SANJAY JAIN,ALTO PORVORIM - GOA vs. INCOME TAX OFFICER, CIRCLE 1(1), PANAJI, PANAJI-GOA

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ITA 448/PAN/2025Status: DisposedITAT Panaji28 July 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A)/NFAC is obliged to dispose of appeals on merits and does not have the power to dismiss an appeal for non-prosecution, citing a Bombay High Court judgment. Therefore, the appeal was restored to the CIT(A) for adjudication.

What were the facts?

The assessee, an individual, did not file an income tax return for AY 2017-18. Based on credit card payments, the AO reopened the assessment, making additions for unexplained expenses and cash credit. The assessee's appeal before the CIT(A) was dismissed for non-prosecution.

What were the issues?

Whether the CIT(A)/NFAC can dismiss an appeal for non-prosecution, and whether the assessee should be granted another opportunity to present their case on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69C,Section 69A,Section 143(2),Section 44AD,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI BENCH, ‘DB’ PANAJI

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Neeraj Mangla (virtual
For Respondent: Smt. Rijula Uniyal (virtual)
Hearing: 10.06.2026Pronounced: 28.07.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 22.09.2025 framed by National Faceless Appeal Centre, Delhi arising out of Assessment Order dated 01.03.2025 passed u/s.147 r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Tersely stated, the facts of the case are that the assessee is an individual and has not filed the return of income for the year under consideration. Based on the information available on the insight portal, ld. Assessing Officer came to know that assessee made payment of credit card bill to the tune of Rs.43,15,160/- and has not filed the return of income and therefore there was reason to believe that income escaped assessment. Case of the assessee reopened and statutory notices u/s.148/148A(b) of the Act served upon the assessee and in response to which the assessee made compliance on 23.02.2024, 08.03.2024, 09.03.2024, 15.03.2024 and 21.03.2024. On due consideration of the assessee’s submissions, ld. Assessing Officer concluded the assessment making addition of Rs.47,30,955/- towards miscellaneous unexplained expenses u/s.69C of the Act and also addition of Rs.1,42,000/- towards variation in cash credit u/s.69A of the Act.

3.

Aggrieved assessee carried the matter before ld.CIT(A) but then failed to make any compliance in response to the notices issued by ld.CIT(A) resulting to dismissal of assessee’s appeal for non-prosecution. Now the assessee has approached this Tribunal assailing the impugned order.

4.

We have heard the rival submissions and perused the record placed before us. It is an admitted fact that the assessee has submitted details before the Assessing Officer but however failed to make any compliance before ld.CIT(A) in support of its grounds of appeal. On perusal of the impugned order, we find that assessee raised certain legal issues challenging the validity of assessment proceedings and serving of notice u/s.143(2) of the Act. It is also claimed that the turnover of the assessee is less than Rs.2.00 crore therefore the assessee is covered u/s.44AD of the Act. However, in absence of any participation from the side of assesseee ld.

CIT(A) dismissed the appeal for non-prosecution, merely confirming the action of the Assessing Officer.

5.

Before us, ld. Counsel for the assessee submitted that due to unavoidable circumstances the assessee could not make any compliance. Given an opportunity, the assessee is in a position to substantiate the case with all the supporting documents. A prayer is made to restore the issues raised in the instant appeal to the file of ld.CIT(A) as there was no adjudication on merits of the case. On the other hand, ld. DR relied on the order of CIT(A).

6.

In this regard, reference is being made to the judgment of Hon’ble Bombay High Court in the case of Pr.CIT (Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) wherein the Hon’ble Court held that ld.CIT(A)/NFAC is obliged to dispose of the appeal on merits and ld.CIT(A)/NFAC does not have any power to dismiss appeal for non-prosecution. Relevant observation of the Hon’ble High Court reads as under :

“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. Infact the CIT(A) is obliged to dispose of the appeal on merits. Infact 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 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.”

7.

Considering the entire factual matrix and the prayer made by ld. Counsel for the assessee, we in the larger interest of justice deem it appropriate to afford one more opportunity to the assessee. In view thereof, without dwelling into merits of the case, the issues raised in the instant appeal are restored to the file of ld.CIT(A)/ NFAC for necessary adjudication. Needless to mention that ld.CIT(A/NFAC) in the set aside proceedings shall afford reasonable opportunity to the assessee and pass a speaking order as contemplated u/s.250(6) of the Act in light of the decision of Hon’ble Panaji/Pune; दिन ांक / Dated : 28th July, 2026. Satish

Satish Kumar Madishetty आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, Panaji 4. ‘DB’ Bench / DR, ITAT, Panaji ‘DB’ Bench ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,

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