ITAT lacks power to dismiss appeal without adverting to merits -Allahabad High Court
In a recent judgment, the Hon’ble Allahabad High Court has reiterated that currently ITAT does not have power to dismiss appeal without adverting to the merits of the appeal even if the appellant is absent.
ABCAUS Case Law Citation:
ABCAUS 1164 (2017) (03) HC
Question for determination:
The High Court had admitted the appeal on the following question of law:
“Whether on the facts and circumstances of the case the ITAT Lucknow was correct not to decide the case of the appellant on merits as per Rule 24 of Income Tax (Appellate Tribunal) Rules, 1963, even if the appellant or his authorized representatives was absent on the date of hearing?”
Brief Facts of the Case:
It was contended that in the appeal before the Tribunal the assessee had raised six specific grounds but none of them were examined or adjudicated by the Tribunal.
The reliance was placed on the Rule 24 of the Income Tax (Appellate Tribunal) Rules 1963.
Observations :
The Hon’ble High Court observed that this issue had been considered by the Court in its an earlier judgment. In the said earlier case, the ITAT had dismissed the appeal holding as under:
“The laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well known dictum “VIGILANTIBUS NON DORMENTIBUS, JUR SUBVENIUNT”. Considering the facts and keeping in mind the provisions of Rule 19(2) of the Income Tax Appellate Tribunal Rules as were considered in 38 ITD 320 (Delhi) in the case of CIT vs. CWT. 223 ITR (MP), we treat the appeal as not admitted and dismiss in limine.”
In the said case, the Hon’ble High Court had set aside the order of the Tribunal and directed ITAT to decide the matter afresh on merit. The Court had observed as under:
“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.”
Following its earlier judgment, The Hon’ble High Court answered the question raised in favour of the assessee and against the department.
Held:
The appeal was allowed and restored before the Tribunal to proceed and decide the appeal on merits in accordance with law.
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