2020 (12) TMI 53 - HC - Income Tax

Non prosecution of appeal - ITAT dismissed all three appeals by common order on the ground that none appeared on behalf of the assessee which means that assessee is not interested in prosecuting these appeals - Whether the Tribunal was justified in dismissing the proceedings in limine contrary to the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 ? - HELD THAT - Taking into consideration the language used in Rule 24 of the Rules of 1963 and applying the principles laid down in S. Chenniappa Mudaliar 1969 (2) TMI 10 - SUPREME COURT we have no hesitation to come to the conclusion that the impugned order passed by the Tribunal thereby dismissing the appeals in limine for non-appearance of the appellant holding that the assessee is not interested in prosecuting the appeals is unsustainable. The Tribunal was duty bound to decide the appeals on merits after hearing the respondent Revenue as per mandate of Rule 24 and in terms of ratio in S. Chenniappa Mudaliar (supra). Substantial question is answered by holding that in view of language used in Rule 24, the ITAT was not justified in dismissing the appeals for absence of assessee in limine and it ought to have decided the appeals on merits even if the appellant or his representative was not present when the appeals were taken up for hearing. The impugned order therefore, being contrary to Rule 24 of the Rules of 1963 is unsustainable and the same is liable to be quashed and set aside. ITA allowed.

Summary

Issues:
Appeal dismissal for non-appearance of appellant before the Income Tax Appellate Tribunal (ITAT) in violation of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.

Analysis:
The judgment pertains to three appeals challenging assessment orders for the years 2002-03, 2003-04, and 2004-05 passed by the assessing officer under Section 144 r/w Section 147 of the Income Tax Act. The ITAT dismissed the appeals due to the absence of the assessee or their representative, indicating lack of interest in prosecuting the appeals.

The key contention revolved around the interpretation of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. The appellant argued that the ITAT was obligated to decide the appeals on merit after hearing the respondent, citing precedents like Commissioner of Income Tax Vs. S. Chenniappa Mudaliar. Conversely, the Revenue representative supported the dismissal, claiming the appellant's lack of interest.

The judgment extensively analyzed Rule 24, emphasizing that when the appellant is absent during the hearing, the Tribunal must still decide the appeal on its merits after hearing the respondent. Referring to the Supreme Court's ruling in S. Chenniappa Mudaliar, it was established that appeals should not be dismissed solely due to non-appearance but should be decided based on facts and law.

Consequently, the court held that the ITAT's dismissal of the appeals for non-appearance was unjustified and against Rule 24. The judgment concluded by allowing the Income Tax Appeals, setting aside the ITAT's order, and restoring the appeals for adjudication on merits before the ITAT, emphasizing the importance of deciding cases based on their own merits and in accordance with the law.