TaxTMI 
TaxTMI 
2018 (10) TMI 1178
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....or short) wherein adhoc disallowance of 2% out of the total expenses of Rs. 37,90,33,493/-, amounting to Rs. 75,80,669/-, was made. (2.1) Aggrieved, the assessee filed an appeal before Ld. CIT(A), who, vide aforesaid order dated 29.12.2017 dismissed the Assessee's appeal, on the ground that no compliance was made to notices of hearings issued by the Ld. CIT(A). The Ld. CIT(A) presumed that the Assessee did not wish to pursue the appeal, and passed an ex parte order dismissing the appeal. Relevant portion of the order of Ld. CIT(A) is reproduced as under: " 4.1 From the perusal of the above, as there has been no compliance in respect of above notices, therefore, it is presumed that the appellant does not wish to pursue the appeal. 5. As a result, the appeal is dismissed." (2.1.1) In effect, the Ld. CIT(A) dismissed the appeal of Assessee in limine for the reason of non-prosecution of appeal by Assessee. (2.2) Aggrieved again, the Assessee is now in appeal before Income Tax Appellate Tribunal (ITAT). At the time of hearing before us, the Ld. Counsel for Assessee stated that the assessee could not attend the hearings fixed by the Ld. CIT(A) because none of t....
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....e of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred. (2) The following shall have the right to be heard at the hearing of the appeal- (a) the appellant either in person or by an authorized representative; (b) the Assessing Officer, either in person or by a representative. (3) The Commissioner (Appeals) shall have the power to adjourn the hearing of the appeal from time to time. (4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). (5) The Commissioner (Appeals) may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the Commissioner (Appeals) is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable. (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the ....
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....T(A) was duty bound to dispose of the appeal on merits. Moreover, the perusal of Section 251(1)(a) and (b) of I.T. Act and the further perusal of Explanation of Section 251(2) of I.T. Act shows that the Ld. CIT(A) was required to apply his mind to all the issues which arose from the impugned order before him, whether or not these issues had been raised by the Assessee before him. Also, Section 251(1)(a) of I.T. Act provides that while disposing of an appeal against Assessment Order, Commissioner (Appeals) shall have the power to confirm, reduce, enhance or annul the assessment. Similarly, the section 251(1) (b) provides that in disposing of an appeal against an order imposing a penalty, Commissioner (Appeals) may confirm or cancel such orders or vary it so as to either to enhance or to reduce the penalty. On cumulative consideration the provisions U/s 250(6) read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) and Explanation of Section 251(2) of I.T. Act , we come to the conclusion that the Ld. CIT(A) is not empowered to dismiss the appeal in limine for non-prosecution of appeal and is obliged to dispose of the appeal on merits. Once the Assessee files an appeal U/s 246A of I.T....
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....es the appeal of assessee in limine for non-prosecution of appeal by the assessee; in effect, indirectly it leads to same results as withdrawal of appeal by assessee. When the assessee is not permitted to withdraw the appeal filed before the first appellate authority, the first appellate authority is duty bound to not allow a situation to arise, through dismissal of appeal in limine for non-prosecution of appeal before the first appellate authority; in which, in effect, indirectly the same results are obtained as arise from withdrawal of appeal by the assessee. What cannot be permitted in law to be done directly, cannot be permitted to be done indirectly either, as is well settled. In view of the foregoing discussion; and on careful perusal of Section 250(6) r.w.s. 250(4), 250(5), 251(1)(a), 251(1)(b) and Explanation to Section 251(2) of I.T. Act; it is amply clear that Ld. CIT(A) has no power to dismiss appeal in limine for nonprosecution of appeal by the assessee. We draw support from order of Hon'ble Bombay High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) [2016] 240 taxman 133 for the propositions that Ld. CIT(A) is required to apply his mind to all issues wh....
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....fore him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act." (4.1.1.) We have already noted in foregoing paragraph (3.1) of this order, that the assessee has not only filed the appeal promptly, but also has vigorously preferred the appeal and has sincerely prosecuted its appeal in ITAT. At the time of hearing before us, the Assessee's Counsel has expressed the wish to pursue appeal against the Assessment Order, if the Assessment Order is not set aside. Thus, there is nothing in the subsequent conduct of the assessee, after the assessee received the impugned order dated 29.12.2017 of Ld. CIT(A), to validate the presumption of Ld. CIT(A) that the assessee did not wish to pursue the appeal. Further, we have also noted the facts, that the order of Ld. CIT(A) does not make any mention of actual service of notices of hearing on the assessee; and that the Ld. DR failed to bring any evidence for our consideration to prove actual service of notices of hearing on the assessee. In the absence of proof of service of notice of hearing on the assessee, requirements U/s 250(1) and (2) in procedure in appeal ....