AVA BUILDCON, RAIPUR,RAIPUR vs. DCIT, CENTRAL CIRLE-2, RAIPUR, RAIPUR

Vide seven grounds of appeal, the assessee has raised not only juri ictional issue but also the taxability of sums aggregating to Rs.85,73,181/- received during the relevant period from four persons; namely, GSR Tradefin Pvt. Ltd., Rain Bow Finance (India) Ltd., Jeevan Commodities Pvt. Ltd. and Sri Karani Exports Pvt. Ltd. under section 68 of the Act and the disallowance of Rs.1,21,348/- made out of various expenses. Vide legal grounds, the assessee has challenged the validity of assessment by raising the issue of non-issuance of notice under section 143(2) of the Act within the statutory time by the juri ictional Assessing Officer (‘AO’). Further, the assessee has challenged the validity of assessment by raising the issue transfer of assessee’s case from one AO; i.e. ITO, Ward-1(1) Raipur to another AO; i.e. ACIT, Circle-1(1), Raipur without any order under section 127 of the Act.

The relevant facts giving rise to this appeal are that the assessee is a civil contractor. It filed its Income Tax Return (‘ITR’) of the relevant year on 31.10.2017 declaring income of Rs.45,46,700/-. During the course of assessment proceedings, the Ld. AO noticed that the assessee had received unsecured loans aggregating to Rs.85,73,181/- during the relevant period from four persons; namely, GSR Tradefin Pvt. Ltd., Rain Bow Finance (India) Ltd., Jeevan Commodities Pvt. Ltd. and Sri Karani Exports Pvt. Ltd.; therefore, he show-caused the assesse to explain these loans in accordance with the provisions of section 68 of the Act. The explanation submitted by the assessee was not found satisfactory by the Ld. AO, therefore, he taxed the said loans aggregating to Rs.85,73,181/- under section 68 of the Act. Further, the Ld. AO also made disallowance of Rs.1,35,840/- out of travel expenses, labour expenses, food expenses, etc., due to non-verifiability of such expenses.

Before us, the assessee had filed adjournment application, which was not entertained by us. Therefore, we heard Shri Ch. Rajeswara Reddy, Ld. DR who argued the case vehemently and prayed for dismissal of the appeal. The Ld. Sr. DR drew our attention to the AO’s report submitted vide his office letter on 18.05.2026 wherein it was submitted that not only the ITO, Ward-1(1) Raipur but also the ACIT, Circle-1(1), Raipur had issue notice under section 143(2) of the Act within the prescribed statutory time. Further, it was submitted that the ACIT, Circle-1(1), Raipur had valid juri iction over the case as per the work allocation order of the CCIT, Raipur; therefore, the question of passing any order under section 127 of the Act did not arise. The Ld. 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. 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.