2021 (5) TMI 517 - AT - Income Tax

Ex parte order passed by the Ld. Commissioner for non-prosecution - HELD THAT - As gone through the ex parte order passed by the Ld. Commissioner for non-prosecution without discussing the merits of the case. The assessee has raised more than 09 grounds and furnished statement of facts filed along with Form No. 35. The ld. Commissioner is permitted to pass the ex parte order but the same should be on merits. In the instant case, the ld. Commissioner passed the order without considering the merits. The ITAT, Delhi Bench in the case of Pawan Kumar Singhal 2019 (7) TMI 869 - ITAT DELHI held after considering the decisions of the various High Courts and Hon'ble Supreme Court that the ld. Commissioner required to pass the order on merits stating the points for determination, decision thereon and reasons for decision. In the instant case, there is no dispute that the Ld. Commissioner has confirmed the order of the AO for non-prosecution, therefore, in the interest of justice, we consider it is appropriate to remand the matter back to the ld. Commissioner to decide the appeal on merits. Accordingly, appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
Appeal against order of Commissioner of Income Tax (Appeals) for A.Y. 2015-16 dismissed for non-prosecution.

Analysis:
The appeal was filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals) for the Assessment Year 2015-16. The assessee had initially filed a return of income showing a total loss, which was later adjusted by the Assessing Officer resulting in an addition to the returned income. Subsequently, the Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee for non-prosecution, stating that the appellant did not show interest in prosecuting the appeal despite multiple notices and opportunities provided. The Commissioner's order did not discuss the merits of the case, leading to the assessee filing an appeal before the ITAT.

Upon hearing the arguments and reviewing the case, the ITAT found that the Commissioner had passed an ex parte order without considering the merits of the case. Citing precedents, the ITAT emphasized that the Commissioner (Appeals) is obliged to dispose of the appeal on merits, stating the points for determination, decision thereon, and reasons for the decision. The ITAT referred to various statutory provisions under the Income Tax Act, highlighting that once an appeal is filed, the authority is bound to decide the appeal on merits and cannot dismiss it for non-prosecution.

Considering the circumstances and the legal provisions, the ITAT set aside the order of the Commissioner and remanded the matter back to the Commissioner to decide the appeal on merits. The ITAT directed the Commissioner to pass a fresh order after considering the admissibility and maintainability of the appeal, along with all relevant documents submitted by the assessee. The ITAT stressed the importance of adhering to principles of natural justice and statutory provisions while passing a fresh order.

In conclusion, the ITAT allowed the appeal of the assessee for statistical purposes, emphasizing the need for the Commissioner to decide the appeal on merits rather than dismissing it for non-prosecution. The order was pronounced on May 5th, 2021, in open court.