Merits-based appellate disposal overrides default dismissal, and an invalid procedural order may be reopened to prevent prejudice.

Where the appellate statute requires disposal of an appeal on merits, a rule permitting dismissal for default of appearance is inconsistent with that mandate and void. An order passed solely under such an invalid rule is a jurisdictional nullity and cannot stand. Even if the earlier disposal is treated as an erroneous order within jurisdiction, the tribunal has inherent power to restore the appeal and rehear it where the mistake is attributable to the tribunal and prejudice would otherwise result. The operative principle is that procedural defaults should not defeat a statutory right of merit-based appellate adjudication.

---

---

Issues: (i) Whether an order of the Income-tax Appellate Tribunal dismissing an appeal for default of appearance was without jurisdiction and a nullity after the rule authorising such dismissal was held ultra vires. (ii) Whether the Tribunal ought to have restored and reheard the appeal in exercise of its inherent power even if the order was treated as an erroneous order with jurisdiction.

Issue (i): Whether an order of the Income-tax Appellate Tribunal dismissing an appeal for default of appearance was without jurisdiction and a nullity after the rule authorising such dismissal was held ultra vires.

Analysis: The governing provision required the Tribunal to dispose of the appeal on merits. A rule permitting dismissal for default was inconsistent with that mandate and had been declared invalid. Once that rule was held ultra vires, the Tribunal never had power to short-circuit the appeal by dismissing it for non-appearance. An order passed in the absence of such power is a defect of jurisdiction and is void.

Conclusion: The dismissal order was a nullity and could not stand.

Issue (ii): Whether the Tribunal ought to have restored and reheard the appeal in exercise of its inherent power even if the order was treated as an erroneous order with jurisdiction.

Analysis: Even on the assumption that the earlier order was not void, the Tribunal had committed its own procedural mistake by disposing of the appeal otherwise than on merits. A court or tribunal has inherent power to correct such an error where the wrong is not attributable to the party and where prejudice would result if the matter is not reopened. The Tribunal therefore should not have refused rehearing on a technical view of rectification and limitation.

Conclusion: The appeal ought to have been restored and heard on merits.

Final Conclusion: The impugned Tribunal orders were set aside and the appeal was directed to be heard and decided on merits.

Ratio Decidendi: Where the statute obliges the appellate tribunal to decide an appeal on merits, a rule enabling dismissal for default is void and any order made solely under that rule is a jurisdictional nullity; alternatively, the tribunal has inherent power to reopen the matter to prevent prejudice caused by its own mistaken disposal.

---