DHAVALKUMAR DHULAPPA GAT,BENGALURU vs. ASSESSMENT UNIT INCOME TAX DEPARTMENT, NEW DELHI

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ITA 2244/PUN/2024Status: DisposedITAT Pune30 April 2025AY 2015-164 pages
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What did the Tribunal hold?

The Tribunal held that while an appeal can be decided ex-parte for non-prosecution, the CIT(A) must adhere to the legislative mandate under Section 250(6) of the Act, which requires stating the points for determination, the decision thereon, and the reasons for the decision. The Tribunal observed that the CIT(A) had passed the order in concurrence with the Assessing Officer's order without independently examining the merits of the case. Therefore, the CIT(A)'s order was found to be in violation of Section 250(6) of the Act. In the interest of justice and fair play, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file for fresh adjudication on merits, after affording a reasonable opportunity of being heard to the assessee. The assessee was directed to provide necessary support and evidence without seeking adjournments, failing which the CIT(A) would be at liberty to pass an appropriate order. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, an individual and non-resident employed abroad, filed an appeal against the order dated 21.08.2024 of the CIT(A)/NFAC, Delhi, for Assessment Year 2015-16. The Assessment Unit had initiated reassessment proceedings under Section 148 and made additions totaling Rs. 25,76,486/- under Section 69A for purchase of mutual funds (Rs. 9,00,000), transfer of immovable property (Rs. 8,25,000), and credit card bills (Rs. 8,51,486), along with interest income of Rs. 13,749/-. The assessee's appeal before the CIT(A) was dismissed for non-prosecution due to non-compliance with hearing notices, with the CIT(A) endorsing the Assessing Officer's findings without addressing the merits. The assessee is now appealing this dismissal to the ITAT.

What were the issues?

1. Whether the CIT(A) erred in dismissing the assessee's appeal for non-prosecution, thereby confirming the additions made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, without considering the merits of the case? Assessee's contentions: The assessee argued that non-compliance with notices from the Assessing Officer and CIT(A) was unintentional, as emails went into the spam folder. The assessee claimed to be in a position to substantiate its case before the CIT(A) if given an opportunity, by filing requisite submissions and documentary evidence. The assessee prayed for the matter to be restored to the CIT(A)'s file for a fresh decision on merits. Revenue's contentions: The Departmental Representative (DR) had no objection to the assessee's request for restoration.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(2),Section 142(1),Section 69A,Section 250(6)

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

आदेश / ORDER

PER ASTHA CHANDRA, JM :

1.

The appeal filed by the assessee is directed against the order dated 21.08.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2015-16.

2.

The assessee has raised the following grounds of appeal :

1. The order of the learned Commissioner of Income tax (Appeals) [CIT(A)] confirming the order of the learned assessing authority (AU) treating the following payments as income under section 69A is incorrect: Purchase of mutual funds Transfer of immovable property 9,00,000 Credit card bills 8,25,000 8,51,486 25,76,486

2. In the grounds of appeal furnished before the learned CIT(A), the appellant had explained/furnished: (a) The source of funds for the investment of Rs. 900,000 (b) Mutual Fund name (c) Mutual fund statement

(d) Bank statement extract (e) Property sale/reinvestment particulars and part payment details of Rs. 825,000 3. The learned CIT(A) has overlooked the submissions made by the appellant in the grounds of appeal and dismissed the appeal on the ground that no written submissions were made at the time of the hearing.

4. Prayer: The appellant humbly prays before the Hon'ble Income tax Appellate Tribunal that the: (a) the addition of Rs. 17,25,000 in the order of the learned CIT(A) be set aside based on the factual information furnished; (b) the Appellant further craves leave and reserves its right to vary, amend, alter and/or add to the grounds of appeal and to produce such oral and documentary evidence and file such compilation of documents as may be necessary at the time of hearing of the appeal. Considering the above factual and legal submissions, the appellant prays that the addition of Rs.17,25,000 treated as unexplained money under section 69A be deleted and the appellant’s appeal be allowed and the interest and penalty be dropped.”

3. Briefly stated, the facts of the case as carved out from the statement of fact filed by the assessee are that the assessee is an individual who is a non-resident since the year 2015 and has been employed with MNE’s based out of the USA and South Korea. For AY 2015-16, reassessment proceedings were initiated u/s 148 of the Income Tax Act, 1961 (the “Act”) and accordingly, statutory notice(s) u/s 143(2)/142(1) of the Act were issued and served upon the assessee. Post filing the return of income and reply to the show cause notice as well as verification of the some submissions made by the assessee, the Assessment Unit, Income Tax Department (“AO”) completed the assessment vide order dated 28.05.2023 by making addition u/s 69A of the Act in respect of : (i) purchase of mutual funds of Rs.9,00,000/-; (ii) transfer of immovable property of Rs.8,25,000/- and (iii) credit card bills of Rs.8,51,486/- aggregating to an amount of Rs.25,76,486/- and interest income of Rs.13,749/-.

4. Aggrieved, the assessee filed appeal before the Ld. CIT(A)/NFAC challenging the above additions made by the Ld. AO. 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 in the absence of any meaningful and worthwhile submissions/documentation furnished by the assessee.

5.

Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

6.

The Ld. AR submitted that the assessee’s non-compliance to the notice(s) issued by the Ld AO/CIT(A) was not intentional as the emails went into the spam box. He submitted that given an opportunity the assessee is in a position to substantiate its case before the Ld. CIT(A) by filing the requisite submissions/ documentary evidences in support of his various grounds of appeal raised before the Ld. CIT(A). He therefore prayed that the matter may be restored to the file of the Ld. CIT(A) to decide the impugned issues afresh on merits after affording an opportunity of being heard to the assessee.

7.

The Ld. DR had no objection to the above request of the Ld. AR.

8.

We have heard the Ld. Representatives of the parties and perused the material on records. The appellate order reveals that the Ld. CIT(A) has applied the decision in the case of CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and various other cases cited therein and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite 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 the 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.

9.

On the facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC, Delhi and restore the matter back to his file for adjudication afresh and pass speaking order on merits after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon without seeking adjournment under any pretext unless for sufficient cause, failing which the Ld. CIT(A) shall be at liberty to pass appropriate order as per law. We order accordingly.

10.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 30th April, 2025.

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