DHARMENDRA VAISHNAV,JODHPUR vs. ITO, WARD, PHALODI

The captioned appeal has been filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 27.09.2022 arising out of assessment order passed ex-parte qua the assessee by the AO in respect of Assessment Year: 2017-18.

Dharmendra Vaishnav v. ITO 2. At the time of hearing, the ld. counsel for the appellant has submitted that the ld. CIT(A) has dismissed the appeal of the assessee by observing that ground 2 to 4 of appeal were interlinked and that assessee did not respond to the notices issued for hearing. He contended that the ld. CIT(A) has not addressed ground no. 3 raised by the appellant before the ld. CIT(A), that the ld. AO was not justified in arbitrary observing the commission income at 1.5% based on assumption and surmises. The ld. counsel argued that the findings of the Assessing Officer are factually incorrect and since the ld. CIT(A) has not addressed the issue on merits of the case and merely that he has dismissed the appeal vide para 6, by observing that despite three opportunities were provided to the appellant over a span of nearly nineteen months, no response has been received from the appellant to any of the hearing notices served on it. Thus, the appeal filed by the appellant is liable to be dismissed for non-prosecution.

The ld. AR further submitted that the addition was made by the AO on account of commission received on mobile recharge by way of estimating 1.5% without rebutting the submissions of the assessee. Further, the ground is not addressed by the ld. CIT(A), and therefore, the matter may be remanded back to the file of the ld. CIT(A) to adjudicate the ground 3 after granting opportunity of being heard, in view of the principles of natural justice. The counsel placed reliance on the decision of Delhi ITAT in the case of Corporate International Financial Service Ltd. v. ITO in (APB pg. 9 to 17) where it was observed that after considering the statutory provisions of section 246, 246A, 248, 250 and 251 of the Income Tax Act, 1961 and judicial pronouncements in the case of CIT v. Kanpur Coal Syndicate 53 ITR 225 (SC), CIT v. Rai Bahadur Hardutroy Motilal Chamaria 66 ITR 443 (SC), CIT vs. B.N. Bhattachargee 118 ITR 461 (SC) and CIT vs. Premkumar Arjundas Luthra (HUF) [2016] 240 taxman 133 held that:

"(C.2.1) In view of the foregoing, we hold that the Ld. CIT(A) erred in dismissing the appeal of the Assessee in limine for non-prosecution of appeal by assessee. We set aside the impugned order of the Ld. CIT(A) and we direct the Ld. CIT(A) to pass denovo order as per law, in accordance with Sections 250 and 251 of I. T. Act."

"7. The appealed has been examined and is adjudicated on merits."

3. But while adjudicating ground of appeal raised in Form 35 it was erroneously held that "Grounds of appeal 2 to 4 being interlinked are taken up together for adjudication. Ground 2 and 4 raised through Form No 35 were interlinked but ground 3

Dharmendra Vaishnav v. ITO was not at all interlinked with ground number 2 and 4. Therefore Ld. CIT(A) erred in dismissing ground number 3 without any specific finding.

Dharmendra Vaishnav v. ITO is factually correct as per record. Accordingly, the issued raised in ground no. 3 in appeal Form 35, before the ld. CIT(A) is restored back to the ld. CIT(A) to adjudicate the same on merits after considering the written submissions of the appellant assessee and granting adequate opportunity of being heard. In view of that matter, we hold that the appeal has been decided ex-parte qua the assessee per se against the principles of natural justice. The ld. CIT(A) ought to have granted adequate opportunity of being heard to the appellant and gone through the written submissions before rejecting the appeal in limine for non prosecution. We, therefore, consider it deem fit to remanded back the matter to the file of the ld. CIT(A) to adjudicate the appeal denovo as per law. Thus, the matter is restored back to the file of the ld. CIT(A).

Order pronounced in the open court on 07.12.2023