WELKIN TELECOM INFRA PVT. LTD.,,KOLKATA vs. ACIT, CIRCLE 11(1), , KOLKATA

Facts

The assessee's original return for AY 2014-15 was followed by a revised return, and the case was scrutinized under Section 143(3). Subsequently, a notice under Section 148 and 148A(b) of the Act was issued. The Ld. CIT(A) dismissed the assessee's appeal for non-prosecution, despite an adjournment request, thereby confirming the additions/disallowances made by the National Faceless Assessment Unit, including disallowance of derivative losses and arbitrary expenses.

Held

The Income Tax Appellate Tribunal (ITAT) held that the CIT(A) erred in dismissing the appeal for non-prosecution without adjudicating it on merits. Citing Sections 250(6) and 251 of the Income Tax Act, 1961, and referring to precedents like Ajji Basha and Premkumar Arjundas Luthra, the Tribunal stated that a CIT(A) is obligated to pass a speaking order on merits. Therefore, the ITAT set aside the CIT(A)'s order and remitted the matter back for fresh disposal on merits, directing that the assessee be given a reasonable opportunity of being heard.

Key Issues

1. Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding it on merits as required by Sections 250 and 251 of the Income Tax Act. 2. Whether the notice under Section 148 of the Act was barred by limitation. 3. Whether proper opportunity, including cross-examination and consideration of adjournment requests, was provided to the assessee. 4. Validity of disallowance of derivative losses and arbitrary addition of expenses.