Smt.
Ritha Sabapathy v. DCIT
(2019)
taxmann.com 431 (Madras)
Ratio :
Even if the assessee does not appear during a hearing,
the ITAT should decide the appeal only on merit, ex parte, after hearing the
Revenue side.
Decision cited :
In the case of Balaji Steel Re-Rolling Mills v. CCE & C [2014] 52 taxmann.com 107 (SC), the Court held that the fact finding Appellate Tribunals should decide the appeals only on merits and they have no power to dismiss the Appeals for want of prosecution.
In the case of CIT v. S. Chenniappa Mudaliar [1969]
74 ITR 41 (SC), the Court considered the provisions of Section 33 of the
Income-tax Act, 1922 and Rule 24 of the Appellate Tribunal Rules, 1946 and held
that there is no escape from the conclusion that under Section 33(4) the
Appellate Tribunal has to dispose of the appeal on the merits and cannot
short-circuit the same by dismissing it for default of appearance. The
dismissal of an appeal before the Income tax Appellate Tribunal for default of
appearance of the appellant, will, therefore, be ultra vires.
Facts of the case :
Aggrieved
with the order of CIT(A), the assessee preferred an appeal before the hon’ble
ITAT. On the date of hearing, the assessee / AR could not appear for a
sufficient cause. The hon’ble ITAT instead of deciding the case on merit,
dismissed the appeal for want of prosecution.
Question before the High Court :
Whether the hon’ble ITAT was right in law in dismissing the appeal
preferred by the Appellant on the ground of non-appearance without disposing
the appeal on the merits of the case as prescribed under Rule 24 of the Income
Tax (Appellate Tribunal) Rules, 1963?
High Court’s verdict :
The
hon’ble High Court set aside the impugned order of the hon’ble ITAT and directed the ITAT
to decide the appeal on merits afresh in accordance with law.
While deciding the same, the hon’ble High Court relied upon Rule 24 of Income Tax (Appellate Tribunal)
Rules, 1963 which does not permit the Tribunal to dismiss the case for default
of appearance at all. Even if the assessee does not appear, the Tribunal should
have decided the appeal only on merits, ex parte, after hearing the Revenue
Side. The Proviso to Rule 24 clearly mandates that when the assessee appears
afterwards, the Tribunal after considering there was a sufficient cause for non-appearance,
shall set aside such ex parte order and restore the appeal for deciding the
same on merits.
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