SAIREDDY BOMMAREDDY,SECUNDERABAD vs. INCOME TAX OFFICE, WARD-2, KARIMNAGAR

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ITA 475/HYD/2025Status: DisposedITAT Hyderabad22 July 2026AY 2013-20146 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT held that the CIT(A) is statutorily obligated to dispose of appeals on merits with reasons, even if the assessee fails to appear. Dismissing for non-prosecution without independent reasoning is not permissible.

What were the facts?

The Assessing Officer initiated reassessment proceedings under section 147 based on information about substantial financial transactions and unfiled returns. The CIT(A) dismissed the assessee's appeal for non-prosecution without adjudicating the grounds.

What were the issues?

Whether the CIT(A) can dismiss an appeal for non-prosecution without adjudicating the grounds on merits. Whether the CIT(A) is obligated to provide reasons for their decision as per statutory provisions.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 69A,Section 271(1)(c),Section 271(1)(b),Section 250(6),Section 251(1)(a),Section 251(1)(h),Section 251(2),Section 246A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SHRI RAVISH SOOD, HON’BLE & SHRI MADHUSUDAN SAWDIA, HON’BLE

For Respondent: Shri K Prasad, SR-AR

PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Center, Delhi (for short, “CIT(A)”), dated 02/02/2024, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 147 r.w.s. 144 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 30/03/2022. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:

1) On the facts and circumstance of the case, issue of Notice U/s 148 is bad in law and without Jurisdiction 2) The learned Commissioner of Income-Tax (appeals) earned in confirming the cash credits into the bank to the tune of Rs. 2,20,57,916/- during the period from April’ 2012 to March’ 2013, treating them as the unexplained money u/s 69A of Income Tax Act’ 1961 4. Additions on account of Salary Rs.6,73,676/- for FY 2012-2013 (AY 2013-2014) 3) The learned Commissioner of Income Tax (appeals) erred in confirming Penalty u/s 271(1)(c), 271(1)(b) of Income Tax Act’ 1961 4) Any other ground that may be urged at the time hearing

2.

Succinctly stated, the AO based on information that the assessee during the subject year had carried out substantial financial transactions/received income, viz., (i) cash deposits aggregating to Rs.2 lakhs or more in his savings bank account: Rs.1,54,67,916/-; (ii) cash deposits with a banking company: Rs.65,90,000/-; and (iii) salary income: Rs.6,73,676/-, but has not filed his return of income for the year under consideration, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act, dated 30/03/2021, was issued to the assessee. However, the assessee failed to comply with the said notice and did not file his return of income. Thereafter, the AO vide his order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 30/03/2022, after making two additions, viz., (i) addition under section 69A of the Act: Rs.2,20,57,916/-; and (ii) addition of salary income: Rs.6,73,676/-, determined the income of the assessee at Rs.2,27,31,592/-.

3.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, as the assessee had failed to participate in the proceedings before the first appellate authority, the CIT(A), holding a conviction that the assessee appellant was not interested in pursuing the appeal, dismissed the appeal on the said count itself.

4.

The assessee, aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

5.

Although the assessee has moved an application seeking an adjournment, but considering the fact that the matter has been adjourned on the last eleven occasions at the request of the Ld. AR, and the appeal had been dismissed by the CIT(A) vide a non-speaking order for want of prosecution; we are not inclined to allow the said adjournment.

6.

Coming to the facts of the case, we find that though the assessee/appellant has assailed the additions made by the AO vide the order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 30/03/2022, based on specific grounds of appeal, the CIT(A), instead of adjudicating the same, had summarily dismissed the appeal for want of prosecution. We further find that the CIT(A), instead of arriving at an independent finding on the specific grounds of appeal, had summarily approved the view taken by the AO by observing that the latter had passed a reasoned and speaking order.

7.

We are unable to persuade ourselves to subscribe to the manner in which the CIT(A) had, without giving any reason, summarily approved the view taken by the AO. In our view, the CIT(A), irrespective of the fact that the assessee appellant had failed to participate in the proceedings before him, ought to have given an independent reasoning for approving the view taken by the AO instead of summarily upholding the assessment for the reason that, as the assessee appellant had failed to participate in the proceedings, the same revealed his disinterest in pursuing the appeal. As per section 250(6) of the Act, the CIT(A) is statutorily obligated to dispose of the appeal in writing, stating the points for determination, and to render a decision on each point that arises for consideration, with reasons in support thereof. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). The Hon’ble High Court in the aforementioned case had observed 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 AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 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. Sec. 251(1)(a) and (h) 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-s. (2) of s. 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 s. 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 w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CITIA) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO 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 s. 251(1)(a) and (b) and Explanation to Sec. 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.” 8. We thus, in terms of our aforesaid observations, set aside the matter to the file of the CIT(A) with a direction to re-decide the appeal on the specific grounds of appeal based on which the impugned assessment order has been assailed before him. Needless to say, the CIT(A) shall, in the course of the set-aside proceedings, afford the assessee a reasonable opportunity of being heard.

9.

In the result, appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

Order pronounced in the open court on 22nd July, 2026. Sd/- Sd/- MADHUSUDAN SAWDIA RAVISH SOOD ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad Dated: 22nd July, 2026. *OKK/SPS Copy to: SAIREDDY BOMMAREDDY, H.NO. 8-5-213/8/2, SAI KRISHNA COLONY, 1 OLD BOWEWNPALLY, SECUNDERABAD-500011, TELANGANA INCOME TAX OFFICE, WARD-2, 2 O/O ITO., WARD-2, Opp BUS STAND LANE, KARIMNAGAR-505001, TELANGANA 3 THE PCIT, HYDERABAD. 4 THE D.R., ITAT, HYDERABAD BENCH 5 GUARD FILE

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