Loading judgment…
Facts
The assessee's appeal was dismissed by the CIT(A) without deciding the grounds on merit, attributing it to non-compliance. The assessee had raised grounds challenging the addition made by the AO under Section 69A, which the CIT(A) had confirmed.
Held
The Tribunal held that the CIT(A) has the power and obligation to decide appeals on merit and cannot dismiss them for non-prosecution, citing a High Court judgment. Therefore, the order of the CIT(A) was set aside for denovo adjudication.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-compliance without adjudicating on the merits of the grounds raised.
Sections Cited
250, 69A, 44AD, 246A, 251(1)(a), 251(1)(b), 251(2)
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961; dated 10.02.2025 for Assessment Year 2017-18. The assessee has raised the following grounds of appeal :
1. On the facts and circumstances prevaling in the case, the Hon'ble Commissioner of Appeal (NFAC) has erred in confirming the addition [A] of Rs. 13,60,053/- u/s 69A made by the Id. AO without justifying the rejection of the total sales of Rs. 28,15,000/- even though there were supporting purchase vouchers and sale bills of the items traded in regard to Rajasthani Masala and boutique items. The addition made of Rs. 13,60,053/- may kindly be deleted.
2. On the facts and circumstances prevaling in the case, the Hon'ble Commissioner of Appeal (NFAC) has erred in confirming the addition of Rs. 7,09,929/- and Rs. 6,50,124/-u/s 69A made by the ld. AO rejecting the profit shown at 18.04% declared u/s 44AD, presumtive income, which deserved to be deleted. The claim of the revenue that the opening and closing balances are not tallied with the earlier years return of income, as a matter of facts the appellant did not maintain the books of account and return is filed on presumtive basis the difference located of Rs. 7,09,929/- and Rs. 6,50,124/- (Total Rs. 13,60,053/-) is not legally sustainable. Here, it is worth to submit that according to special provisions of Section 44AD there is exemption from maintenance of books of account has been provided. The base of tentative Balance Sheet attached in the return cannot be treated as confirmed figures to be used for assessment purpose. It is requested to kindly delete the addition.” 2. The ld.Authorised Representative(ld.AR) for the Assessee submitted that assessee’s appeal was dismissed by the ld.CIT(A) without discussing each and every ground and merits of the case and merely dismissed for non-compliance. Hence, ld.AR requested for one more opportunity of being heard to the assessee.
Submission of ld.Departmental Representative(ld.DR) : 3. The ld.DR for the Revenue relied on the order of Assessing Officer(AO) and ld.CIT(A)[NFAC]. [A] Findings & Analysis : 4. We have heard both the parties and perused the records. It was observed that as per Form No.35, Assessee has raised the following grounds of appeal before the ld.CIT(A) : “On the facts and in the prevailing circumstances of the case and in law, LD A.O. has erred in making the addition of Rs.650000/- + 709929/- = Rs.1360053/- on being not satisfied as there are no such opening stock of cash and stocks were available to the assessee. The A.O.'s, view is not correct and justifiable for the reason that the appellant is exempted from the maintenance of books of account as per the special provisions of Sec.
44. AD of the I.T. Act and therefore, the addition made by the A.0. cannot sustained.
Further, at the best the addition could have been made at Rs.60344/- which is 08% of the sales affected from such opening cash balance and opening stock. In view of the above it is requested that the addition made by the A.O. may kindly be deleted on the basis of the submission, being made during the course appellate proceedings obliged.”
4.1 It is observed from the order of the ld.CIT(A)[NFAC] that the ld.CIT(A)[NFAC] did not decide the grounds of appeal on merit, but merely dismissed the appeal of the assessee. The ld.CIT(A) has not adjudicated grounds raised by the assessee on merits. [A] 4.2 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 [A] 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.
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.