2021 (3) TMI 211 - AT - Income Tax

Ex-parte order of CIT-A - CIT(A) order shows that he has dismissed the appeal preferred by the assessee due to non prosecution - HELD THAT - CIT(A) has not given any reason for his decision on merits but has simply dismissed the appeal on account of non appearance which is not as per the statute. Therefore deem it proper to restore the issue to the file of the Ld. CIT(A) with a direction to decide the appeal on merit by passing a speaking order after giving one last opportunity to the assessee to substantiate its case. The assessee is also hereby directed to appear before the Ld. CIT(A) and substantiate its case failing which the Ld. CIT(A) is at liberty to pass appropriate order as per law.

Summary

Issues:
Appeal against ex parte order of Ld. CIT(A) sustaining addition under section 41(1) of the Income Tax Act for assessment year 2015-16.

Analysis:

The appeal was filed by the assessee against the ex parte order of the Ld. CIT(A) relating to the assessment year 2015-16. The grounds raised by the assessee all pertained to the ex parte order of the Ld. CIT(A) dismissing the appeal for non-prosecution and upholding the addition made by the Assessing Officer under section 41(1) of the Income Tax Act. The assessee, a company engaged in wholesale business, had a tax demand raised by the AO. Despite the service of notice, the assessee did not appear, leading to the decision being based on the material available on record and the hearing of the Ld. Sr. DR.

The Ld. CIT(A) dismissed the appeal due to non-prosecution, citing precedents like the decision of the Supreme Court in the case of CIT vs. B N Bhattacharya and the Tribunal's decision in the case of CIT vs. Multiplan India Pvt. Ltd. The Ld. CIT(A) did not provide reasons for the decision on merits, which is required by section 250(6) of the Income Tax Act. Therefore, the Tribunal deemed it appropriate to remand the issue back to the Ld. CIT(A) with directions to decide the appeal on merit after giving the assessee one last opportunity to present its case. The Ld. CIT(A) was instructed to pass a speaking order, and if the assessee failed to appear, the Ld. CIT(A) could pass an appropriate order as per law. The Tribunal allowed the appeal for statistical purposes, emphasizing the importance of a reasoned decision in such matters.

In conclusion, the Tribunal's judgment highlighted the necessity for a reasoned decision by the appellate authority, especially when dismissing an appeal due to non-prosecution. The case was remanded back to the Ld. CIT(A) with clear directions to decide the appeal on merit after providing the assessee with a final opportunity to present its case. The importance of adherence to statutory provisions and principles of natural justice was underscored in the judgment.