M/S. NARESH BAZZAR, BILASPUR,BILASPUR vs. ACIT, BILASPUR, BILASPUR

Vide sole ground of appeal, the assessee has challenged the addition of Rs.1,22,03,731/- made on account of excess stock found during the course of

The assessee filed its Income Tax Return (‘ITR’) of the relevant year on 31.03.2021 declaring income of Rs.37,04,090/-. The case was picked up for scrutiny. The excess stock valued to Rs.1,22,03,731/- found during the course of survey operation under section 133A of the Act was not offered for tax in the ITR. Therefore, the consequential assessment of the relevant year was completed under section 143(3) of the Act by making addition of Rs.1,22,03,731/-. From the perusal of assessment record, it is evident that the assesse has retracted the surrendered income on 09.10.2021 (approximately after 2 years from the date of survey). However, the Ld. AO did not accept the retraction on the reasoning that it was too late and the same was not found duly corroborated by any evidence. Therefore, the Ld. AO made addition of Rs.1,22,03,731/- as under: “4.3 The valuation of excess stocks found during the survey proceedings were done in the presence of employees of the shop and also the partner Shri Ramesh Kumar Khubwani has acknowledged the findings. Further, the partner of the Firm Shri Ramesh Kumar Khubwani has clearly stated in the

Before us, Shri Sunil Kumar Agrawal, CA, Ld. Authorized Representative (‘AR’) of the assessee submitted that the Ld. CIT(A) had decided the appeal ex- parte due to non-prosecution. Further, he drew our attention to the fact that the Ld. CIT(A) had not decided the appeal on merit with detailed justification for agreeing with the Ld. AO’s finding. Non-compliance on the part of the assessee was the sole reason for dismissal of appeal, the Ld. Counsel submitted. He prayed for remanding the case back to the file of Ld. CIT(A) for fresh adjudication.

Shri Piyush Tripathi, Ld. Sr. DR, argued the case vehemently and prayed for dismissal of the appeal. The Ld. Sr. DR, drawing our attention to para 3.1 of the order of CIT(A), submitted that the reasonable opportunities of being heard had been provided to the appellant assessee by the CIT(A). However, the appellant assessee did not ensure any compliance before him for the reasons best known to it. Thus, the Ld. CIT(A) had no option to dismiss the appeal. He prayed for dismissal of the appeal. On our specific query, he admitted for remanding the case back to the file of the Ld. CIT(A) for afresh/denovo adjudication.

We have heard both parties and have perused the material available on the record. We have taken note of the fact that the Ld. CIT(A) has not decided the appeal after hearing the assessee and discussing the issues in detail and his reasons for agreeing with the assessment order though he/she, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen for his consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues arisen from the assessment order, whether or not such issues have been raised by the assessee before him/her. On cumulative consideration of the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, the CIT(A) is not empowered to dismiss the appeal for non-prosecution of appeal and is obliged to dispose of the appeal on merit. Reliance is placed on the decision of the Hon'ble Bombay High Court in case of Prem Kumar Arjun Das Luthra HUF, (2017) 291 CTR 614 (Bom). The case laws relied upon by the Ld. CIT(A) are of no relevance as those appeals are beyond the purview of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act.

We have taken note of the fact that the assessee has not made any compliance before the Ld. CIT(A). Even in such facts and circumstances, the Ld. CIT(A) cannot dispose the appeal ex-parte due to non-prosecution as he/she has no option except to decide the case on merit with detailed reasoning, which has not

In the result, this appeal of assessee is allowed for statistical purposes.