Powers of CIT(A) — Rule 24 of Appellate Tribunal Rules, 1963 — Whether CIT(A) can dismiss appeal for want of prosecution by assessee — Held, No. Whether CIT(A) is bound to dispose of appeal on merits, even when there is default of non-appearance — Held, Y

British Pharmaceutical Laboratories v. ACIT

The assessee filed a return of income declaring a loss of
Rs.2,19,69,182. The Assessing Officer passed an order u/s.143(3) of the Act
assessing the total income of the assessee at Rs.19,75,603. Aggrieved, the
assessee preferred an appeal to the CIT(A), but failed to attend the
proceedings before the CIT(A). The CIT(A) did not record decision on merits on
the ground of assessee’s failure to attend the proceedings and by taking a
clue from the decision of the Delhi Tribunal in the case of Multiplan (India)
Ltd., he dismissed the appeal. Aggrieved, the assessee preferred an appeal to
the Tribunal.

The Tribunal noted that under Rule 24 of the Income Tax
Appellate Tribunal Rules, 1963 the Tribunal has the power to dismiss an appeal
for want of prosecution and it is also empowered to recall that order, if
satisfied about the existence of reasonable cause subsequently shown by the
appellant. The Tribunal held that since the CIT(A) does not have such a power
under the Income-tax Act, 1961, he is bound to dispose of the grounds of
appeal on merits, even when there is a default of non-appearance by the
appellant. Since the CIT(A) had not recorded decision on merits, the Tribunal
set aside his order and restored the appeal to the file of the CIT(A) for
fresh disposal in accordance with law, after giving reasonable opportunity of
being heard to the assessee.