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Facts
The assessee's appeal was dismissed by the CIT(A) for non-compliance, confirming the assessment order passed under Section 144 of the Income Tax Act. The assessee contended that the assessment order was bad in law and against principles of natural justice due to insufficient opportunity and arbitrary observations.
Held
The Tribunal held that the CIT(A) is legally obligated to decide appeals on merit and cannot dismiss them for non-prosecution. The order of the CIT(A) was set aside for de novo adjudication, and the appeal was allowed for statistical purposes.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution instead of adjudicating it on merits, and whether the original assessment order was passed in violation of natural justice principles.
Sections Cited
144, 250, 251, 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
Assessment Year: 2017-18 Mr.Narayan Chunilal Jaiswal, V The Income Tax Officer, Ayodhya Nagar, s Ward-2(1), Jalgaon. Varangaon-425307. PAN: ACWPJ1153H Appellant/ Assessee Respondent / Revenue Assessee by None Revenue by Shri Ambarnath Khule - JCIT(DR) Date of hearing 04/09/2025 Date of pronouncement 09/09/2025 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 for A.Y.2017-18 dated 22.01.2025 emanating from the Assessment Order under section 144 of the Income Tax Act, 1961. The Grounds of appeal raised by the Assessee are as under : “The assessment order passed by the Id. AO and confirmed by the Id. CIT(A). NFAC, is bad and void ab initio and also against the principles of natural justice.
1. Whether on the facts and in the circumstance of the case and in law, the Id. CIT(A), NFAC is right in confirming the assessment order passed manually by the JAO, on 25.12.2019, after introduction of E- assessment Scheme-2019, effective from 12.09.2019.
2. The impugned assessment order passed by the AO manually is invalid in law as it violates the well-established principles of natural justice. From the assessment order table 2, page 3, the AO confirmed that only two notices dtd. 12.03.2018 for compliance on 16.03.2018, granting time of 3 days and another notice dtd. 26.07.2019 for compliance on 31.07.2019, giving 4 days time was granted. Thus, the AO has not granted sufficient and reasonable opportunity to place all the material before him.
The AO has erred on facts and in law in making unwarranted and sweeping observation in the assessment order as per page No. 8, that "the opening cash balance of Rs. 18,25,972/-, shown by the assessee is not acceptable" and "assessee manipulated the details of his income and cash in hand" Such an unfounded presumption is without any legal foundation and thus, the impugned order is unsustainable in law. 4. The Id. CIT(A), NFAC, has not at all adjudicated on the plea/grounds taken in the "grounds of appeal
and statement of facts" i.e. the appellant is having sufficient opening cash balance in hand for the cash deposited during demonetisation period. The Id. CIT(A), NFAC, has also ignored the facts that the appellant assessee had supplied the copy of complete cash book to the JCIT, Jalgaon, during 144A proceedings of the Act.
5. On the facts and in the circumstances of the case and in law, the Id. CITIA), NFAC has merely echoed with the view of the AO in confirming the impugned assessment order and dismissed appeal on the grounds 1. The assessee has failed to respond at multiple occasion.
2. The appellant is not serious to pursuing his appeal
3. Constrained to uphold the addition for want of explanation as well as on merits too The merits of the grounds as per "grounds of appeal and statement of facts were not at all enquired and adjudicated, when it is conclusively settled by various judicial precedents, that with authority exercising appellate jurisdiction are mandatorily required to deal with the merits of the case even in ex parte proceedings.
The appellant prays before this Hon'ble Court to take judicious and holistic view of all the facts of the appellant's case. The appellant craves liberty to raise additional grounds, evidences and to modify/amend/delete the grounds of appeal at the time of hearing.”
2. At the outset of hearing, no one appeared on behalf of the assessee. No adjournment letter or written submission filed.
Submission of ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue relied on the Assessment Order.
Findings & Analysis : 4. We have heard ld.DR for the Revenue and perused the records. It is observed from the order of the ld.CIT(A) that the ld.CIT(A) did not decide the grounds of appeal on merit but merely dismissed the appeal of the assessee for non-compliance. The ld.CIT(A) has not adjudicated grounds raised by the assessee on merits.
4.1 The ld.CIT(A) during the appellate proceedings issued notices. Assessee failed to comply these notices. Therefore, ld.CIT(A) dismissed the appeal of the assessee and confirmed the assessment order.
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
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 clear from the 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.
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.
Delay: There was delay of 119 days in filling appeal before this Tribunal. We have studied the condonation petition-Affidavit and we are convinced that there was sufficient cause for delay. Hence, the Delay is condoned. Order pronounced in the open Court on 09th September, 2025.