CIT(A) cannot dismiss appeal for non-prosecution; must decide on merits under ss 250, 251, 69A, 115BBE

ITAT Delhi set aside the ex parte order of CIT(A) passed for non-prosecution, holding that under ss. 250 and 251, CIT(A) is mandated to adjudicate appeals on merits and lacks jurisdiction to dismiss them for default. The Tribunal clarified that CIT(A) must examine all issues arising from the assessment order, irrespective of whether specifically raised by the assessee. Without expressing any view on the taxability of unexplained money u/s 69A r.w.s. 115BBE, ITAT remanded the matter to the AO for de novo assessment.

---

---

Issues: Whether the impugned assessment and the CIT(A)'s ex-parte dismissal upholding addition of Rs.3,75,000 under section 69A r.w.s. 115BBE are sustainable, and whether the matter should be remitted for fresh adjudication.

Analysis: The Tribunal examined statutory obligations of the first appellate authority under section 250(6) of the Income-tax Act, 1961 and related provisions in chapters concerning disposal of appeals (sections 250(4), 250(5), 251(1)(a), 251(1)(b) and Explanation to section 251(2)). The Tribunal noted that the CIT(A) dismissed the appeal ex parte for non-prosecution without recording points for determination and reasoned decisions on each point, and that the assessment was completed under section 143(3) ex parte. Considering authorities and statutory text, the Tribunal concluded that the CIT(A) is obliged to apply mind to the issues and decide the grounds on merits even in ex parte proceedings, and that where such obligation is not fulfilled a remand to the appropriate authority for fresh consideration is warranted in the interest of justice. The Tribunal expressly did not decide the merit of the addition under section 69A/115BBE but directed de-novo adjudication by the Assessing Officer after affording opportunity of hearing.

Conclusion: The impugned orders are set aside and the matter is remitted to the file of the Assessing Officer for de-novo consideration after affording adequate opportunity of hearing; appeal allowed for statistical purposes (in favour of the assessee).

Ratio Decidendi: Where a CIT(A) dismisses an appeal ex parte for non-prosecution without stating points for determination and reasons as required by section 250(6), the CIT(A) must nevertheless decide the grounds on merit and failure to do so warrants setting aside and remand for fresh adjudication in the interest of justice.

---