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Facts
The assessee sold an ancestral immovable property for Rs. 59.67 lakhs but did not file an income tax return for A.Y. 2015-16. The A.O. initiated assessment proceedings under Section 147, issued notice under Section 148, and treated the entire sale consideration as unexplained money under Section 69A of the Act. The CIT(A) subsequently dismissed the assessee's appeal ex-parte due to non-participation without addressing the merits.
Held
The ITAT held that the CIT(A) erred in summarily dismissing the appeal for non-prosecution without deciding on the specific grounds of appeal. Citing the Bombay High Court, the tribunal emphasized that the CIT(A) is obligated to dispose of an appeal on merits by a speaking order, even if the assessee fails to participate. Consequently, the matter was restored to the file of the CIT(A) for re-adjudication.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding it on merits, and if the CIT(A) is statutorily obligated to pass a speaking order addressing all grounds of appeal even in the absence of the appellant.
Sections Cited
147, 144, 148, 148A(b), 69A, 250, 250(6), 251(1)(a), 251(1)(h), 251(2), 246A
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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
सुिवाई समाप्त होिे की ततति/ Date of : 09.07.2025 Conclusion of Hearing घोर्णध की तधरीख/Date of Pronouncement : 18.07.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 13.12.2024, which in turn arises from the order passed by the Assessing Officer (for short “A.O.”) under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (for short “the Act”) dated 31.01.2024 for A.Y. 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before us:
“1) The order of the learned CIT (A) Is erroneous both on facts and in law. 2) The learned CIT(A) erred in deciding the appeal exparte without providing opportunity. 3) The learned CIT(A) ought to have held that the order of assessment is not valid as the notice is not properly issued. 4) The learned CIT(A) erred in confirming the determination of the STCG at Rs. 52,98,250/- and in treating the gain as STCG. 5) The learned CIT(A) ought to have seen that the property sold is a long term capital assets and the appellant has only 1/3rd share in the property 6) The learned CIT(A) ought to have held that the gain is assessable as LTCG and the indexed cost of acquisition is allowable as deduction. 7) Any other ground/grounds that may be urged at the time of hearing;”
Succinctly stated, the A.O. based on information that though the assessee had, during the subject year, entered into high-value transactions, but had not filed her return of income, initiated proceedings under Section 147 of the Act. The A.O. issued Show- Cause Notice (SCN) under Section 148A(b) of the Act, dated 22.03.2022, calling upon the assessee to explain as to why a notice under Section 148 of the Act may not be issued to her. Thereafter, the A.O. not finding favour with the reply filed by the assessee issued notice under Section 148 of the Act.
During the course of assessment proceedings, the A.O. observed that though the assessee had along with her son and daughter as co-owners sold an ancestral immovable property for a consideration of Rs. 59.67 lakhs vide sale deed No.9008/2014, dated 12.11.2014, but had not filed her return of income for the subject year. Accordingly, the A.O. called upon the assessee to file an explanation on the aforesaid issue. As there was no compliance by the assessee to the notices/letters issued by the A.O., therefore, he held the entire amount of sale consideration of the subject property amounting to Rs. 59.67 lakhs (supra), as her unexplained money under Section 69A of the Act.
Aggrieved, the assessee carried the matter in appeal before the CIT(A).
As the assessee, despite having been afforded sufficient opportunity on three occasions, i.e., on 11.09.2024, 05.11.2024, and 21.11.2024, had failed to participate in the proceedings before the CIT(A), therefore, the latter, holding a firm conviction that the assessee had nothing to say in support of the various grounds of the appeal based on which the impugned order was assailed before him, thus, summarily dismissed the appeal on the said count itself.
The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.
We have heard the learned Authorized Representatives of both parties, perused the orders of lower authorities and the material available on record.
Admittedly, it is a matter of fact discernible from the record that the CIT(A), holding a conviction that as the assessee had failed to participate in the proceedings before him, therefore, she had nothing to say on the grounds based on which the impugned assessment order was assailed before him. Thereafter, the CIT(A) had dismissed the appeal on the ground that there was no reason for him to interfere with the findings of the A.O.
We have thoughtfully perused the order of the CIT(A). Although it is observed by him that he has carefully considered the matter and find no reason to interfere with the findings of the A.O., but we are afraid that he had failed to record any independent findings as to why the additions made by the A.O. merits to be sustained.
Be that as it may, we are of the firm conviction that as the CIT(A) had in substance dismissed the appeal for want of prosecution and not dealt with and disposed of the specific grounds on which the impugned assessment order was assailed before him, therefore, the matter requires to be restored to his file for re-adjudication. Our aforesaid view that the CIT(A) is obligated to dispose of the appeal based on a speaking order despite the non- participation by the assessee is supported by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon'ble High Court had observed as under: "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 AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 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. Sec. 251(1)(a) and (h) 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-s. (2) of s. 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 s. 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 w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CITIA) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO 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 s. 251(1)(a) and (b) and Explanation to Sec. 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."
We thus, in terms of our aforesaid observations, are unable to persuade ourselves to concur with the manner in which the CIT(A) had summarily disposed of the appeal vide a non-speaking order. Accordingly, in all fairness, we restore the matter to the file of CIT(A) with a direction to re-decide the appeal vide a speaking order i.e by addressing the specific grounds based on which the impugned order of assessment has been assailed before him. The Grounds of appeal Nos.1 to 7 are disposed of in terms of our aforesaid observations.
Resultantly, the appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced in the Open Court on 18th July, 2025.