2024 (11) TMI 631 - AT - Income Tax

CIT(A) cannot dismiss appeals for default under section 250, must decide on merits even without assessee presence

M/s. Medavakkam Vattara Nadargalikkiya Sangam Versus The Income Tax Officer, Non-Corporate Ward-22 (1), Tambaram.

ITAT Chennai held that CIT(A)-NFAC's dismissal of appeal for default was legally invalid. The tribunal ruled that under section 250 of the Income Tax Act, ... CIT(A)-NFAC dismissed the appeal for default and not adjudicated or decided merits of the case - HELD THAT:- After going through the provisions of the Act particularly provision of section 250 we are of the view that the CIT(A) is a quasi judicial authority and in the statute of Income Tax Act, CIT(A) cannot dismiss the appeal for default expressly or by inevitable implication, but the appellate authority has to decide the appeal on merits. The appellate authority has no jurisdiction to dismiss the appeal for default but he is bound to decide the appeal on merits even in the absence of the assessee. We further noted that, this view has been taken in the case of Southern Steel Industries [1995 (10) TMI 209 - MADRAS HIGH COURT] Hence, dismissal for default by CIT(A) is bad in law and accordingly, we set aside the order of CIT(A). The order of CIT(A) is set aside and matter remanded back to his file for fresh adjudication. Needles to say that CIT(A), after allowing reasonable opportunity of being heard to the assessee, will decide the issue of delay first and in case delay is condoned, he will decide merits of appeals. Issues:Delay in filing appeals, condonation of delay, dismissal of appeal for non-prosecution, statutory provisions for condonation of delay, jurisdiction of CIT(A) to dismiss appeal for default.Analysis:The appeals by the assessee were related to orders of the Commissioner of Income Tax, Appeal, regarding the processing of income tax returns for various assessment years. The common issue in these appeals was the delay in filing the appeals and the subsequent dismissal by the Addl./JCIT, Delhi. The assessee contended that there was a reasonable and sufficient cause for the delay, which was not accepted by the JCIT. The JCIT emphasized the requirement of 'sufficient cause' for condonation of delay under section 249(3) of the Income Tax Act, stating that the cause provided by the appellant was general and unverifiable. The CIT(A) dismissed the appeal for non-prosecution, citing judicial precedents emphasizing the need for effective pursuit of appeals.The CIT(A) noted that the assessee did not submit a petition requesting condonation of delay. However, the ITAT Chennai observed that the condonation of delay should not be summarily dismissed for lack of a condonation petition. Referring to the provisions of the Income-tax Act and the Code of Civil Procedure, the ITAT emphasized that the absence of an application for condonation of delay should not render the appeal invalid. The ITAT also highlighted the principle that the courts should assist vigilant litigants and consider genuine grievances even if mistakes were made.The ITAT Chennai held that the CIT(A) had erred in dismissing the appeal for default and not deciding on the merits of the case. Citing the statutory provisions and judicial precedents, the ITAT emphasized that the CIT(A) is a quasi-judicial authority obligated to decide appeals on merits, even in the absence of the assessee. The ITAT referred to a High Court judgment to support its position that dismissal for default by the CIT(A) is not permissible. Consequently, the ITAT set aside the order of the CIT(A) and remanded the matter for fresh adjudication, directing the CIT(A) to first decide on the delay issue and then proceed to decide on the merits of the appeals after providing a reasonable opportunity to the assessee.In conclusion, the appeals filed by the assessee were allowed for statistical purposes, and the order was pronounced in open court at Chennai on 21st October 2024.