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Facts
The assessee, Smt. Bharatkumar Rajashree, appealed against the CIT(A)'s order for Assessment Year 2016-17, which confirmed an addition of Rs. 33,45,000/- as unexplained investment under Section 68. The CIT(A) had dismissed the assessee's appeal ex-parte for non-compliance without adjudicating the grounds on merits.
Held
The ITAT, citing the Bombay High Court's ruling in PCIT (Central) v/s Premkumar Arjundas Luthra (HUF), held that the CIT(A) is mandated to dispose of appeals on merits and cannot dismiss them for non-prosecution. Consequently, the ITAT set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for de novo adjudication on merits.
Key Issues
Whether the CIT(A) is justified in dismissing an appeal for non-compliance without adjudicating it on merits; and the scope of powers and obligations of the CIT(A) under the Income Tax Act in disposing of appeals.
Sections Cited
250, 143(3), 68, 250(4), 250(6), 251(1)(a), 251(1)(b), 251(2), 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC’’BENCH: BANGALORE
Before: Dr. DIPAK P. RIPOTE & SHRI PRAKASH CHAND YADAV
Assessment Year: 2016-17 Smt. Bharatkumar Rajashree, Income Tax Officer, C/o. M/s. TRAVENZA Holidays, No. Ward-7(2)(1), 180/A, 16th Main 4th ‘T’ Block, Bengaluru. Jayanagar, Vs. Bengaluru-560041. PAN NO : AUOPR4145D APPELLANT RESPONDENT Appellant by : Sri Madhusudhan, Advocate Respondent by : Sri Ganesh R Ghale, Advocate-Standing Counsel for Revenue Date of Hearing : 18.08.2025 Date of Pronouncement : 19.08.2025 O R D E R
PER Dr. DIPAK P. RIPOTE, ACCOUNTANT MEMBER:
This appeal filed by Smt. Bharatkumar Rajashree against the order of the Learned CIT(Appeals) (NFAC) passed U/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for Asst Year 2016-17 on 05/03/2025 emanating from Assessment Order dated 22/12/2018 passed U/s. 143(3) of the Act.
The assessee has raised 11 Grounds of Appeal which are argumentative in nature and mainly they revolve around the decision of the Ld. CIT(A)’s in confirming the addition of Rs. 33,45,000/- (being 1/3rd of the entire amount for being joint holder Smt. Bharatkumar Rajashree of the account with two other members) made by the Ld. Ld. AO towards unexplained cash credits and dismissing the appeal of the assessee ex-parte without providing proper opportunity of being heard to the assessee.
Findings and Analysis: We have heard both the parties and perused the records. In this case, the Ld. CIT(A) has dismissed the appeal of the assessee for non-compliance. The relevant Paras 5.6 and 5.7 of the Ld. CIT(A)’s order is reproduced hereunder: “5.6. During the appellate proceedings, despite issuance of various hearing notices, the appellant has not produced any relevant evidences to rebut the said finding of the Ld. AO. Hence, I am of the considered view that the appellant did not discharge her onus of providing as to why the amount of Rs. 1,00,35,000/- deposited in the above said bank account should not be considered as unexplained investment U/s 68 of the Act. Hence, the addition of Rs. 33,45,000/- (1/3rd of the entire amount for being joint holder of the account with other two members) made by the Ld. AO is sustainable. 5.7. Hence, respectfully following the above mentioned judicial pronouncements and in view of the facts of the case, the grounds of appeal
filed by the appellant are hereby dismissed.
6. In the end result, the appeal of the appellant is hereby dismissed.”
4. Thus, the Ld. CIT(A) has dismissed the appeal of the assessee without adjudicating the Grounds raised by the assessee on merits.
5. The Hon’ble Bombay High Court in the case of PCIT (Central) v/s Premkumar Arjundas Luthra (HUF), [2017] 297 CTR 614 (Bom.), wherein the Hon’ble High Court has held as under:– Smt. Bharatkumar Rajashree “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."
6. Respectfully following the decision of the Hon’ble Bombay High Court’s decision PCIT (Central) v/s Premkumar Arjundas Luthra (HUF) (supra), it is held that it is mandatory for the Ld. CIT(A) to discuss and adjudicate the Grounds raised by the Smt. Bharatkumar Rajashree assessee. However, in this case, the Ld. CIT(A) has not adjudicated the Grounds raised by the assessee.
7. Therefore, the order of Ld. CIT(A) is set-aside to Ld. CIT(A) for denovo adjudication. Accordingly, all the Grounds raised by the assessee are allowed for statistical purposes.