2008 (4) TMI 82 - HC - Income Tax

Tribunal by the impugned order dismissed the appeals solely on the ground that the appellant-assessee had failed to appear before it on the date fixed for hearing even if the appellant-assessee was absent before the Tribunal, the only course open to it was to dispose of the appeal on the merits - impugned order of the learned Tribunal is interfered with and is quashed

Summary

Issues:
Challenge to order of Income-tax Appellate Tribunal dismissing appeals for failure to appear, Interpretation of Income-tax Act and Rules, Applicability of precedent in dismissing appeals for default.

Analysis:
The petitioner challenged the order of the Income-tax Appellate Tribunal dismissing four appeals due to the petitioner's absence during the hearing. The Tribunal relied on rule 19(2) of the Income-tax (Appellate Tribunal) Rules, 1963, and the decision in CIT v. Multiplan India (P.) Ltd. [1991] 38 ITD 320. The petitioner argued that the Tribunal erred in dismissing the appeals solely based on non-appearance, citing section 254 of the Income-tax Act, 1961, and rule 24 of the Rules. The petitioner contended that even in the absence of the appellant, the Tribunal should have decided the appeals on merits, invoking legal precedents like CIT v. S. Chenniappa Mudaliar [1969] 74 ITR 41 and The Assam Tribune v. CIT [2006] 285 ITR 452.

The Revenue did not dispute the legal position presented by the petitioner and agreed that the appeals should be disposed of on merits. After considering the arguments and relevant legal provisions, the Court found that the Tribunal's decision to dismiss the appeals for non-appearance was not sustainable. The Court emphasized that section 254 of the Act mandates disposal of appeals on merits, as highlighted in CIT v. S. Chenniappa Mudaliar [1969] 74 ITR 41. Additionally, the Court noted that rule 24 did not authorize the Tribunal to dismiss an appeal for default in the absence of the appellant. The reliance placed by the Tribunal on the decision in CIT v. Multiplan India (P.) Ltd. [1991] 38 ITD 320 was deemed misplaced in light of the apex court's decision in CIT v. S. Chenniappa Mudaliar [1969] 74 ITR 41.

Consequently, the Court set aside the Tribunal's order and directed the Tribunal to decide the appeals on merits in accordance with the law. The Court instructed the Tribunal to expedite the process, aiming for disposal within six months, especially concerning the assessment for the year 1988-89. No costs were awarded in this matter.