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Facts
The assessee's appeal was dismissed by the CIT(A)/NFAC for non-prosecution due to non-compliance with notices. The assessee attributed this to lack of access to their email, claiming they had a strong case on merits.
Held
The Tribunal noted that the CIT(A)/NFAC's order dismissing the appeal for non-prosecution violated Section 250(6) of the Act for not stating points for determination and reasons. The Tribunal set aside the order and restored the appeal to the CIT(A)/NFAC for fresh adjudication on merits.
Key Issues
Whether the CIT(A)/NFAC's dismissal of the appeal for non-prosecution was justified, and whether the Tribunal should restore the appeal to the CIT(A)/NFAC for adjudication on merits.
Sections Cited
147, 148, 142(1), 144, 144B, 292C, 234A, 234B, 151, 250(6), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessment Year : 2017-18 Gourav Bhagwandas Agarwal, ITO, Ward-8(1), Pune Flat No. B, Dnyaneshwar Apartment, Shri Agrasen Maharaj Road, Vs. Near Mahajan Hospital, Musulkar Colony, Pune-411018 PAN : AGJPA0272D अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Digambar Surwase Department by : Shri Manish M. Mehta Date of hearing : 04-11-2025 Date of 28-11-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 27.12.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2017-18.
There is a delay of 32 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :-
1. On facts and circumstances of case and in law, the learned CIT(A) (NFAC) erred in dismissing the appeal of appellant for non-prosecution. The appellant prays for just, proper and appropriate relief.
2. On facts and circumstances of case and in law, the learned CIT(A) (NFAC) erred in confirming addition made by learned AO of Rs.2,91,45,500/- under section 69A of the IT Act 1961. The appellant prays for just, proper and appropriate relief.
3. On facts and circumstances of case and in law, the learned CIT(A) (NFAC) erred in confirming addition made by learned AO of Rs.2,91,45,500/- under section 69A of the IT Act 1961 on the ground that appellant has not explained the details of seizure of cash. The appellant prays for just, proper and appropriate relief.
4. On facts and circumstances of case and in law, CIT(A) erred in confirming addition of Rs.2,91,45,500/- under the head income from other source by ignoring the facts that appellant was not the owner of the money seized. The appellant prays for just, proper and appropriate relief. 5. On facts and circumstances of case and in law, CIT(A) erred in confirming addition of Rs.2,91,45,500/- under the head of income from other sources by ignoring the fact that Mr Seeman George in his affidavit has confirmed that money belongs to him. The appellant prays for just, proper and appropriate relief. 6. On facts and circumstances of case and in law, learned AO erred in not granting credit of tax deducted at source of Rs. 1,55,312/and self- assessment tax of Rs. 5,60,610/- paid by the appellant. 7. On facts and circumstances of the case and law, learned AO erred in charging interest under section 234A, 234B of the Income Tax Act, 1961. 8. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
The assessee has also raised an additional ground of appeal which reads as under :
1] The appellant submits that on facts and circumstances of case and in law, assessment proceedings initiated under section 147 of Act as well as assessment proceedings completed u/s 147 r.w.s. 144 of the Act, are invalid, bad in law since the requisite approval / sanction under section 151 of Income Tax Act, 1961 given /granted without application of mind. Accordingly, assessment proceedings so initiated be kindly annulled /quashed and appellant be granted just and proper relief. The appellant submits that the additional ground raised are legal in nature and as all the facts are on record, the assessee requests for admission of the above grounds of appeal.
5. Briefly stated the facts as culled out from Form 35 filed before the Ld. CIT(A)/NFAC are that the assessee is an individual and is the proprietor or Ms. Sai Distributors, a proprietor ship firm, carrying on the business of distributorship for Idea Cellular Ltd. His business is based on commission received from Idea Cellular Ltd. For AY 2017-18, the assessee filed his return of income on 07.11.2017 declaring total income at Rs.27,05,140/-. The case of the assessee was reopened based on the information received from the Police authority that they have seized demonetized old currency cash of AY 2017-18 Rs.2,91,45,500/- in SBN while patrolling on the Mumbai Pune highway from a car in which the assessee along with two other persons was travelling. After obtaining the requisite approval from the competent authority, the Ld. Assessing Officer (“AO”) issued notice u/s 148 of the Income Tax Act, 1961 (the “Act”) on 30.03.2021 requesting the assessee to file a correct and true return of income for AY 2017-18 within 30 days of receipt of the said notice. However, the assessee failed to comply. Notices issued u/s 142(1) of the Act from time to time also remained uncomplied with. Thereafter, the assessee filed its reply to the final show cause notice on 09.03.2022. Due to non- compliance by the assessee, the Ld. AO formed an opinion that the assessee chose to file the reply at the fag end of the proceedings just to delay the scrutiny. He, therefore, proceeded to complete the assessment as best judgment assessment u/s 144 of the Act. The Ld. AO, however, took cognizance of the reply filed by the assessee which is reproduced in his assessment order. Before the Ld. AO, the assessee claimed that the seized cash belonged to one Mr. Seemon George, however, the claim of the assessee was not found to be acceptable by the Ld. AO as according to him Mr. Seemon George was not able to prove with necessary documentary evidences that the money under the possession of the assessee actually belongs to him. He, therefore, presumed that the seized money belonged to the assessee under the provisions of section 292C of the Act and completed the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act on assessed income of Rs.3,18,50,640/- by making an addition of Rs.2,91,45,500/- to the income of Rs.27,05,140/- returned by the assessee vide his order dated 15.03.2022.
Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. There was non-compliance by the assessee to the various notices issued by the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC therefore dismissed the appeal of the assessee for non-prosecution without deciding the appeal on merits, by observing as under: “4.0. Decision: 4.1. The appeal was filed by the appellant on 16.05.2022 against the order u/s144 rws 147 of the Act. In connection to the appeal, opportunities were provided by CIT(A), NFAC to the appellant to substantiate his grounds of appeal on following dates: Sr. No. Date on which hearing notices were issued 1 08.10.2024 2 08.11.2024 3 16.12.2024 4.2. Against all these notices by CIT(A), NFAC, there was no response from the appellant, as has been brought out above, it is evident that the appellant is not interested in filing any details during the appellate proceedings and avail the opportunity under the principle of natural justice. In response to the notices issued, even adjournment was not sought. In such situation, the only conclusion which can be drawn is that the appellant is not interested in pursuing the appeal. 4.3. It has been held by the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another (118 ITR 461) that appeal does not mean merely filing of memo of appeal but also pursuing it effectively. In cases where the appellant does not want to pursue the appeal, appellate authorities have inherent power to dismiss the appeal for non-prosecution as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009. While deciding the issue, the Hon'ble High Court of Bombay has referred to the observations of Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Mannalal Vs. Nandramdas Dwarkadas AIR 1958 MP 260 wherein it was observed:- "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses..." 4.4. This appeal has been filed by the appellant claiming that the action of the Assessing Officer is not supported by facts and laws and that it is unjust. In such a situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, if any, to support the claim. The 'burden of proof is always on the person who makes the claim, In this case, it is the appellant who has made the claim by filing the appeal. Thus, in cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where, however, the appellant claims exemption, the burden is on the appellant to prove it to be exempt. Same is the position in case of all allowances, deductions, claims or loss, etc. Since an appeal is nothing but the claim of the appellant that he has been unduly unjustifiably taxed, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so. From the conduct of the appellant as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal. 4.5. 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 is hereby dismissed. 5.0. In the end result, the appeal of the appellant is hereby dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the non-appearance/non-compliance before the Ld. CIT(A)/NFAC was not deliberate. He submitted that the notices of hearing went unnoticed by the assessee due to lack of access to the email account on which the notices were served. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to substantiate its case by filing all the requisite details/ documentary evidence before the Ld. CIT(A)/NFAC. He, therefore, prayed that in the interest of justice, the matter may be restored to the file of the CIT(A)/NFAC to decide the issues raised by the assessee before him afresh on merits, after affording an opportunity of hearing to the assessee.
The Ld. DR, on the other hand, heavily opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite number of opportunities granted, the assessee never bothered to make any submission before the Ld. CIT(A)/NFAC and also did not comply with the notices issued by the Ld. AO. He accordingly submitted that the order of the Ld. CIT(A)/NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee should be dismissed.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A)/NFAC. It is an admitted fact that despite number of opportunities granted, the assessee did not make any submission for which the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee. The Ld. AR has submitted that such non-compliance was not intentional but resulted on account of the reasons cited above. It is the submission of the Ld. Counsel for the assessee that the assessee has a strong case on merits and given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(A) / NFAC. The appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Apex Court in the case of CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and the Hon’ble Bombay High Court in the case of M/s. Chemipol Vs. Union of India in Excise Appeal No. 62 of 2009 and dismissed the appeal of the assessee for non-prosecution without himself going into the merits of the case. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex- parte where the assessee does not prosecute his appeal in spite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
Considering the totality of the facts of the case and in the interest of justice and without going into the merits of the appeal, we deem it fit and proper to set aside the impugned order of the Ld. CIT(A)/NFAC and restore the issues raised by the assessee back to file of the Ld. CIT(A)/NFAC with a direction to decide the same on merits as per fact and law, after giving one final opportunity of being heard to the assessee. The assessee is at liberty to raise the additional ground before the Ld. CIT(A)/NFAC who shall admit and adjudicate the additional ground also. The assessee is also hereby directed to provide the latest and active email id to the Department for receiving notices of hearing and remain vigilant in accessing the email(s). Needless to say, the assessee shall appear and make submissions before the Ld. CIT(A)/ NFAC on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(A) / NFAC shall be at liberty to pass appropriate order as per law. At the same time, because of the callous attitude of the assessee in not responding to the notices issued by the office of the Ld. CIT(A)/NFAC, we levy a cost of Rs.10,000 /- on the assessee which shall be deposited within one month from the receipt of this order. The Ld. CIT(A) / NFAC shall ensure that the cost has been deposited before disposal of the appeal. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.