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Facts
The assessee filed an appeal against the order of the CIT(A), NFAC, who dismissed the appeal without discussing the merits, as the assessee failed to comply with notices. The CIT(A) had issued four notices, which the assessee failed to comply with.
Held
The Tribunal held that the CIT(A) does not have the power to dismiss an appeal for non-prosecution, citing a Bombay High Court judgment. The CIT(A) is obliged to decide the appeal on its merits after providing an opportunity to the assessee.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding it on merits, and whether the assessee was given sufficient opportunity to be heard.
Sections Cited
250, 143(3), 144B, 246A, 251(1)(a), 251(1)(b), 251(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year: 2018-19 Electronica Finance Limited, V The DCIT, “Audumber”, 101/1, s Circle-1(1), Pune. Erandwane, Dr.Ketkar Road, Pune – 411004. PAN: AAACE4577B Appellant/ Assessee Respondent / Revenue Assessee by Shri Kishor B Phadke – AR Revenue by Shri Ramnath P Murkunde – DR Date of hearing 22/04/2025 Date of pronouncement 24/04/2025 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 19.12.2023 for Assessment Year 2018-19. The assessee has raised the following grounds of appeal :
“1. The learned CIT(A), NFAC erred in law and on facts in confirming the total income at Rs.34,61,09,145 instead of returned income of Rs.31,11,65,380/- 2. The learned CIT(A), NFAC erred in law and on facts in not providing sufficient reasonable opportunity of being heard to the appellant to submit the details / information. Appellant contends that, Appellant is keen to ensure complete and total compliance as so required, and the present situation is simply a fall-out of communication gap.
The Learned CIT(A), NFAC erred in law and on facts in confirming the disallowance towards contribution to the employee's Group Gratuity Scheme of Rs.22,75,579/-being unapproved. Appellant contends that, appellant has already filed an application for approval of the Scheme before the Commissioner of Income Tax (CIT) along with all requisite documents. However, approval of the scheme has not been yet received.
4. The learned CIT(A) has erred in the law in confirming the addition on account of interest paid on TDS of Rs. 5,69,489/- Appellant contends that the said interest on TDS ought not to be taxed being compensatory in nature and not penal. The said interest has not been claimed as expenditure during the year 5. The Learned I-T authorities erred in law and on facts, by considering the gross amounts of the "EMIs" as reflected in Form 26AS. The Learned I-T authorities ought to have appreciated that the Appellant's role in the transaction is merely intermediary in nature, facilitating the transaction between the third-party customer and SIDBI and appellant does not receive the entire EMI amount but instead retains only a commission, while the balance amount is directly paid to SIDBI.
6. Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal
.” Facts of the case :
2. In this case, assessment order u/s.143(3) r.w.s. 144B was passed on 22.04.2021. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A). Ld.CIT(A) dismissed the appeal of the assessee without discussing the merits of the case as Assessee failed to comply the notices.
2.1 Aggrieved by the order of the ld.CIT(A), Assessee filed appeal before this Tribunal.
Findings & Analysis : 3. We have heard both the parties and perused the records. It is observed that ld.CIT(A) had issued four notices and assessee failed to comply the notices. Therefore, ld.CIT(A) dismissed the appeal of the assessee without discussing the grounds raised by the assessee.
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) asunder : 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 law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.” Unquote.
4.1 Thus, Hon’ble Bombay High Court has categorically held that ld.CIT(A)[NFAC] has to decide the appeal on merit and ld.CIT(A)[NFAC] does not have any power to dismiss appeal for non-prosecution.
In these facts and circumstances of the case, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication after providing opportunity to the assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 24th April, 2025.