal with the merits of the case even in ex-parte proceedings. The impugned order was set aside, and the case was remanded to the NFAC for a fresh consideration with clear directions to follow the statutory provisions.In conclusion, the appeal was allowed for statistical purposes, emphasizing the importance of adherence to procedural and substantive requirements in tax matters.