ITAT warns CIT(A) of penalty for not-passing speaking order on merit due to non appearance or non prosecution
ABCAUS Case Law Citation:
ABCAUS 3240 (2020) (01) ITAT
In the instant case, an appeal was filed by the assessee against the order of the Commissioner of Income Tax [Appeals].
It was submitted that the CIT(A) dismissed the appeal of the assessee for non-prosecution without discussing anything on merit despite the law that CIT(A) was expected to dispose the appeal on merit by a speaking order.
Since, the CIT(A) had not applied his mind, it was submitted that the matter may be remitted back to the CIT(A) for re-consideration.
The Tribunal observed that it was not in dispute that the CIT(A) had not discussed the appeal of the assessee on merit. He simply dismissed the appeal on the ground that the assessee sought for adjournment on three occasions.
The Tribunal pointed out that the power of the CIT(A) to dispose the appeal flows from Section 250 & 251 of the Income Tax Act, 1961 (the Act). Section 250(4) of the Act, empowers the CIT(A) to make further enquiry as he thinks fit. Section 250(1) of the Act, empowers the CIT(A) to enhance the assessment.
The Tribunal stated that it is obvious that the power of the CIT(A) is co-terminus with that of the Assessing Officer. In other words, the power to enhance the assessment is an onerous responsibility conferred on the CIT(A) to safeguard the interest of the Revenue.
According to the Tribunal, when the responsibility was conferred on the CIT(A) by the Parliament, the CIT(A) cannot dismiss the appeal for non-appearance of the assessee or the assessee sought for adjournment. Irrespective of the fact whether the assessee appeared before him or not, the CIT(A) is expected to call for the records of the Assessing Officer and re-appreciate the material available on record and pass a speaking order considering all the grounds raised by the assessee.
The Tribunal opined that since in the instant case, the above exercise was not done and therefore, the matter needed to be re-considered by the Assessing Officer.
Importantly, the Tribunal was informed that the CBDT had instructed all the CIT(A) to dispose of minimum 50 appeals every month. The Tribunal opined that it appeared as if in order to reach the target fixed by the CBDT, all the CIT(A) are dismissing the appeals of the assessee without considering the same on merit.
The Tribunal stated that this kind of attitude cannot be allowed to continue. Time and again the Tribunal had pointed out that the CIT(A) has to pass order on merit and he has no jurisdiction to dismiss the appeal for non-appearance or for non prosecution. However, irrespective of this, the CIT(A) continues to dismiss the appeals ex-parte without considering anything on merit.
The Tribunal stated that if this kind of attitude continued, the tax payer will lose confidence on the administration. The Tribunal expressed hope that the concerned Principal Chief Commissioner of Income Tax and CBDT shall take remedial measure immediately so that this kind of things might not happen in further.
ITAT warns CIT(A) of penalty for not-passing speaking order on merit
Even though the Tribunal opined that the instant case was a fit case for levying penalty for not-passing speaking order, it did not do so in exercise of its discretion hoping that the CIT(A) may not continue this practice in future.
With the above observation, the order of the CIT(A) was set aside and the entire issue was remitted back to the file of CIT(A).
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