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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 30.01.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi ["CIT(A)"] pertaining to Assessment Year (“AY”) 2016-17. 2. The assessee has raised the following grounds of appeal:- “1] The learned CIT(A) erred in dismissing the appeal in limine and thereby confirming the addition of Rs.1,18,18,341 made by the A.O. in the asst. order u/s 147 by disallowing entire purchases made from M/s. Kasturi Commodities Pvt. Ltd. without appreciating that there was a reasonable cause due to which the notices issued by the CIT(A) could not be complied with and hence, the dismissal of appeal on ex-parte basis was not justified. 2] The learned CIT(A) erred in dismissing the appeal in limine without passing any speaking order on merits adjudicating the various grounds of appeal, which were supported by the statement of facts and replies filed before A.O. which were reproduced in the asst. order u/s 147, without appreciating that such dismissal of appeal for non prosecution was not justified in view of the law laid down by Hon'ble Juri ictional Bombay High Court in Premkumar Arjundas Luthra [(2017) 297 CTR 614] and hence, the said appeal may be restored to the file of the CIT(A) in the interest of justice. 3] Without prejudice to the above grounds, it is submitted that the notice u/s 148 issued on the basis of search action u/s 132 conducted on a third party is bad in law since the special provisions of section 153C were attracted in this case and therefore, the asst. proceedings initiated by relying on the general provisions of section 147 of the Act were not sustainable in law. 4] Without prejudice to the above grounds, the appellant submits that the notice u/s 148 issued in this case without following the pre conditions stipulated under the provisions of section 148, 149 and 151, may be declared as null and void in law. 5] Without prejudice to the above grounds, the appellant submits that the purchases of Rs.1,18,18,341 made from M/s. Kasturi Commodities Pvt. Ltd. were supported by various documentary evidences referred by the A.O. in the asst. order including stock records and the said purchases constituted around 20% of the total sales made during this year and therefore, there was no reason to doubt the genuineness of the above purchases when the corresponding sales were accepted by the A.O. 6] The appellant submits that in response to the notice u/s 131 dated 02.05.2023 issued by the A.O., M/s. Kasturi Commodities Pvt. Ltd. had in fact furnished its response electronically to the A.O. on 24.05.2023 confirming the genuineness of impugned sales made to the appellant and therefore, the action of the A.O. in disallowing the impugned purchases was not justified. 7] The learned CIT(A) failed to appreciate that the appellant had furnished various documentary evidences in support of the impugned purchases whereas the A.O. had not confronted any seized documents or statements which were relied upon by him to doubt the genuineness of the said purchases nor did the A.O. grant an opportunity of cross examination of the said party in spite of specific written request, and hence, the above addition made by the A.O. merely by relying on information uploaded on insight portal was justified in law and on facts of the case. 8] The appellant craves leave to add/alter/ amend any of the grounds of appeal."
Briefly stated the facts are that the assessee is a partnership firm. For AY 2016-17, the assessee filed its original return of income on 13.09.2016 declaring loss of Rs.8,23,378/-. Thereafter, the case of the assessee was reopened by issue of notice u/s 148 of the Income Tax Act, 1961 (the “Act"). In response to the said notice, the assessee filed its return of income on 24.08.2022 declaring total loss of Rs.8,23,378/-. The Ld. Assessing Officer ("AO") completed the assessment u/s 147 r.w.s.144B of the Act on 18.05.2023 by making addition of Rs.1,18,18,341/- on account of bogus purchases made from one party, namely, Kasturi Commodities Pvt. Ltd.
Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC who dismissed the appeal of the assessee for non-prosecution of the case before him without going into the merits of the case placing reliance on the decision of the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and another reported in 118 ITR 461 (SC) and Honble Bombay High Court in the case of M/s. Chemipol Vs. UOI in Excise Appeal No. 62 of 2009 by observing as under : “5.2 As has been brought out above, it is evident and clear that the appellant is not interested in filing any details during the appellate proceedings and avail the opportunity under the principle of natural justice. No any written submissions were filed. In such situation, the only conclusion which can be drawn is that the appellant is not interested in pursuing the appeal.
3 It has been held by the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another (118 ITR 461) (at pages 477 & 478) 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 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.
4 Furthermore, 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/penalized, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so.
5 It is, thus, evident that the appellant has no evidence to substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to, therefore, go through the extremely brief non-speaking submission appearing in the grounds of appeal and statement of facts filed along with the impugned appeal to decide on the merits while adjudicating the same. But the narrative submission/contention made vide the statement of facts/grounds of appeal is by and large on the very same made at the time of instant assessment which the AO after considering, has duly rejected or found without much merit leading him/her to add the same i.e., the disallowance/additions made in the said assessment order and enumerated in the impugned grounds against which I am constrained to concur with the AO's findings of fact and decisions thereof, more particularly in the absence of any meaningful and worthwhile submissions/documentations even during the instant appellate proceedings in this case to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order.
6 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions/disallowances made by the AO is sustained in terms of the observations herein-above.
In the result, the appeal of the appellant is dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. Counsel for the assessee submitted that non-compliance before the Ld. CIT(A)/NFAC was not intentional but occurred due to certain unavoidable circumstances beyond the control of the assessee. 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 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) to decide all the issues raised by the assessee before him afresh 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. 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 Ld. Representatives of the parties and perused the material available on record. The impugned order has been passed by the Ld. CIT(A) ex-parte qua assessee. Before the Ld. CIT(A)/NFAC there was non- compliance of notice(s) of hearing and the Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsing the findings of the Ld. AO. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details/documents before the Ld. CIT(A)/ NFAC and therefore he has requested for remand of the matter to the file of the Ld. CIT(A) for fresh adjudication on merits of the case. The appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision in the case of CIT Vs. B.N. Bhattacharjee and Another (supra) and other cases cited therein and dismissed the appeal of the assessee for want of prosecution. 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. We observe that the Ld. CIT(A) has passed the order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
Considering the totality of facts and in the circumstances of the case enumerated above, without going into the merits of the appeal, we deem it proper, in the interest of justice, to set aside the order of the Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per fact and law after allowing one final opportunity of being heard to the assessee. The assessee is also hereby directed to provide the requisite support in terms of submitting the relevant documents/ evidence as may be required/called upon on the appointed date and make his submissions without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/ NFAC shall be at liberty to pass appropriate order as per law. We direct and order accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 12th August, 2025. (R.K. Panda) VICE PRESIDENT (Astha Chandra) JUDICIAL MEMBER पुणे / Pune; दिनांक / Dated : 12th August, 2025. रवि आदेश की प्रतिलिपि अग्रेषित /