Reassessment approval and merits-based appellate adjudication: prior authority validation upheld, but ex parte dismissal without reasons was set aside.

Prior approval for reassessment was valid where, for an assessment year beyond three years from the end of the relevant year, the approval was obtained from the Chief Commissioner, being the specified higher authority for that period. The challenge to initiation of reassessment therefore failed. By contrast, a first appellate authority cannot dispose of an appeal ex parte merely for non-appearance or non-compliance without deciding the grounds on merits under section 250(6) and recording reasons. An appellate order must address the issues raised and afford a reasonable opportunity of hearing; the ex parte dismissal was set aside and the matter restored for fresh adjudication.

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Issues: (i) Whether the prior approval for initiation of reassessment proceedings was granted by the correct specified authority under the Income-tax Act, 1961; (ii) Whether the first appellate authority could dismiss the appeal ex parte for non-compliance without adjudicating the grounds on merits.

Issue (i): Whether the prior approval for initiation of reassessment proceedings was granted by the correct specified authority under the Income-tax Act, 1961.

Analysis: For an assessment year where more than three years had elapsed from the end of the relevant assessment year, the statute required approval of the higher specified authority. The order under section 148A(d) was shown to have been passed with prior approval of the Chief Commissioner of Income Tax, which satisfied the statutory requirement for approval by the specified authority.

Conclusion: The approval for initiation of reassessment proceedings was valid and the challenge on this ground failed.

Issue (ii): Whether the first appellate authority could dismiss the appeal ex parte for non-compliance without adjudicating the grounds on merits.

Analysis: The appellate authority disposed of the appeal only on account of non-appearance and non-compliance, without deciding the grounds raised on merits as required by section 250(6). The matter also involved the assessee's stated inability to attend on account of medical treatment. An appellate order must contain reasons and adjudication on the issues raised, and the appeal cannot be rejected merely for want of prosecution.

Conclusion: The ex parte dismissal was set aside and the appeal was restored for fresh adjudication on merits with an opportunity of hearing.

Final Conclusion: The challenge to the reassessment approval was rejected, but the appellate order was annulled for want of merits-based adjudication and the matter was sent back for fresh decision.

Ratio Decidendi: Where the statute prescribes approval by a specified authority for reassessment, compliance is satisfied if approval is obtained from the authority designated for the elapsed limitation period; and a first appellate authority cannot dispose of an appeal merely for non-prosecution without adjudicating the grounds on merits and giving a reasonable opportunity of hearing.

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