The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that the Commissioner of Income Tax (Appeals) shall discuss the merits of the case while passing an ex-parte order.
Facts of the Case:
The assessee did not file the return of income for Assessment Year 2009-10. Return declaring total income amounting to Rs. 24,600/- was filed by the assessee on 19/09/2016 in response to notice u/s 148 of the Income Tax Act, 1961.
The assessment was completed by making an addition of Rs. 12,00,000/- in respect of unexplained deposits.
Interpretation of law:
The first appeal filed before the Commissioner of Income Tax (Appeals) was dismissed for non-prosecution. Before the Tribunal, the assessee held that the CIT(A) has passed ex-parte order and no notice has been received by the assessee.
Therefore, the assessee requested that the matter may be remanded back to the file of the CIT(A) to decide the issues contested before the CIT(A) on merit.
While concluding the second appeal, the Tribunal held that “We have heard both the parties and perused the material available on record. It is pertinent to note that the CIT(A) has passed ex-parte order and dismissed the appeal for nonprosecution.
The CIT(A) has not at all discussed the merit of the case. It will be appropriate to remand back the matter to the file of the CIT(A) for fresh adjudication on merit. Needless to say, the assessee is given the opportunity of hearing by following principles of natural justice. Thus, the appeal of the assessee is partly allowed for statistical purposes.”