SELVAKUMAR ANCY,CHENNAI vs. ITO, WARD-1,, NAGERCOIL

The Assessee raised the following grounds of appeal : “The order passed by the learned Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case. The learned CIT(A) also erred in dismissing the appeal and confirming the assessment without properly adjudicating the grounds raised by the appellant.

Briefly, the facts of the case are that the appellant is an Individual engaged in the business of trading. No regular return of income under the provisions of section 139 of the Income Tax Act, 1961 was filed by the appellant for the Assessment Year 2019-20. Based on the information that the appellant made cash deposits in the bank accounts maintained with State Bank of India, Kotak Mahindra Bank and City Union Bank aggregating to Rs.18,22,800/-, the Jurisdictional Assessing Officer(JAO) formed an opinion that income got escaped assessment from tax, accordingly a notice u/s.148 of the Act was issued on 03.04.2023 calling upon the appellant to file the return of income. The appellant neither complied with the notice issued u/s.148 of the Act, nor the notices u/s.142(1) of the Act. In the circumstances, the Faceless Unit of the Department(hereinafter called as ÁO) had proceeded with framing best judgment assessment vide order dated 20.03.2025 passed u/s.147 r.w.s. 144 read with section 144B of the Income-tax Act, 1961 at a total income of Rs.22,96,223/-. While doing so, the Assessing Offi9cer made addition of cash deposits in the bank accounts as unexplained for the failure of the appellant to offer plausible explanation as to the source of the cash deposits.

Being aggrieved by the assessment order, the appellant filed an appeal before the Learned CIT(A), contending that the Assessing Officer without conducting the proper enquiry as envisaged u/s.148A of the Act had initiated the reassessment proceedings. He further contended that the Assessing Officer ought not have treated entire cash deposits in the bank accounts as unexplained money of the appellant without considering the withdrawals earlier made from the same bank accounts. However, the Learned CIT(A) had dismissed the appeal for non- prosecution placing reliance on the following decisions “  Hon’ble High Court of Madhya Pradesh in the case of Tukojirao Holkar vs. CWT 223 ITR 480  Cit Vs. B.N.Bhattacharya 118 ITR 461  Hon’ble ITAT Delhi Bench in the case of Whirlpool India Ltd vs. DCIT (ITA No.2006/DEL/2011 dated 19.12.2011). 5. Being aggrieved by the order of the Learned CIT(A), appellant preferred an appeal before the Tribunal. At the outset, we find that there is a delay of 15 days in filing present appeal before this Tribunal. The appellant had filed the petition seeking condonation of delay on the ground that on account of delay in finalization of appeal by the Tax Consultant.

We have perused the Affidavit and the averments made in the Affidavit. The averments made in the affidavit remain uncontroverted by Learned Sr.DR. The Hon’ble Supreme Court in the case of M.Kalappa Sethi Vs. M.V.Laxmi Narain Rao AIR 1973 SC 627, held that an uncontroverted affidavit shall be taken as an affidavit on fact. In the light of this legal position, we are of the considered opinion that the delay had occurred in filing the appeal on account of Bonafide reasons and the explanation cannot be brushed aside. Therefore, we are of considered opinion that there is a reasonable and sufficient cause for the delay, hence, the delay is condoned. Accordingly, we admit the appeal for adjudication on merits.

We have heard rival submissions and perused the material available on record. We find that the Learned CIT(A) dismissed the appeal of the appellant for non-prosecution without entering into the merits of the addition. The Learned 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 Learned 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 Learned 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) (Bombay)/[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 the above legal position, we are of the considered view that the matter requires to be remanded with the direction to dispose of the appeal.

In the normal course, we should have remanded the matter back to the file of the Learned CIT(A), however, the Assessment Order also came to be ex parte. In the absence of prior notice u/s.142(1) of the Act, we are of the consideration opinion that matter requires remand to the file of Assessing Officer for de novo assessment in accordance with law after affording reasonable opportunity of hearing to the assessee. All the contentions raised by the appellant are left open for consideration before the Assessing Officer.

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open Court on 31st August, 2026.