LAXMAN PRASAD BHAGAT,BILASPUR vs. ITO 2(1)- BILASPUR, BILASPUR

The assessee has raised following grounds of appeal:

The relevant facts giving rise to this appeal are that the assessee has not filed his Income Tax Return (‘ITR’) of the relevant year though his 26AS showed substantial financial transactions running into Crores as detailed in the assessment order. Therefore, the Ld. Assessing Officer (‘AO’) issued the notice under section 148 of the Act. In response, the assessee filed his ITR declaring income of Rs.9,30,470/-. As per the ITR filed in response to the notice under section 148 of the Act, the Ld. AO noted that the assessee had claimed various expenses against the contract receipts of Rs.4,10,55724/-. Therefore, the Ld. AO show-caused the assessee to justify the claim of labour expenses of Rs.3,85,92,380/-, rent of Rs.1,44,000/- and salary of Rs.7,15,150/-. However, the assessee did not ensure the compliance thereof during the assessment proceedings. Therefore, the Ld. AO disallowed these expenses aggregating to Rs.3,94,,51,530/- as the assessee failed to offer any explanation during the assessment proceedings. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal due to non-prosecution. It is evident that the Ld. CIT(A), vide paragraph 2 of the impugned order, had provided five opportunities of being heard to the assesses, but in vain. Therefore, the Ld. CIT(A) dismissed the appeal.

Before us, the assessee had filed adjournment application, which was not acceded to. Therefore, we heard Shri Saad Kidwai, Ld. CIT-DR who argued the case vehemently and prayed for dismissal of the appeal. The Ld. CIT-DR, drawing our attention to various paras of orders of Authorities below, submitted that the reasonable opportunities of being heard had been provided to the appellant assessee by the Authorities below. However, the appellant assessee did not ensure any compliance before the Authority below to avoid investigations. Hence, he prayed for dismissal of the appeal. On our specific query, he reluctantly admitted for remanding the case back to the file of the Ld. CIT(A) for afresh/denovo adjudication.

We have heard the Ld. CIT-DR 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.).

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 been done in this case. Keeping in view the facts of the case, we, without offering any comment on merit of the case, find the impugned order deem fit to set aside and remand the matter back to the file of the Ld. CIT(A) for deciding the case afresh/denovo, in accordance with the law, after affording reasonable opportunity of being heard to the assessee. We, therefore, order accordingly. Needless to say that the appellant assessee has to cooperate in remitted appellate proceedings.

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

The Pr. CIT, Raipur (C.G.) िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, 4. रायपुर/ DR, ITAT, Raipur 5. गाड" फाईल / Guard file.