The division bench of the Allahabad High Court recently, in Balaji Tirupati Enterprises v. CIT & Anr, ruled that, the Income Tax Appellate Tribunal (ITAT), while dismissing Appeal for want of representation, is bound to consider the case in merits.
Assessee was aggrieved by the order of the ITAT wherein the Tribunal dismissed the appeal in default on ground that neither the assessee nor his representative was present at the time of hearing. Assessee approached the High Court contending that he had raised six specific grounds before the Tribunal and none of which have been examined or adjudicated by the Tribunal while dismissing the same. The assessee urged that the action of the Tribunal is violation of Rule 24 of Income Tax (Appellate Tribunal) Rules, 1963.
To substantiate their argument, the assessee placed reliance on decision of the similar Court in in the Income Tax Appeal No. 316 of 2008 wherein the Court has held that, “It appears a little strange that when the assessee either himself or through his authorized representative is not attending the hearing to argue the case, still the Tribunal has to decide the appeal on merits. The amendment to the Rule, however, does not admit any doubt. The Tribunal did not have discretion to dismiss the appeal in default. The order to treat the appeal, after adjourning the admission-hearing, on so many dates, virtually amounts to dismissing the appeal for default. The Tribunal could have considered the merits of the case, and may not have found worth admitting, but it did not have power to dismiss the appeal in default. Unless Rule 24 is amended, restoring the powers of the Income Tax Appellate Tribunal to dismiss the appeal in default, the Tribunal does not have any power to dismiss the appeal without adverting to the merits of the appeal.”
The bench comprising Justice Bharati Sapru and Justice Saumitra Dayal Singh accepted the above contention and held in favour of the assessee.
Read the full text of the Judgment below.