Non-Prosecution Not Grounds to Dismiss Income Tax Appeal: ITAT Quashes Ex‑parte CITA Order

The ITAT has held that mere grant of non‑prosecution does not entitle the Revenue to dismiss an appeal or sustain an ex parte order by the Commissioner of Income Tax (Appeals). The assessee, though not prosecuted under criminal proceedings, was denied opportunity and the appeal was disposed ex parte. The Tribunal observed that exoneration in criminal domain does not override fundamental rights in income tax proceedings: the departmental appeal must be adjudicated on merits unless procedural default is valid. The ITAT quashed the ex parte order passed by the CITA for lack of jurisdiction and procedural irregularity, and directed restoration of the appeal to adjudicate merits. This reinforces that non‑prosecution cannot substitute substantive hearing in tax appeals and that principles of natural justice cannot be bypassed.