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Facts
The assessee's appeal was dismissed by the CIT(A) solely on the grounds of non-compliance and lack of perceived interest in pursuing the appeal, without adjudicating the grounds on merit. The assessee contended that an adequate opportunity for being heard was not granted and that the addition made was erroneous.
Held
The Tribunal held that the CIT(A) has the power to confirm, reduce, enhance, or annul an assessment and is obliged to decide an appeal on its merits, not dismiss it for non-prosecution. The Tribunal relied on a Bombay High Court judgment to support this.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding the merits of the case, and if adequate opportunity was provided to the assessee.
Sections Cited
250, 69A, 148, 151A, 148A, 147, 246A, 251
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
Assessee by CA-Dhiraj Dandgaval(Virtual) Revenue by Shri Ratnakar Shelake- Addl.JCIT(DR) Date of hearing 28/04/2025 Date of pronouncement 29/04/2025 आदेश/ 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 25.02.2025 for Assessment Year 2018-19. The assessee has raised the following grounds of appeal :
1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre has erred in dismissing the appeal preferred by the assessee under the impression that the assessee is not keen on pursuing the appeal
2. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal), NFAC has erred not granting an adequate opportunity of being heard to the assessee
3. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal), NFAC has erroneously upheld the addition made by the Assessing Officer of Rs. 13.48.200/- being unexplained money u/s 69A of the Income Tax Act, 1961 in the hands of the assessee.
On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal), NFAC is not justified in denying that the amount credited in the account with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. Of Rs. 13,48,200/- is from business receipts only.
On the facts and in the circumstances of the case and in law the Assessing officer is not justified in not accepting the Gross Profit (ie. Rs. 98,688/-) offered to tax by the assessee during the reassessment proceedings on the amount deposited in Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. ie. Rs. 13,48,200/-
On the facts and in the circumstances of the case and in law the Assessing officer has erred in not following the principal used in reassessments of preceding two years wherein the gross profit percentage has been accepted on the amounts deposited in account with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd.
On the facts and in the circumstances of the case and in law the jurisdictional AO (JAO) erred in assuming jurisdiction by issuing notice u/s 148 of the ITA, 1961 as the same is not in accordance with provisions of section 151A of ITA, 1961. Appellant contends that, as per CBDT Notification issued under section 151A of ITA, 1961, notice u/s [A] 148 of ITA, 1961 ought to have been issued by National Faceless Assessment Center (NFAC) and not by JAO and the same has also been upheld in the recent pronouncement in case of Hexaware Technologies Limited v/s ACIT (Bombay HC- 162 taxmann.com 225). As such, the appellant contends that the present reassessment proceedings are bad in law and ought to be quashed.
On the facts and in the circumstances of the case and in law The learned Jurisdictional AO erred in issuing notice u/s 148A(b) of ITA, 1961 without making adequate enquiry as required as per the provisions of section 148A(a) of ITA. 1961 and thereby order passed u/s 148A(d) and subsequent order u/s 147 of ITA 1961 is bad in law.
Alternatively, On the facts and in the circumstances of the case and in law another opportunity may be granted to the assessee to appear before the Learned Commissioner of Income Tax (Appeals) NFAC in the interest of natural justice.
Assessee seeks permission to add, amend, withdraw, or delete above ground/s of appeal in the interest of natural justice during the appellate proceedings.”
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].
Findings & Analysis : 4. We have heard both the parties and perused the records. 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 for non-compliance. The ld.CIT(A) has not adjudicated grounds raised by the assessee on merits.
4.1 It is observed that the ld.CIT(A) vide its order dated 25.02.2025 has dismissed appeal of the assessee as under : “5.4 In view of the above, it is clear that the Appellant is not aggrieved with the assessment order impugned herein and is not interested in persuading the same. Accordingly, the additions/disallowarices as challenged in the Grounds of A hereby confirmed. in the Grounds of Appeal and in the Appeal Memo are hereby confirmed.
5.5 Based on the above it appears that the assessee is not keen on pursuing the appeal. Accordingly, given that this office has not received any information or document so as to make a judgment based on merits, this office is left with no option but to dismiss this appeal. Accordingly, the appeal of the assessee stands dismissed.”
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.
5. 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.