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Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
आयकर अपीलीय अिधकरण ” ए” �ायपीठ पुणेम�। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.732/PUN/2023 िनधा�रण वष� / Assessment Year : 2016-17 C R Jaiswal and K B Jaiswal, The Income Tax Officer, Retail Country Liquor Shop, V Jalgaon. Village Kingaon, Taluka s Yawal – 425503 Maharashtra. PAN: AAEFC 8278 J Appellant / Assessee Respondent / Revenue Assessee by Shri Pramod Shingte – AR Revenue by Shri Ramnath P Murkunde – DR Date of hearing 12/09/2023 Date of pronouncement 14/09/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] under section 250 of the Income Tax Act, 1961 dated 21.04.2023 emanating from assessment order under section 143(3) dated 29.11.2018 for A.Y.2016-17. The grounds of appeal raised by the assessee as under :
ITA No.732/PUN/2023 C.R.Jaiswal and K.B.Jaiswal [A]
“1] On the facts and circumstances of the case and in law , the learned CIT [Appeals] erred in rejecting the appellants claim for cash payments at Rs 4188200 by disallowing the same by applying provisions of section 40A(3). It is requested that the above disallowance be deleted and cash payments be allowed by deleting the disallowance of Rs 4188200. 2] On the facts and circumstances of the case and in law, the Learned CIT [Appeals] erred in initiating penalty proceedings on cash purchases which is totally unjustified because 40A(3) disallowance can only be made when the payments are genuine. In the present case the payments were genuine and supported by ledger abstract duly confirmed by the seller J K Wines which was sent by the seller to the learned AO. Hence it is requested to direct the learned CIT [Appeals] to drop the initiation of penalty proceedings against the appellant Firm. The Seller and purchaser being both Licensee of Maharashtra State Government are agents of the State Government and hence cash payments are covered in the exemption/exception provided under Rule 6DD (b) & (k) of the I T Rules, 1962. 3] On the facts and circumstances of the case and in law, the Learned CIT [Appeal? erred in addition on account of interest on income tax refund of Rs 32174/- as the same is clearly mentioned and offered as income in the Audited Trading , Profit and Lo Account. The learned CIT [Appeals] be directed to delete the addition on interest on I refund of Rs 32174/- 4] On the facts and circumstances of the case and in law, the Learned CIT [Appeals] erred in addition on account of difference in creditors balance, as the same is evidenced by the ledger abstracts of Jalgaon Wine Agencies [beer account] and M/s Sur Liquors etc, therefore the learned AO be directed to delete the addition of Rs 369 made on account of difference in closing balance of creditors. 5] On the facts and circumstances of the case and in law, the Learned CIT [App erred in applying provisions of section 184 (5) and 144 and thus making addition c 118530 and Rs 686797/- otherwise allowable under section 40 (b) of the I T Act, 1961. The learned CIT [Appeals] be directed to allow the deduction on account of interest on partners capital and Salary to Partners as
ITA No.732/PUN/2023 C.R.Jaiswal and K.B.Jaiswal [A]
claimed in the Audited Profit and Loss account by the Appellant and delete the addition of Rs 118530 and Rs 686797/- . Further the learned AO be directed to allow interest claimed on partners capital under section 40(b)(iv) at Rs 118530/ as the partners had credit capital balance and the amount shown in the partners current account is cash kept in safe custody of partner being due to the creditors of the Firm. 6] The Hon’ble CIT [Appeals] has decided the Order exparte and hence it is humbly requested to Set-aside the Order of the CIT [Appeals] and grant us one more opportunity and restore the appeal with CIT [Appeals] so that justice can be prevailed. 7] The appellant craves leave to add, alter, modify or withdraw any ground or grounds of appeal. In view of all these and other reasons, which maybe produced during the process of hearing of appeal, the appeal may please be allowed and justice rendered.”
Findings and Analysis : 2. We have heard both the parties and perused the records. On perusal of the ld.CIT(A)’s order, it is observed that the ld.CIT(A) has dismissed the appeal for non-prosecution. The relevant paragraph 4.5 and 4.6 of the ld.CIT(A)’s order is reproduced as under : “4.5 Under these circumstances, in my considered opinion, appellant is not interested in prosecuting the appeal. As such I hold that this appeal is liable to be dismissed for non-prosecution. In this regard, we place reliance upon following case laws: CIT vs. Multiplan India Ltd. 38 ITD 320 (Del)1. Estate of Late Tukojirao Hokar vs. CWT 223 ITR 840 (M.P.)2. New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P&H)3. CIT vs. B.N. Bhattachargee and Another 118 ITR 461 (SC). 4.6 Therefore, considering the above factual and legal position, the appeal filed by the appellant is dismissed for non-prosecution. As a result, the assessment by the AO is confirmed.”
ITA No.732/PUN/2023 C.R.Jaiswal and K.B.Jaiswal [A]
As per the provisions of the Act, the ld.CIT(A) is not empowered to dismiss the appeal for non-prosecution. The ld.CIT(A) has to decide each ground on merits. The Hon'ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) / [2017] 297 CTR 614 (Bombay) held as under : Quote, “8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of
ITA No.732/PUN/2023 C.R.Jaiswal and K.B.Jaiswal [A]
the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.” Unquote. 3.1 Thus, the Hon’ble Bombay High Court has categorically held that ld.CIT(A) has to decide the appeal on merit and CIT(A) does not have any power to dismiss appeal for non-prosecution.
In the present case, the ld.CIT(A) has failed to follow the decision of the Hon'ble Bombay High Court which is the jurisdictional High Court. The decision of the Hon'ble jurisdictional High Court is binding on all the Lower Authorities including the ld.CIT(A).
In these facts and circumstances of the case, the order of ld.CIT(A) is set-aside to ld.CIT(A) for denovo adjudication. The ld.CIT(A) shall provide proper opportunity of hearing to the assessee. Accordingly, Ground No.6 of the assessee is allowed for statistical purpose.
Ground No.1, 2, 3, 4, 5 and 7 have not been adjudicated as these grounds becomes academic in nature since we have set-
ITA No.732/PUN/2023 C.R.Jaiswal and K.B.Jaiswal [A]
aside for denovo adjudication. Accordingly, Ground No.1, 2, 3, 4, 5 and 7 are dismissed as unadjudicated.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 14th September, 2023.
Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 14th Sep, 2023/ SGR* आदेशक��ितिलिपअ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, “ए” ब�च, पुणे / DR, ITAT, “A” Bench, Pune. गाड�फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.