First Appellate Authority cannot dismiss appeal without due application of mind

The Income Tax Appellate Tribunal (ITAT), in the case of Corporate International Financial Service ltd. Vs. Income Tax Officer held that the first appellate authority cannot dismiss the assessee’s appeal without deciding the appeal on merits through order in writing, stating the points of determination in the appeal, the decision thereon, and the reason for the decision.

In the present case, the assessee filed an appeal before the CIT (A)against the order passed by the Ld. Income Tax Officer(ITO) on grounds of addition of Rs. 22,23,00,000 u/s 68 of Income Tax Act (Act). The CIT (A) dismissed the appeal filed by the assessee on account of noncompliance by the assessee with notices issued by the office of Ld.CIT (A). The Ld. CIT (A) stated that the non-appearance by the assessee gave an impression that the assessee was not interested in presenting the appeal. The Ld. CIT (A) did not decide the appeal on merits and dismissed the appeal in limine. Aggrieved by the order passed by the CIT (A), the assessee filed appeal before the ITAT.

ITAT in its order stated that as per provision of Section 250(6) of the Act, Ld. CIT(A) was obliged to dispose of the appeal in writing after stating the points for determination and to then pass an order on “each of the points which arose for consideration”; and the Ld. CIT(A) was further obliged to state the reasons for her decision on each such point that arose for determination. Thus, the Ld. CIT(A) was duty-bound to dispose of the appeal on merits. Also, as per provisions of section 251(1)(a), Ld.CIT (A)  was required to ensure due application of mind, instead of dismissing the appeal in limine. In light of the above arguments, ITAT held that the Ld. CIT(A) erred in dismissing the appeal of the Assessee in limine for non-prosecution of appeal by the assessee and set aside the order passed by Ld. CIT (A).

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