YOGESHWAR RAJ SINGH, KAWARDHA,KAWARDHA vs. ACIT-CENTRAL CIRCLE, BILASPUR, BILASPUR

The following grounds have been raised by the assessee:

The relevant facts giving rise to this appeal are that the assessee filed his Income Tax Return (‘ITR’) of the relevant year on 30.11.2021 declaring income of Rs.15,84,180/-. Besides the taxable income, the assesse has also declared agricultural income of Rs.3,32,834/-. Certain incriminating materials seized during the search & seizure operations under section 132 of the Act in Kanhaiya Lal Agrawal Group of cases on 09.03.2022 revealed that the assessee along with Mrs. Kriti Singh had made cash payment of Rs.60,00,000/- (Rs.30 lacs each co-owner) as on-money for acquiring an immovable property. Based on this information, the Ld. Assessing Officer (‘AO’) reopened the case of the assessee under section 148 of the Act by invoking the explanation 2(iv) of section 148 of the Act. The assessee had neither filed any ITR in response to the notice under section 148 of the Act nor had ensured any compliance during the reopened assessment proceedings though the Ld. AO had provided various opportunities of being heard to the assessee. Therefore, the Ld. AO had no option except to complete the assessment ex-parte. The Ld. AO had not only taxed the unexplained investment of Rs.30,00,000/- made for acquiring the property from Mr. Naveen Agrawal, but also disallowed the claims of (i) deduction of Rs.1,60,000/- under Chapter VI of the Act and (ii) deduction of Rs.4,66,658/- under section 57 of the Act on the reasoning that the assessee failed to submit any corroboratory evidence for the said claims though the same were specifically asked. Further, the Ld. AO, in absence of any explanation regarding source of bank deposits and investment in vehicle, taxed the bank deposits of Rs.34,68,098/- and investment of Rs.17,39,467/- for purchasing a vehicle under section 69 r.w.s. 115BBE of the Act. Besides, the agricultural income of Rs.3,35,834/- was also taxed under the head ‘income from other sources’ in absence of any corroboratory material brought on the record to substantiate the agricultural income. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal ex-parte due to non-prosecution.

Before us, Shri R.B. Doshi, 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 the appeal, the Ld. Counsel submitted. He prayed for remanding the case back to the file of Ld. CIT(A) for fresh adjudication.

Shri Raghunath, Ld. CIT-DR, drawing our attention to various paras of the 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 Authorities 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 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 these 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 find force in the submission of the Ld. AR that the non-compliance on the part of the assessee is the sole reason for dismissal of the appeal. 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.) 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur गाड" फाईल / Guard file. 5. आदेशानुसार/ BY ORDER, Hem Kumari //// Kumari Shrivastava, PS, Shrivastava, PS, ITAT, Raipur Date: 2026.05.07 ITAT, Raipur 09:43:30 +05'30' (Private Secretary) आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur