CIT(A) is not empowered to dismiss the appeal for non-prosecution

 

ITAT Pune in the case of YORK TRANSPORT EQUIPMENT (INDIA) PRIVATE LIMITED VERSUS ITO, WARD-10 (1) , PUNE,.- ITA No. 125/PUN/2024 Dated.- May 29, 2024 has held that CIT(A) is not empowered to dismiss the appeal for non-prosecution.

Being aggrieved by assessment order, an appeal was filed before the CIT(A), who vide impugned order dismissed the appeal in limine for non-prosecution without rendering any finding on merits.

On Appeal, ITAT observed as under:

1.  The CIT (A) had issued the hearing notices through ITBA portal as mentioned in para 1.5 of his order. Then the CIT(A) had proceeded to dismiss the appeal in limine for non-prosecution.

2.  In our considered opinion, it is not a valid method and manner of service of notice as specified under the provisions of section 282(1) of the Act. Therefore, it is crystal clear that the notices were not served upon the appellant company. To fortify our view, we would like to make a reference to a decision of the Hon’ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship Vs. CIT (Exemptions) (2024) 463 ITR 560 (P&H), wherein the Hon’ble High Court after making reference to provisions of 282(1) held that service of notice through ITBA portal is not valid service and remanded the matter to AO for denovo disposal of case

3.  Furthermore, we find the ld. CIT(A) without discussing anything on merits of the controversy of the addition made on account of Transfer Pricing adjustment, simply dismissed the appeal in limine, which is contrary to settled position of law.

4.  It is a trite law that the CIT(A) should have dealt with the merits of the issue in appeal, even in the case of an ex-parte order.

5.  In this regard, reference is being made to a decision of the Hon’ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay) [2017] 297 CTR 614 (Bombay) wherein it was held that CIT(A) is not empowered to dismiss the appeal for non-prosecution.

6.6.  In the light of above discussion, we deem it appropriate to remit the matter to the file of CIT(A) for de novo disposal of the issue in accordance with law.

Ordered accordingly.

Cases relied upon
BOMBAY HIGH COURT-VERSUS PREMKUMAR ARJUNDAS LUTHRA (HUF) CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT (A) is coterminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee

The copy of the order is as under:

1716982954-ITA No. 125 of 2024 York Transport Equipment India Pvt. Ltd