RATHINASAMY PARTHIBAN,VIRUDHUNAGAR vs. ITO, WARD-3,, VIRUDHUNAGAR

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ITA 679/CHNY/2026Status: DisposedITAT Chennai19 May 2026AY 2018-196 pages
AI SummaryRemanded

What did the Tribunal hold?

The tribunal held that the CIT(A) is obligated to dispose of appeals on merits, even if ex-parte, and cannot dismiss them solely for non-prosecution. The matter was remanded to the CIT(A) for de novo disposal.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-prosecution due to the auditor's failure to represent the case. The Assessing Officer had made an addition of Rs. 2,45,00,553/- on account of capital gains from the sale of immovable property.

What were the issues?

Whether the CIT(A) can dismiss an appeal for non-prosecution without considering the merits of the case. The obligation of the CIT(A) to dispose of appeals on merits.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 143(3A),Section 143(3B),Section 50C,Section 246A,Section 251(1)(a),Section 251(1)(b),Section 251(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES, CHENNAI

Before: HON’BLE INTURI RAMA RAO & HON’BLE MANU KUMAR GIRI

आदेश / ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER: This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax(Appeal)[NFAC] dated 02.09.2025 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2018-19.

2.

The Assessee has raised the following grounds of appeal: “1. The order of the Assessing Officer is opposed to law on the facts and in the circumstances of the case.

2.

The assessing officer has erred in making addition of Rs.2,45,00,553/- as undisclosed income

3.

In this connection, it is submitted that the non response to the notices issued by the NFAC, Delhi is neither willful nor wanton but due to the fact that the assessee had engaged an Auditor to represent the case before the NFAC, Delhi but the Auditor has not taken effective steps to represent the case before which resulted in the appeal being dismissed.

4.

It is further submitted that an immovable property was sold on 05/06/2017 for Rs.2,55,00,001/- (Value fixed by the Stamp Value Authority also Rs.2,55,00,001/-) by the assessee along with 3 persons totally 4 persons. The share of the assessee in the above immovable property is only 8.5% and the assessee has only received Rs.21,91,406/- as his share out of Rs.2,55,00,001/- received for the above transaction. The assessee has shown his share of sale value of the property as capital gains in the Return of Income filed on 31/10/2018 for the Assessment year 2018-19 and the same was furnished during the assessment proceedings.

5.

For these and such other grounds that may be adduced at the time of hearing, it is prayed that the order passed by the Assessing Officer be remitted back to the file of the Assessing Officer for visiting the issue afresh and for passing a fresh order and render justice.”

3.

Briefly the facts of the case are that the appellant is an Individual. The return of income for the Assessment Year 2018-19 disclosing a total income of Rs.9,57,310/-. Against the said return of income, the assessment was completed by the National e-Assessment Unit of the Department, Delhi(hereinafter called ‘AO’) vide order dated 26.03.2021 passed u/s.143(3) read with section 143(3A) & 143(3B) of the Income Tax Act at a total income of Rs.2,56,89,625/-. While doing so, the Assessing Officer made addition of Rs.2,45,00,553/- while computing the capital gains on the sale of immovable property by adopting the value adopted for stamp duty purpose as a deemed sale consideration u/s.50C of the Income Tax Act.

4.

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

5.

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

6.

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).

7.

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.

Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A)

would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn.

Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” Unquote.

8.

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 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).

9.

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 19th May, 2026.

Sd/- Sd/- MANU KUMAR GIRI INTURI RAMA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; �दनांक / Dated : 19th May, 2026 SGR, Sr.PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, चे�नई / DR, ITAT Chennai. गाड� फ़ाइल / Guard File. 5.

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