NARESH CHANDRA JAJRA,JODHPUR vs. ACIT, CIRCLE-2, JODHPUR

At the time of hearing the Ld. counsel for the assessee has submitted that the impugned order was passed by Ld. CIT(A) ex-parte

The Ld. AR argued that the Ld. CIT(A) has merely relied upon certain judicial precedents relating to dismissal for non-prosecution. The said approach is contrary to the settled legal proposition of law that the First Appellate Authority is duty bound to dispose of the appeal on merits. The AR has requested that the matter may be restored back to the Ld. CIT(A) or the AO to verify the source of cash deposits in the bank with reference to the bank book and cash book maintained by the assessee.

Per contra, the Ld. DR stands by the impugned order.

Having heard both the sides and perusal of the material on record, it is noted that the Ld. CIT(A) has passed the impugned order ex-parte qua the assessee for non-prosecution and dismissed the appeal without adjudicating the issues on merits of the case. It is admitted fact that the Ld. CIT(A) has dismissed the appeal merely on account of alleged non- compliance without adjudicating the relevant grounds on merits of the case regarding the source of cash deposits in the bank account

As per mandate, the Ld. CIT(A) ought to have decided the appeal on merits of the case after considering the facts as discussed by the Ld. AO in the assessment year on the issue of source of cash deposits in the bank account. The Hon’ble Delhi High Court in the case of CIT Vs. Ansal Housing Finance and Leasing Co. Ltd. (2013) 354 ITR 180 (Del) held that the Ld. CIT(A) is required to adjudicate the appeal on merits and cannot dismiss the same for non-prosecution.

In the case of CIT Vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC), the Apex Court has held that powers of the First Appellate Court are co- terminus with that of the Assessing Officer and he is obliged to examine the correctness of the assessment both on the facts and in law. The Failure of the Ld. CIT(A) to adjudicate the grounds raised by the appellant renders the impugned order liable to be set aside.

In the present case the Ld. CIT(A) has dismissed the appeal of the assessee for non-prosecution without even addressing the contends of the reply and the documentary evidences filed by the assessee before the

Considering the factual matrix of the case and judicial precedents, we considered it deem appropriate to set aside the impugned order and restore the matter back to the file of Assessing officer to pass De-novo assessment order after granting adequate opportunity of being heard to the assessee and considering the detailed submissions filed on record regarding the financial capacity and the source of cash balance available with the assessee with reference to the bank book and cash book maintained for the assessment year under consideration. The assessee shall cooperate in the assessment proceedings by furnishing the requisite information sought for by the AO during the course of De-Novo assessment proceedings.

In the result, the appeal of the assessee is allowed for statistical purposes.