PASALA JOJAMMA,WARANGAL vs. ITO., WARD-1, WARANGAL
Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
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 22.09.2023,
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which in turn arises from the order passed by the Assessing
Officer u/s 143(3) of the Income Tax Act, 1961 (for short “the Act”) dated 21.12.2019 for A.Y. 2017-18. 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 ex-parte without providing opportunity to the appellant;
3. The learned CIT(A) erred in confirming the addition of Rs.11,82,392/- made by the Assessing Officer by applying the provisions of Section 69A of the I.T. Act.”
Succulently stated, the assessee had filed its return of income for AY 2017-18 on 08.07.2018, declaring an income of Rs.5,03,830/-. Subsequently, the case of the assessee was selected for limited scrutiny under CASS and notice under Section 143(2) of the Act, dated 07.09.2018 was issued by the AO.
During the course of the assessment proceedings, the AO observed that the assessee had during the subject year, made cash payments for credit card payments as under: S.No. Bank Name A/c No. Amount deposited during demonetization 1 SBI
2,79,006
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SBI
9,03,386
Total
11,82,392
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4. The AO observed that the assessee had failed to come forth with the requisite details relating to the business activities that were undertaken by him, nature of income earned, details of bank accounts, details of cash deposits for the subject year, i.e AY 2017-
18 along with sources thereof. Observing that the assessee had failed to come forth with any explanation regarding the source of the cash payments, i.e., credit card payments of Rs. 11,82,392/-, the Assessing Officer held the same as having been sourced out of his unexplained money under Section 69A of the Act. Apart from that, the Assessing Officer observed that the assessee had suppressed his salary income. It was observed by him that while for the assessee had returned his income at Rs.7,67,120/-, but as per Form-16, he had received a salary of Rs.9,44,726/-.
Accordingly, the Assessing Officer adopted the gross salary at Rs.
9,44,726/-(supra) and worked out the taxable salary of the assessee at Rs.8,46,192/-. The AO, after making the aforesaid addition under Section 69A of the Act of Rs. 11,82,392/- (supra), determined the income of the assessee vide his order passed under Section 143(3) of the Act, dated 21-12-2019 at Rs.20,28,580/-.
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5. Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success. As discernible from the record, the CIT(A) taking cognizance of the fact that the assessee despite having been put to notice about the fixation of hearing of appeal on three occasions, i.e., 24-08-2022, 05-12-2022, and 14-09-
2023, had failed to respond, thus, holding a conviction that he was not interested to pursue the appeal, summarily approved the view taken by the AO and dismissed the appeal.
The assessee, being aggrieved by the order of CIT(A), has carried the matter in appeal before us.
Ms. Sandhya, Advocate, the learned Authorized Representative (for short the “ld.AR”) for the assessee, at the threshold of hearing, submitted that the assessee had suffered the dismissal of the appeal vide a non-speaking order. Elaborating on her contention, Ld. AR submitted that the CIT(A), without adverting to the specific grounds based on which the impugned additions made by the Assessing Officer were assailed before him had summarily dismissed the appeal for want of prosecution/ participation by the assessee in the course of the appellate proceedings. Elaborating further on her contention, Ld.AR had 5 submitted that even if the assessee had failed to participate in the proceedings before the first appellate authority, the latter remained under a statutory obligation to deal with and dispose off the appeal vide a speaking order. The LD.AR submitted that the matter in all fairness should be restored to the file of CIT(A) with a direction to re-adjudicate the same.
Per contra, the Ld. DR relied upon the orders of the lower authorities.
We have thoughtfully considered the orders of the lower authorities in the backdrop of the contentions advanced by the Ld, Authorized Representatives of both parties. Admittedly, there is no denying of the fact that the assessee, despite having been put to notice about the fixation of hearing of the appeal on three occasions, i.e., on 24-08-2022, 05-12-2022, and 14-09-2023, had neither sought for an adjournment nor participated in the proceedings before the first appellate authority. Although, we do not approve the conduct of the assessee, who had remained non- ccoperative in the course of the proceedings before the CIT(A), but at the same time, are unable to persuade ourselves to concur with the manner in which the latter, without adverting to the specific
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grounds of appeal based on which the assessee had assailed the impugned order before him, summarily dismissed the appeal for want of prosecution.
As observed by us hereinabove, the CIT(Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issues which did arise from the impugned order and were assailed by the assessee before him. We are unable to persuade ourselves to accept the manner in which the appeal of the assessee had been disposed off by the CIT(Appeals). In our considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. Rather, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the CIT(Appeals) remains under a statutory obligation to apply his mind to all the issues which arise from the impugned order before him. As per the mandate of the law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. Our aforesaid view is fortified by the judgment of the Hon'ble High
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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 CIT(A) 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, not being able to persuade ourselves to subscribe to the summary dismissal of the appeal by the CIT(Appeals) for 8 non-prosecution, therefore, set-aside his order with a direction to dispose off the same vide a speaking order. Needless to say, the CIT(Appeals) shall in the course of the de-novo appellate proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at liberty to substantiate his claim on the basis of documentary evidence, if any. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes in terms of the aforesaid observations.
In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the Open Court on 15th April, 2025. (श्री मिुसूदन सावडिया) (MADHUSUDAN SAWDIA) लेखा सदस्य/ACCOUNTANT MEMBER d/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated 15.04.2025. **#TYNM/sps
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आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-
निर्धाररती/The Assessee : Pasala Jojamma, 1-1-123/5/2/1, NIT Prasanth Nagar, Warangal, Telangana.
रधजस्व/ The Revenue : Income Tax Officer, Ward – 1, Warangal. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file
आदेशधिुसधर / BY ORDER
Sr. Private Secretary
ITAT, Hyderabad