KARTHI SHANMUGAM,TIRUCHENGODU vs. INCOME-TAX OFFICER, WARD 1, TIRUCHENGODU, TIRUCHENGODU

Briefly stated facts of the case are that the appellant is an Individual. No regular return of income was filed under the provisions of section 139(1) of the Act for the Assessment Year 2017-18. Based on the information that the appellant had made cash deposits of Rs.1,01,82,000/- in the bank account maintained with ICICI Bank during the previous year relevant to assessment year under consideration. The Assessing Officer formed an opinion that income got escaped assessment from tax, accordingly, a notice u/s.148 of the Act was issued to the appellant on 29.03.2021 after duly complying with the procedure laid down u/s.148A of the Act. The appellant neither complied with the notice u/s.148, nor to the notices u/s.142(1) of the Act. In the circumstances, e- Assessment Unit of the Department(hereinafter called ‘AO’) had proceeded with framing best judgment assessment vide order dated 26.03.2022 passed u/s.147 r.w.s 144B of the Act at a total income of Rs.1,12,71,000/-. While doing so, the Assessing Officer made addition of Rs.1,12,71,000/- being the cash deposit in the bank account unexplained money u/s.69A r.w.s 115BBE of the Act.

Being aggrieve by the above assessment order, an appeal was filed before the ld.CIT(A), who vide impugned order dismissed the appeal for non- prosecution without entering into the merits of the addition.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal.

On the other hand, the ld.Sr.Departmental Representative opposed the above submissions and submits that the order passed by ld.CIT(A) is justified as the appellant had not caused appearance before the ld.CIT(A).

We heard rival submissions and perused the material available on record. We find that the ld.CIT(A) dismissed the appeal of the appellant for non- prosecution without entering into the merits of the addition. The ld.CIT(A) without dealing with the contentions of the appellant merely dismissed the appeal in limine for non-prosecution. As contemplated u/s.250(6) of the Act the ld.CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the ld.CIT(A), even while disposing of the appeal ex-parte, he is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) [2017] 297 CTR 614 (Bombay) as under : Quote, “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.

Therefore, in the light of above legal position, we are of the considered opinion and deem it proper to remit the matter requires to be remanded to the file of Learned CIT(A)/NFAC for de novo disposal of the issue on merits by passing a speaking order after allowing reasonable opportunity to the appellant, in accordance with law. All the contentions raised by the appellant are left open for consideration before the ld.CIT(Appeals).

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open Court on 29th May, 2026.