Can AT dismiss an appeal, solely on ground that assessee not appeared on the appointed date of hearing?

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Issue: Can the Appellate Tribunal dismiss an appeal, without deciding the case  on  its  merits, solely on the ground that the assessee had not appeared on the appointed date of hearing?

Case: Smt. Ritha Sabapathy v. DCIT [2019] (Madras High Court)

Facts of the case: The assessee filed an appeal under section 260A before the  High  Court  against the order of the Appellate Tribunal dismissing the appeal due to non-appearance of the assessee on the appointed date of hearing.

Relevant provision of the Income-tax Act, 1961: Section 254 empowers the Tribunal to pass  such orders “as it thinks fit” after giving both the parties an opportunity of being heard. Rule 24 of  the Income-tax (Appellate Tribunal) Rules, 1963 provides for hearing of appeal ex parte in case of the appellant’s failure to appear in person or through an authorised  representative  when  the appeal is fixed for hearing. In such a case, the Tribunal may dispose of the appeal on merits after hearing the respondent.

Court’s Observations: The High Court noted the provisions of section 254, Rule 24 of the Income-tax (Appellate Tribunal) Rules, 1963 and decisions of the Apex Court on the said issue. Accordingly, the High Court opined that even if the assessee could not appear, the Tribunal could have decided the appeal only on merits, ex parte, after hearing the Revenue’s contentions. It reiterates that the fact finding Appellate Tribunal should not shirk its responsibility to decide a case on its merits. Cryptic orders, not touching the merits of the case, would not give rise to any substantial question of law for consideration by the High Court under  section 260A.  The  assessee’s valuable right of getting the issues decided on merits by the final fact finding body, viz., the Tribunal cannot be given short shrift in this manner. A legal and binding  responsibility, therefore, lies upon the Tribunal to decide the appeal on merits, irrespective of the appearance or otherwise of the assessee or his counsel before it.

High Court’s Decision: In view of the decided case laws and the clear provisions of Rule 24, the High Court set aside the impugned order of the Tribunal dismissing the assessee’s appeal due to non-appearance and directed it to decide the appeal on merits afresh in accordance with law.

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