CIT(A) Obligated to Dispose Off Appeal on Merits, Cannot Dismiss on Non-Prosecution of Assessee: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Visakhapatnam Bench, has held that the Commissioner of Income Tax (Appeals) [CIT(A)] is under a statutory obligation to dispose of appeals on merits and cannot summarily dismiss them for non-prosecution.

The assessee-appellant, Boppana Ashok Kumar challenged an addition of ₹28.44 lakh made by the Assessing Officer (AO) by recharacterizing his declared agricultural income as “income from other sources.” When the assessee failed to appear or file written submissions despite multiple notices, the CIT(A), NFAC, Delhi, dismissed the appeal in limine citing non-prosecution.

On further appeal, the ITAT noted that while the assessee did not cooperate in the appellate proceedings, the CIT(A) could not simply dismiss the case without adjudication.

The bench of Ravish Sood (JM) and S. Balakrishnan (AM), relying on the provisions of Sections 250 and 251 of the Income Tax Act and the Bombay High Court ruling in CIT v. Premkumar Arjundas Luthra (HUF), stated that once an appeal is filed, the CIT(A) must examine the assessment order on merits.

The law does not empower the CIT(A) to dismiss an appeal for non-prosecution, and he is required to state points for determination, conduct inquiry if necessary, and provide a reasoned order.

Accordingly, the ITAT set aside the CIT(A)’s order and remitted the matter back for fresh adjudication on merits, with a direction to provide the assessee a reasonable opportunity of being heard. The appeal was thus allowed for statistical purposes.

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