Income Tax Appellate Tribunal: CIT(A) Cannot Dismiss Appeals For Non-Prosecution

Income Tax Appellate Tribunal: CIT(A) Cannot Dismiss Appeals For Non-Prosecution

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), comprising Challa Nagendra Prasad (Judicial Member) and Pradip Kumar Kedia (Accountant Member), has ruled that the Commissioner of Income Tax (Appeals) (CIT(A)) cannot dismiss appeals solely because the taxpayer is absent (non-prosecution).

The tribunal based its decision on Section 250(6) of the Income Tax Act, which mandates the CIT(A) to clearly define the points for determination in the appeal and issue a reasoned decision on those points. This obligation applies even in ex-parte (one-sided) proceedings.

The case involved an assessee (taxpayer) challenging an order passed by the CIT(A)-29, New Delhi, regarding assessment orders issued by the Assessing Officer. The assessee received a hearing notice, but according to case records, they failed to appear despite multiple notices. Consequently, the CIT(A) dismissed the appeal in limine (at the outset) due to non-prosecution.

The tribunal criticised the CIT(A)'s order for being "cryptic" and lacking any substantial discussion of the merits of the case. It stated, "A simple review of the CIT(A)'s order reveals that the CIT(A) completely disregarded the various points presented for determination and dismissed the assessee's appeal solely due to non-appearance. It's important to remember that the CIT(A) functions as both the adjudicating authority and the appellate authority. Therefore, the CIT(A) could not have simply dismissed the appeal without addressing the issues on their merits."

In the interest of justice, the tribunal restored the matter to the CIT(A). This allows the assessee a proper opportunity to present their case before the CIT(A) regarding the various points raised in the appeal. However, the tribunal cautioned the assessee to fully cooperate with the CIT(A) during the proceedings. If they fail to do so, the CIT(A) has the authority to conclude the appeal proceedings in accordance with the law.

As a result, the tribunal set aside the CIT(A)'s order and directed that all issues raised in the appeal be returned to the CIT(A) for a fresh adjudication following the law and granting the assessee a reasonable opportunity to be heard.