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Facts
The assessment was completed by the AO under Section 147 r.w.s. 144, determining total income at Rs. 1,87,20,150/- as against the returned income of Rs. 3,87,150/-. The assessee appealed to the CIT(A), who dismissed the appeal for non-prosecution.
Held
The Tribunal held that the CIT(A) is expected to adjudicate issues on merits, and dismissing an appeal solely for non-prosecution is not in consonance with the Act. However, the assessee also lacked diligence. Therefore, the matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without adjudicating on merits and ignoring filed submissions, and if the reassessment proceedings were valid.
Sections Cited
147, 144, 148, 69, 56(2)(vii)(b)(ii), 250
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This appeal filed by the assessee is directed against the order passed by the Ld. CIT(A)/NFAC, Delhi dated 29.09.2025 for the Assessment Year 2014-15. 2. In the present appeal Assessee / Revenue raised the following grounds:
1. That the order passed by the Ld. Commissioner of Income Tax (Appeals), NFAC. dated 29.09.2025 under section 250 of the Income-tax Act, 1961 is illegal, arbitrary, and void ab initio, having been passed ex-parte without adjudicating the appeal on merits which is arbitrary and unjustified.
2. That the Id. CIT(A) erred in ignoring the adjournment filed on 22.09.2025 and submissions filed on 29.09.2025 and that the appellant had duly filed the statement of facts and grounds of appeal along with explanation forming part of the record available for adjudication.
3. That the re-opening by the Jurisdictional AO (JAO) is illegal in as much as JAO is not empowered to issue notice under s. 148 of the IT Act. 1961 after the new regime of faceless assessment has been brought into force by the amendment made under s. 148 of the Act, 1961 and as such the assessment order passed in pursuance of an invalid notice is illegal, arbitrary and unjustified.
4. That the Ld. CIT(A) failed to adjudicate the substantive grounds challenging illegality of reassessment proceedings initiated under section 147 r.w.s. 144 without valid jurisdiction, without DIN OR notice within limitation, addition of Rs.93,00,000/- as unexplained investment under section 69 und addition of Rs.90,33,000/- under section 56(2)(vii)(b)(ii) on alleged difference in stamp duty value each of which deserved independent consideration on merits and as such the order passed is arbitrary and unjustified.
That the l.d. CIT(A)s order being non-speaking, mechanical, and devoid of any findings on issues raised, is contrary to principles of natural justice and deserves to be quashed with direction to decide the appeal afresh on merits after providing due opportunity of hearing.
That the appellant craves leave to add, amend, vary, OR withdraw any ground of appeal before OR at the time of hearing.
7. That the order passed by the Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.
Briefly stated, the facts of the case are that the assessment in the case of the assessee was completed by the Assessing Officer under section 147 r.w.s. 144 of the Income Tax Act, 1961, determining the total income at Rs. 1,87,20,150/- as against the returned income of Rs. 3,87,150/-.
Being aggrieved, the assessee preferred an appeal before the Ld. CIT(A).
5. From the perusal of the impugned order, it is observed that the Ld. CIT(A) dismissed the appeal primarily on account of non-prosecution, observing that the assessee did not comply with the notices issued during the appellate proceedings. The Ld. CIT(A) noted that hearing notices were issued on 07.08.2025, 10.09.2025 and 16.09.2025, however, according to the Ld. CIT(A), no documentary evidence was furnished by the assessee in support of the grounds of appeal. Consequently, the appeal was dismissed.
6. Against the order of the Ld. CIT(A) the assessee preferred in appeal before the Tribunal.
During the course of hearing the Ld. AR submitted that the impugned order passed by the Ld. CIT(A), NFAC is illegal and arbitrary as it was passed ex-parte without adjudicating the appeal on merits, despite the appellant having filed an adjournment application on 22.09.2025 and written submissions on 29.09.2025 along with the statement of facts and grounds of appeal. It was contended that the Ld. CIT(A) ignored the material available on record and failed to adjudicate the legal grounds challenging the validity of reassessment proceedings, including lack of jurisdiction, absence of valid notice, DIN and limitation. The Ld. AR further submitted that the Ld. CIT(A) also did not examine the additions of Rs. 93,00,000 under section 69 and Rs. 90,33,000 under section 56(2)(vii)(b)(ii). It was thus argued that the impugned order being non-speaking and passed in violation of principles of natural justice deserves to be set aside with a direction to decide the appeal afresh on merits after providing adequate opportunity of hearing to the appellant.
Per contra, the Ld. DR relied on the order of the lower authorities.
We have heard the rival contention and perused the material available on the record. In the present case, we find that the Ld. CIT(A) has dismissed the appeal mainly on account of non-appearance/non-compliance on the part of the assessee. However, it is a settled position of law that the Ld. CIT(A), being the first appellate authority, is expected to adjudicate the issues raised in appeal on merits after considering the material available on record. Merely dismissing the appeal for non-prosecution without proper adjudication of the grounds raised by the assessee is not in consonance with the scheme of the Act.
9.1 At the same time, it is also evident that the assessee did not properly pursue the appeal before the Ld. CIT(A) despite the opportunities granted. Such conduct on the part of the assessee reflects lack of diligence in prosecuting the appeal before the appellate authority.
9.2 Considering the totality of the facts and in the interest of substantial justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) for fresh adjudication of the appeal on merits after providing adequate opportunity of being heard to the assessee.
9.3 However, keeping in view the non-cooperative conduct of the assessee before the Ld. CIT(A), we consider it appropriate to impose a cost of Rs. 10,000/- upon the assessee. The assessee is directed to deposit the said amount in the “Poor Patient Welfare Fund, PGIMER, Chandigarh” within 30 days from the receipt of this order and place the proof of such deposit before the Ld. CIT(A) at the time of fresh appellate proceedings.
9.4 The Ld. CIT(A) shall thereafter decide the appeal afresh in accordance with law after providing adequate opportunity to both the parties. The assessee is also directed to fully cooperate in the appellate proceedings and not to seek unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.