GITA CHANDRASEKARAN,CHENNAI vs. ITO, NCW-15(1), CHENNAI

At the outset, the ld.AR for the assessee stated that the ld.CIT(A) has wrongly dismissed the appeal filed by the assessee, as withdrawn by passing an order dated 26.12.2025. However, during the appellate proceedings, the assessee has clearly stated in the letter filed before the ld.CIT(A) dated 04.12.2025 that the ground No.5 relating to interest u/s.234A, B and C, which was wrongly levied by the AO was withdrawn as the AO had rectified the mistake u/s.154 of the Act after filing the present appeal. However, the ld.CIT(A) has erroneously dismissed the appeal stating that the appeal had been withdrawn by the assessee in the said letter. Therefore, the ld.AR prayed for remitting the appeal back to the files of the ld.CIT(A) to adjudicate the ground Nos.1 to 4 of the assessee in accordance with law.

Per contra, the ld.DR fairly agreed for the prayer of the ld.AR.

We have heard the rival submissions and carefully perused the material available on record, including the impugned order passed by the ld. CIT(A) and the letter dated 04.12.2025 filed by the assessee during the course of the appellate proceedings. The short controversy before us is whether the ld. CIT(A) was justified in treating the entire appeal as withdrawn on the basis of the aforesaid letter. On a careful perusal of the letter dated 04.12.2025, we find that the assessee had specifically communicated to the ld. CIT(A) that Ground No.5, relating to levy/computation of interest under sections 234A, 234B and 234C of the Act, was being withdrawn, since the grievance raised therein had subsequently been rectified by the AO by passing an order u/s.154 of the Act. Thus, the withdrawal communicated by the assessee was expressly confined to Ground No.5 and did not extend to Ground Nos.1 to 4 raised in the appeal.

However, while passing the impugned order dated 26.12.2025, the ld.CIT(A) appears to have proceeded on the premise that the assessee intended to withdraw the appeal in its entirety and, accordingly, dismissed the appeal as withdrawn. In our considered view, such conclusion is not borne out

In the facts and circumstances of the present case, we are therefore of the considered view that the impugned order of the ld.CIT(A), insofar as it treats the entire appeal as withdrawn, cannot be sustained. Since Ground Nos.1 to 4 have not been examined or adjudicated on merits by the first appellate authority, we consider it appropriate to restore the matter to the file of the ld.CIT(A) for adjudication of those grounds. Accordingly, we set aside the impugned order of the ld.CIT(A) and restore the appeal to his file only to the extent of Ground Nos.1 to 4 raised by the assessee in the original memorandum of appeal, with a direction to adjudicate the same afresh on merits and in accordance with law, after affording reasonable opportunity of being heard to the assessee. We make it clear that Ground No.5 shall be treated as withdrawn, as expressly stated by the assessee in its letter dated 04.12.2025, and no adjudication is called for in respect thereof. We have not expressed any opinion on the merits of Ground Nos.1 to 4, and all the contentions of both sides in relation thereto are left open for consideration by the ld.CIT(A).

In the result, the appeal filed by the assessee is allowed for statistical purposes.