2021 (3) TMI 47 - AT - Income Tax

Dismissal of appeal by CIT-A on no representation on behalf of the assessee - denial of natural justice - non-adjudication of issues on merits by the CIT(A) - HELD THAT - A bare perusal of the impugned order shows that the Ld. CIT(A) did not refer to any merits of the assessee's claim but merely because of the absence of the assessee, the appeal was dismissed in limine. Absence of assessee will not deter the first appellate authority from disposing of the appeal on merits It is as well available to the Ld. CIT(A) to look into the papers that are available on record and appraise the merits of the case to reach a reasonable conclusion determining the just tax liability of the assessee. CIT(A) should have considered the fact that in the absence of assessee also the papers will speak for themselves. Instead of dismissing the appeal in limini, the Ld. CIT(A) should have taken little more effort and care to delve deeper into the merits of the case and should have recorded the for reasons to dismiss the appeal. This exercise should have been undertaken by the Ld. CIT(A) because being a statutory appellate authority, it is not open for him to dismiss the appeal for default which power is not available to him. Thus even in the absence of the assessee, it is always open for the Ld. CIT(A) to look into the matter and to find whether or not any reasons are there either to confirm or reverse the conclusion of the A.O. on the claim of assessee - Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against order of CIT(A) - Dismissal of appeal in limine due to absence of assessee - Non-compliance with notices - Principles of Natural Justice - Merits of the case not considered - Just tax liability of the assessee - Power of CIT(A) to dismiss appeal for default.

Analysis:
The appeal was filed challenging the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2012-13. The assessee, engaged in the IT and BPO services business, declared a loss in the return of income. The assessment was completed accepting the stated loss. However, the assessee appealed before the CIT(A) as the credit of tax paid was not fully allowed. The CIT(A) observed that despite multiple notices, the assessee did not appear or pursue the matter, leading to the dismissal of the appeal.

The assessee contended that the order was against the principles of Natural Justice, denied non-compliance with notices, and criticized the non-adjudication of issues on merits by the CIT(A). During the hearing, no representation was made on behalf of the assessee. The Tribunal noted that the notice was sent to the address provided by the assessee, but no steps were taken by the assessee to ensure its receipt. The Tribunal proceeded based on the available record.

The Departmental Representative argued that in the absence of the assessee's interest, the CIT(A) had to proceed with the matter. The Tribunal observed that the CIT(A) should have considered the merits of the case even in the absence of the assessee. The CIT(A) was expected to delve into the papers available on record and reach a reasoned conclusion on the tax liability. Dismissing the appeal for default was not within the CIT(A)'s authority.

The Tribunal concluded that the CIT(A) should have examined the case thoroughly and provided a reasonable opportunity for the assessee to be heard. Therefore, the impugned order was set aside, and the appeal was restored to the file of the CIT(A) for a reasoned decision after granting a fair hearing to the assessee. The appeal of the assessee was allowed for statistical purposes.