Facts of the Case

The assessee filed a return of income for Assessment Year 2006-07. Subsequently, reassessment proceedings were initiated under Sections 147 and 148, culminating in an assessment under Section 147 read with Section 143(3) determining income at ₹71,48,050 as against the returned income of ₹48,90,050.

Additions included alleged unexplained bank deposits amounting to ₹22,58,000.

The assessee challenged the assessment before the Commissioner of Income Tax (Appeals). However, despite multiple opportunities, the assessee did not appear, and the CIT(A) dismissed the appeal ex-parte in limine without adjudicating the issues on merits.

 Issues Involved

  1. Whether the CIT(A) was justified in dismissing the appeal ex-parte without deciding issues on merits.
  2. Whether such dismissal complies with the requirements of Section 250(6).
  3. Whether the assessment proceedings under Sections 147/148 suffered from procedural defects (including service of notices).

Petitioner’s (Assessee’s) Arguments

  • Notices under Sections 148 and 143(2) were allegedly not served properly.
  • Reasons recorded for reopening were not supplied.
  • Reassessment was initiated despite pendency of return proceedings.
  • Additions for unexplained bank deposits were unjustified.
  • The CIT(A) failed to consider the grounds of appeal and dismissed the case without proper adjudication.

Respondent’s (Revenue’s) Arguments

  • The assessee failed to attend appellate proceedings despite numerous opportunities.
  • Therefore, the CIT(A) decided the appeal on the basis of available material.
  • The assessment order had adequately discussed the issues.

 Court Order / Findings (ITAT)

  • The CIT(A) dismissed the appeal summarily due to non-appearance of the assessee despite multiple opportunities.
  • No adjudication on merits of the grounds raised was undertaken.
  • Section 250(6) mandates that the appellate authority must pass a reasoned and speaking order addressing the issues involved.

Important Clarification by the Tribunal

  • CIT(A) cannot dismiss an appeal merely for non-prosecution.
  • A reasoned order dealing with each ground of appeal is mandatory under Section 250(6).
  • Even in ex-parte situations, issues must be decided on merits.
  • Opportunity of hearing is an essential component of appellate justice.

Link to download the order – https://itat.gov.in/public/files/upload/1654158039-ITA%20No.%20212%20Alld%202017%20Hari%20Shankar%20Mishra.pdf

Disclaimer   

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.