Income-tax appeal must be decided on merits despite non-appearance; dismissal for non-prosecution cannot replace appellate adjudication.

An income-tax appeal before the Commissioner (Appeals) cannot be dismissed solely for non-appearance where the grounds of appeal are already on record, because the appellate authority must exercise its co-terminus powers and decide the matter on merits. A dismissal for non-prosecution is therefore unsustainable. The delay in filing the Tribunal appeal was also not treated as a bar to relief, since the Court considered the assessee's conduct, the pandemic period, and the absence of mala fides, and restored the dispute for fresh adjudication. The matter was remitted to the Commissioner (Appeals) for decision in accordance with law.

---

---

Issues: (i) Whether the first appellate authority could dismiss an appeal for non-appearance without deciding it on merits; (ii) whether the belated appeal before the Tribunal and the circumstances of delay warranted interference and restoration of the matter for decision on merits.

Issue (i): Whether the first appellate authority could dismiss an appeal for non-appearance without deciding it on merits.

Analysis: Section 251 of the Income-tax Act, 1961 confers appellate powers on the Commissioner (Appeals) to confirm, reduce, enhance or annul an assessment, and the appellate jurisdiction is co-terminus with that of the Assessing Officer. In the circumstances, the appeal could not be terminated merely because the assessee did not appear, once the grounds of appeal had been placed on record. The appellate remedy before the Commissioner (Appeals) was treated as a substantive and valuable remedy requiring adjudication on merits.

Conclusion: The dismissal of the appeal by the Commissioner (Appeals) for non-prosecution was held to be unsustainable and contrary to law.

Issue (ii): Whether the belated appeal before the Tribunal and the circumstances of delay warranted interference and restoration of the matter for decision on merits.

Analysis: The delay was considered in the context of the assessee's conduct, the period affected by the pandemic, and the absence of material showing deliberate abandonment or mala fides. The Court balanced limitation against the need to decide the tax dispute on merits and found that the appeal should not fail solely on the ground of delay where a substantive issue regarding the validity of the first appellate order remained unresolved.

Conclusion: The delay was not treated as a bar to granting relief, and the matter was restored for adjudication on merits.

Final Conclusion: The appeal was allowed, the orders of the Tribunal and the Commissioner (Appeals) were set aside, and the matter was remitted to the Commissioner (Appeals) for fresh decision in accordance with law.

Ratio Decidendi: An income-tax appeal before the Commissioner (Appeals) cannot be dismissed solely for non-appearance where the grounds are on record, because the appellate authority must decide the matter on merits within its co-terminus powers.

---