Facts of the Case

The assessee, Chanchal Kumar, did not file a return of income for Assessment Year 2016-17. The case was reopened under Section 147 of the Income-tax Act and the Assessing Officer completed the assessment under Section 143 read with Section 147 by making an addition of ₹81,66,750 on account of long-term capital gains. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). However, the appeal was dismissed for non-prosecution as the assessee failed to appear or effectively represent the case. The assessee thereafter filed an appeal before the Tribunal with a delay of 590 days along with an application for condonation of delay.

Issues Involved

Whether the delay of 590 days in filing the appeal deserved condonation, whether dismissal of the appeal by the CIT(A) solely on the ground of non-prosecution without adjudication on merits was justified, and whether the matter required restoration for fresh consideration in the interest of justice.

Petitioner’s Arguments

The assessee submitted that there existed reasonable cause for the delay in filing the appeal and sought condonation of delay. It was further contended that the CIT(A) passed the order ex parte without providing a proper opportunity of being heard, thereby depriving the assessee of an opportunity to place relevant evidence on record. It was argued that in the interest of justice, the matter should be restored for adjudication on merits.

Respondent’s Arguments

The Revenue supported the orders passed by the lower authorities and opposed interference with the impugned order.

Court Order / Findings

The ITAT Patna condoned the delay of 590 days after being satisfied that reasonable cause prevented the assessee from filing the appeal within the prescribed time. On merits, the Tribunal observed that the appeal before the CIT(A) was dismissed solely for non-appearance without adjudication on merits, resulting in denial of reasonable opportunity to the assessee. Considering the principles of natural justice and fair play, the Tribunal held that the matter deserved to be restored to the file of the CIT(A) for fresh adjudication after providing due and reasonable opportunity of hearing to the assessee.

Important Clarification

The Tribunal clarified that appellate authorities are expected to adjudicate matters on merits wherever possible and that dismissal of appeals solely on the ground of non-prosecution, without examination of substantive issues, is not in consonance with principles of natural justice.

Final Outcome

The appeal filed by the assessee was allowed for statistical purposes, the ex parte order passed by the CIT(A) was set aside, the delay of 590 days was condoned, and the matter was restored to the file of the CIT(A) for fresh adjudication on merits in accordance with law after providing due opportunity of hearing to the assessee.

 

Link to download order https://www.mytaxexpert.co.in/uploads/1769148551_CHANCHALKUMARPATNA.pdf 

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