· The petitioner had challenged the order passed by ITAT dismissing the appeal on the ground of default as none had appeared on behalf of the assessee, nor any adjournment application was filed on their behalf.
· The High Court observed that section 254(1) of the Act provides that the ITAT, after giving both the parties an opportunity of being heard, should pass such orders as it deems fit.
· The High Court further observed that Rule 24 and Rule 25 of the Income Tax (Appellate Tribunal) Rules, 1963 cast an obligation on the Tribunal to dispose of an appeal on merits, irrespective of whether the appellant appears before it or not.
· Thus, the High Court concluded that the impugned order could not have been sustained and therefore, the same was to be set aside.
· The ITAT was directed to consider the matter on merits and take a fresh decision in accordance with law.
For further reading, refer the attachment.