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Facts
The assessee challenged an order of the CIT(A) that confirmed a reassessment order passed under Section 147 read with Section 144 of the Income Tax Act for AY 2019-20. The assessee argued that the reassessment proceedings were void for want of jurisdiction, initiated contrary to the Act, and passed without proper application of mind. The assessee also claimed no income had escaped assessment.
Held
The Tribunal found that the CIT(A) had dismissed the assessee's appeal for non-compliance without adjudicating on the merits, which is contrary to the provisions of Section 250 of the Income Tax Act and the pronouncements of the Hon'ble Bombay High Court. The CIT(A) has a mandatory duty to decide the appeal on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without deciding the case on merits. Whether the reassessment proceedings were initiated and conducted in accordance with the law and principles of natural justice.
Sections Cited
147, 144, 144B, 148A, 151A, 149(1), 69A, 115BBE, 250, 246A, 151, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
Assessment Year: 2019-20 Manda Shantaram Garade, V The Assessing Officer, 66, Dhamane Gavthan, Near s Ward-9(3), Pune. Padmavati Mandir, Talegaon, Maharashtra – 410506. PAN: BJCPG4762K Appellant/ Assessee Respondent / Revenue Assessee by Shri Nishit Gandhi(Virtual), Aadnya Bhandari(Present in ITAT Pune Bench) Revenue by Shri Ramnath P Murkunde – CIT(DR) Date of hearing 18/09/2025 Date of pronouncement 19/09/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] passed under section 250 of the Income Tax Act, 1961 dated 26.03.2025 for the A.Y.2019-20 emanating from the Assessment Order passed under section 147 r.w.s 144 read with section 144B of the Income Tax Act, 1961 dated 12.03.2024. The Assessee has raised the following grounds of appeal : “ON JURISDICTION AND VALIDITY OF REASSESSMENT: 1.1 In the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals), National Faceless Appeals Centre ["Ld. CIT(A)" for short) erred in confirming the re-assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ["the Act" for short] passed by the Learned Income Tax Officer
9. (3), Pune ["the Ld. AO" for short] without appreciating that the said re-assessment proceedings and the consequential assessment order are bad in law and void for want of jurisdiction. 1.2 In the facts and circumstances of the case and in law, the impugned re-assessment u/s 147/148 is bad in law and void also since: i. The entire re-assessment from initiation to completion is completely contrary to the extant law and deserves to be quashed, ii. The Petitioner has neither any income nor any taxable income and therefore no income escaping assessment during the relevant year. iii. The initiation of re-assessment was in respect of cash deposits of Rs.15.000-as evident from the Notice us 148A(b) whereas in the order uis 148A(d), the entire complexion of the case was changed stating that initiation of re-assessment is confirmed to verify the withdrawals of Rs.22,00,000 from her bank account which are admittedly from the opening bank balance: iv. No addition in respect of the issues as stated in the order u/s 148A(d) is made while passing the final assessment order u/s 144 r.w.s. 147 of the Act and therefore no other or further additions could have been made by the Ld. AO; v. The entire re-assessment is initiated and conducted in violation of section 151A read with Notification 18 of 2022; vi. In fact, the additions of Rs.94,28,953 are made by the Ld. AO to validate his actions so as to get over the limitation contained in section 149(1) of the Act.
1.3 In the facts and circumstances of the case and in law, the impugned re-assessment be quashed and set aside. ON NATURAL JUSTICE: 2.1 In the facts and circumstances of the case and in law the Ld. CIT(A) erred in confirming the action of the Ld. AO who in turn made huge additions and passed the Assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ("the Act"] in gross violation of principles of natural justice. 2.2 In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in i. Not considering the facts of the case before him and further erred in not adjudicating the appeal on merits. Not appreciating that the Ld. AO himself erred in passing an order u/s 144 of the Act without considering the facts before him; iii. Not appreciating that the Appellant had filed responses to his earlier notices as admitted by him and only for non-response to the final notice (which also remained to be communicated to the concerned consultant) the order was passed ex-parte without even considering the merits of the case; and; iv. Passing the order without affording a fair, reasonable and sufficient opportunity of being heard to the Appellant: 2.3 In the facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) deserves to be quashed and set aside and it is prayed accordingly. ON MERITS: 3.1 In the facts and circumstances of the case and in law, the Ld. CIT(A), erred in confirming the addition of Rs.94,28,953/- made by the Ld. AO u/s 69A whereby the entire credits in the bank account of the Appellant were added in contravention of the extant law. 3.2 While doing so, the Ld. CIT(A) as well as the Ld. AO failed to appreciate that: Section 69A is not at all applicable in the present case and the same is wrongly invoked, 3 The Ld. AO has grossly erred in first initiating a re-assessment contrary to the Act and thereafter making the addition of all credits in the bank account for the past three four years invoking the provisions of section 144 of the Act; The majority of the credits pertain to earlier or subsequent years and could not be charged to tax in the relevant year. iv. The Ld. AO failed to appreciate that the Appellant is not conversant with the online/faceless proceedings and therefore due to lack of guidance she could not respond to the Notices issued by the Ld. AO; The additions made by the Ld.AO are based on mere assumptions presumptions, surmises and conjectures and therefore unsustainable; vi Even otherwise the additions are contrary to the provisions of the Act and therefore unsustainable; 3.3 In the facts and circumstances of the case and in law, the additions made by the Ld. AO and as confirmed by the Ld. CIT(A) deserves to be deleted.
Without prejudice to the above, in the facts and circumstances of the case and in law, the Ld. AO erred in taxing the additions u/s 115BBE of the Act without appreciating that the said section was introduced to check evasion of tax and the same are not applicable in the facts of the present case.
The Appellant craves leave to add, amend, alter, delete or modify all or any the above grounds at the time of hearing.” Findings and Analysis: 2. We have heard both the parties and perused the records. In this case, as mentioned in the Assessment Order, Assessee is an Individual and had not filed Return of Income for A.Y.2019-20. The Assessing Officer issued notice u/s.148A(b) of the Act, on 25.01.2023. Assessee failed to file any reply. The Assessing
A notice u/s.148 was issued on 16.03.2023. Assessee failed to file any reply, accordingly, an Ex-parte Assessment Order was passed determining the total income of the Assessee at Rs.94,28,953/-. Aggrieved by the assessment order, Assessee filed appeal before the ld.CIT(A). The Assessee raised Legal Grounds before ld.CIT(A). The grounds of appeal
raised by the assessee before the ld.CIT(A) as reproduced by ld.CIT(A) are as under : “1. On the facts and in the circumstances of the case and in law the Assessment Order is invalid an bad in law.
2. On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law in as much as the notice ul 5148A(b) was issued in respect of information of cash deposits of Rs 15,000/-whereas the order u/s 148A(d) has been passed for escapement of income in respect of cash withdrawal of Rs 22,00,000/- & the order u/s 147 has been passed making addition of Rs 94,28,953/- being credits to the bank account
3. On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law in as much as the notice u/s 148 has been issued by the Jurisdictional Assessing Officer in violation of CBDT Notification No. 18/2022 dated 29/03/2022, 4 On the facts and in the circumstances of the case and in law the Assessment order is valid and bad in win law in as much as the approval u/s not been provided along with the notice 151 of the Income Tax Act, 1961 has not been p u/s 148
5. On the facts and in the circumstances of the case and in law the Assessment Order is invalid and bad in law in as much as the assessment has been completed without application of mind and with a mechanical approval u/s 151 5
On the facts and in the circumstances of the case and in law and without prejudice to the above grounds of appeal
the Assessing Officer erred in assessing the total of appellant at Rs 94,28,953/-
7. On the facts and in the circumstances of the case and in law the Assessing Officer erred in making addition of Rs 25,00,000/- in respect of credits during AY 2019-20
8. On the facts and in the circumstances of the case and in law and without prejudice to the above grounds of appeal the Assessing Officer erred in making addition of Rs 2,90,300/- in respect of cash deposits.
9. On the facts and in the circumstances of the case and in law and without prejudice to the above grounds of appeal the Assessing Officer erred in making addition of Rs 66,38,653/- in respect of bank credits which do not pertain to A. Y. 2019-20.
10. The appellant seeks leave to add, alter, amend, delete etc the above grounds of appeal in the interest of natural justice. 3.1 However, ld.CIT(A) dismissed the appeal of the Assessee due to non-compliance following the decision of ITAT Delhi in the case of CIT Vs. Multiplan India Pvt. Ltd
38. ITD 320 (Del).
4. As per Section 250 of the Income Tax Act, it was mandatory for ld.CIT(A) to adjudicate the grounds of appeal raised by the Assessee. In this case, there are legal grounds, which could have been adjudicated by ld.CIT(A) by calling the details from Assessing Officer. However, ld.CIT(A) has not bothered to adjudicate the Grounds.
5. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) (Bombay)/[2017] 297 CTR 614 (Bombay) as under : Quote, “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 Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act.
Further Section 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. Section 251(1)(a) and (b) 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-section (2) of Section 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 Section 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 with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn.
Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer 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 7 Section 251(1)(a) and (b) and Explanation to Section 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.” Unquote. 5.1 Thus, the Hon’ble Bombay High Court has categorically held that ld.CIT(A) has to decide the appeal on merit and ld.CIT(A) does not have any power to dismiss appeal for non-prosecution.
6. In view of the above, in the interest of justice, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall provide opportunity to the assessee. Assessee shall file all the necessary documents before the ld.CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 19 September, 2025.