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Facts
The assessee filed an appeal against the order of the Addl./Joint Commissioner of Income Tax(A), Kanpur. The assessment order under section 144 r.w.s 147 of the Income Tax Act, 1961, was passed without affording a proper opportunity of being heard and without considering the return of income filed by the assessee. The CIT(A) dismissed the appeal in limine without deciding on merits.
Held
The Tribunal held that the CIT(A) dismissed the appeal without deciding on merits and without considering the remand report. The Tribunal relied on the Bombay High Court's decision stating that the CIT(A) cannot dismiss an appeal for non-prosecution.
Key Issues
Whether the CIT(A) erred in dismissing the appeal in limine without deciding on merits, especially when the AO had passed the assessment order without affording proper opportunity and without considering the filed return.
Sections Cited
250, 144, 147, 148, 139(1), 153(2), 44AD, 46A, 251(1)(a), 251(1)(b), 251(2), 246A, 250(4), 250(6)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the assessee directed against the order of ld.Addl./Joint Commissioner of Income Tax(A), Kanpur passed under section 250 of the Income Tax Act, 1961 dated 18.10.2024 for the A.Y.2012-13 emanating from the Assessment Order under section 144 of the Income Tax Act, 1961, dated 09.03.2016. The Assessee has raised the following grounds of appeal : “1. That the Ld. AO erred in law and on facts in passing the assessment order under section 144 of the Income Tax Act, 1961, without affording a reasonable and proper opportunity of being heard to the Appellant, thereby violating the principles of natural justice. 2 Communication of "reasons to believe" for passing Assessment order under section 147 is Mandatory
3. That the learned AO failed to acknowledge and consider the valid return of income filed by the Appellant on 31/03/2013 under section 139(1), and therefore the initiation of reassessment under section 148 was without proper foundation and void ab initio.
4. That the reassessment order passed under section 147/144 is illegal and unsustainable in law as the reasons recorded were never communicated to the Appellant, contrary to settled legal principles and precedents.
5. That the reassessment proceedings were barred by limitation as per the provisions of section 153(2) of the Act, and hence, the assessment framed on 09/03/2016 is time-barred and bad in law That the addition of Rs. 17,58,000/- towards unexplained cash deposits is unjustified, arbitrary and based on conjectures, particularly when the Appellant's gross receipts were already disclosed in the return filed under presumptive scheme u/s 44AD
7. That the learned CIT(A) erred in passing an ex parte appellate order without appreciating that the Appellant had filed written submissions manually on 14/02/2018 and 01/01/2020, and the non-consideration of these submission is a violation of natural justice.
8. That the CIT(A) failed to appreciate the incorrectness of system data regarding communication windows and failed to verify the record of manual filing and physical compliance by the Appellant.
9. The Appellant craves leave to add, amend, alter, or withdraw any of the aforesaid grounds of appeal at the time of hearing.
Submission of ld.AR : 2. Earlier, the Assessee’s case was scheduled for hearing for 14.07.2025. On 14.07.2025, no one appeared on behalf of the Assessee. Accordingly, the Bench adjourned the case to 07.08.2025. A separate notice was sent to the Assessee on the Email Id: bmslawassociates@gmail.com mentioned in the Form No.36 filed by the Assessee.
2.1 Now on 07.08.2025, at the outset of hearing, no one appeared on behalf of the assessee. No adjournment letter filed.
Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A).
Findings & Analysis : 4. We have heard ld.DR for the Revenue and perused the records. In this case, Assessee has filed this appeal before this Tribunal against the order of ld.Addl./Joint Commissioner of Income Tax(Appeal) u/s.250 of the Act, for A.Y.2012-13 passed on 18.10.2024. In the Form No.36, Assessee has declared his Email Id in the Column personal information of the appellant, as under : bmslawassociates@gmail.com 4.1 Thus, Assessee suo-moto declared the above Email Id as his own Email Id in the Form No.36. Accordingly, this Tribunal has served the notices on the assessee on the above referred Email Id.
As per the assessment order, Assessee has not filed any Return of Income for A.Y.2012-13. The Assessing Officer-ITO, Nanded had received information that Assessee had deposited Rs.17,58,000/- in the Saving Bank Account maintained with IDBI Bank, Nanded. The ITO, Ward-3(1), Nanded issued a notice u/s.142(1) to the Assessee, but Assessee failed to comply. Then, the ITO, Ward-3(1), Nanded issued a notice u/s.148 dated 06.06.2014 which was served on 09.06.2014. Assessee did not file any Return of Income in response to notice u/s.148 of the Act. The ITO subsequently issued various notices and a show cause notice. However, none of the notices were complied. The ITO obtained copy of Bank Statement from IDBI Bank, Nanded for F.Y.2011-12 and noted that cash amounting to Rs.17,58,000/- was deposited. Since there was no compliance by the Assessee, the Assessing Officer passed an order u/s.144 r.w.s 147 of the Act, dated 09.03.2016 assessing the total income at Rs.17,58,000/-.
Aggrieved by the Assessment Order, the Assessee filed appeal before the ld.CIT(A) in Form No.35 on 14.02.2018 manually. The copy of the acknowledgment dated 14.02.2018, having signature of [A] the Clerk of ld.CIT(A)-Aurangabad with a stamp has been filed by the Assessee along with Form No.36.
It is noted that Assessee had filed a written submission before the ld.CIT(A). Ld.CIT(A)-1, Aurangabad vide his letter dated 15.03.2018 called-for a remand report from ITO, Ward-1, Nanded. The scanned copy of the said letter is as under :
7.1 However, the Addl./JCIT(A)[NFAC] passed an order u/s.250 of the Income Tax Act, for A.Y.2012-13 on 18.10.2024 dismissing appeal of the Assessee in limine. The relevant paragraph 2.1, 2.2 and 3 are reproduced here as under :
“2.1. From the above, it is quite clear that despite being provided with ample opportunities, the appellant has failed in compliance with the notices issued by this office. Hence, it is apparent that appellant is not interested in pursuing this appeal. Hon'ble Supreme Court has also observed in the case of CIT vs. B.Ν. Bhattacharya (118 ITR 461) that "preferring an appeal means more than formally filing it but effectively pursuing it". It means, if the appellant is not pursuing the appeal without any reasonable cause, it may be presumed that he/she/it may not be interested in taking the issue seriously before the appellate authority or he/she/it may not be able to substantiate the grounds taken in the appeals. 2.2. Under these circumstances, I am compelled to believe that the appellant has nothing to substantiate its contention or submit against the addition made by the A.O. The same is, therefore, confirmed.
In the result, the appeal is dismissed.”
The grounds of appeal raised before the ld.CIT(A) as per Form No.35 are as follows :
1) That no reasonable and proper opportunity of hearing has been allowed by the Id. A.O. before passing the Assessment Order u/s 144 of the IT Act 2) The learned Assessing Officer erred to uphold the addition of Rs. 17,58,000/- made to the income of appellant of the income tax act on account of cash deposit in the Bank. 3) That under the facts and circumstances, there is absolutely no justification in law as well as on merits in making and sustaining an adhoc addition of Rs. 17,58,000/- due to non-submission of Return. 4) Appellant has been filed Income tax Return u/s 139 (1) on dated 31/03/2013 and declared Gross profit of Rs. 18,56,210/-. 5) The following observations of the learned Assessing officer are incorrect- a) There is no sufficient cause put forward by the appellant that prevented him from attending the assessment proceedings.
Ld.CIT(A) has not decided the ground of appeal raised by assessee on merits. Before the ld.CIT(A), Assessee has raised a Ground that Assessee had filed Return of Income u/s.139(1) of the Act, on 31.03.2013. However, Assessing Officer in the Assessment Order has stated that No Return of Income has been filed.
10. In this case, ld.Addl./JCIT(A) has dismissed the appeal of the assessee in-limine, however, there is no discussion of the remand report which was called by ld.CIT(A)-1, Aurangabad vide his letter dated 15.03.2018 which we have already reproduced above. Thus, the Addl./JCIT(A) has not bothered to verify the actual Form No.35, Submissions filed manually before the ld.CIT(A) and remand report. This shows the callous attitude Addl./JCIT(A) in deciding the appeal without verifying facts.
11. 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 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 [A] law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.” Unquote.
11.1 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 u/s.250 of the Act 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.