TaxTMI 
TaxTMI 
2019 (4) TMI 625
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....of the case as prescribed under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963?" 2. Having heard the learned counsel appearing for the parties, we are satisfied that the impugned order of the Tribunal deserves to be set aside and the matter deserves to be remanded to the Tribunal for hearing the matter on merits. 3. Section 254 of the Act empowers the Tribunal to pass such orders 'as it thinks fit' after giving both the parties an opportunity of being heard. Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 is quoted below for ready reference:- "Hearing of appeal ex parte for default by the appellant. Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent; Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance, when the appeal was called on for hearing, ....
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...."thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear. As observed in Hukumchand Mills Ltd. v. CIT (AIR 1967 SC 455), the word "thereon" in Section 33(4) restricts the jurisdiction of the Tribunal to the subject-matter of the appeal and the words "pass such orders as the Tribunal thinks fit" include all the powers (except possibly the power of enhancement) which are conferred upon the Appellate Assistant Commissioner by Section 31 of the Act. The provisions contained in Section 66 about making a reference on questions of law to the High Court will be rendered nugatory if any such power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default without making any order thereon in accordance with Section 33(4). The position becomes quite simple when it is remembered that the assessee or the CIT, if aggrieve....
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....ent when the appeal was taken up for hearing. The High Court also erred in law in upholding the order of the Tribunal. 14) We, therefore, set aside the order dated 18.01.2014 passed by the High Court of Judicature of Bombay, Bench at Aurangabad and also the order dated 22.08.2012 passed by the Tribunal and direct the Tribunal to decide the appeal on merits. 15) Accordingly, the appeal is allowed with a cost of Rs. 25,000/- to be payable by the Respondent." 5. The following observation of Special Bench of Madras High Court in S.Chenniappa Mudaliar v. CIT ((1964) 5 ITR 323) affirmed by Hon'ble Supreme Court in CIT v. S.Chenniappa Mudaliar ((1969) 1 SCC 591) = ((1969) 74 ITR 41) are also interesting and quoted below:- "To sum up the position, the Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to assessment of income-tax. Its composition, consisting as it does of qualified persons in law and accountancy, makes it peculiarly qualified to deal with all questions raised in a case, whether there be assistance from the party or his counsel or not. Section 33(4) obliges i....
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....unsels may, some time, not put in appearance for a variety of reasons or for genuine overriding reasons for such non-appearance of the Counsels on their parts may be because of non-availability of the Counsels on particular day, costs involved in engaging counsels, etc. or any other such factors but, that does not entitle the Tribunal to dismiss the appeal without deciding the merits of the case. 8. On a conjoint reading of the relevant provisions of the Act, Rule 24 of the Income Tax (Appellate Tribunal) Rules and the aforesaid decisions of the Hon'ble Supreme Court, we are of the considered opinion that the Tribunal could not have dismissed the appeal for want of prosecution. Even if the assessee could not appear, the Tribunal could have decided the appeal only on merits, ex parte, after hearing the Revenue Side but, the dismissal of the appeal for want of prosecution is not only illegal but also entails further litigation and proceedings by compelling the Assessee to move for setting aside the ex parte order, which Tribunal is supposed to do but in the present case even that application too came to be dismissed by the learned Tribunal. 9. The Proviso to Rule 24 clearly....