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Facts
The assessee's appeal was dismissed by the CIT(A) for non-compliance without deciding on merits. The assessee argued they were not duly represented by their authorized representatives during assessment and appellate proceedings.
Held
The Tribunal held that the CIT(A) has no power to dismiss an appeal for non-prosecution and must decide on merits, citing the Bombay High Court. The order of the CIT(A) was set aside for de novo adjudication.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding on merits, and if the assessee should be given another opportunity to present their case.
Sections Cited
250, 246A, 251(1)(a), 251(1)(b), 251(2), 250(4), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year: 2016-17 Sachin Pandurang Alhat, V The Income Tax Officer, Flat No.202, Bld No.P6, A s Ward-10(2), Pune. Wing, Gandarwanagari, Pune – 412501. PAN:AHEPA6396E Appellant/ Assessee Respondent / Revenue Assessee by Shri Nikhil S. Pathak and Mrs. Arrchena Sheety Revenue by Shri Arvind Desai – Addl.CIT(DR) Date of hearing 10/03/2025 Date of pronouncement 10/03/2025 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 05.11.2024 for Assessment Year 2016-17. The assessee has raised the following grounds of appeal :
1. The Appellant has not been duly represented by his IIP in the course of Assessment Proceedings & have again not been duly represented by his CA & his Senior colleague before the CIT(A) Appellate Proceeding.
The Learned AO has failed to bring on record the facts available with her & as personally represented by the Appellant, further the AO was aware of the Co-Owners Assessments being undertaken in the same course of time whereby the Assessment have been accepted are re- opening u/s 148 has been dropped considering the Development Agreement on which AO has made the addition on Rs.22,20,555/- accordingly the Learned CIT had no occasion to decide on the merits of the case.
The Appellant had appointed his ITP to represent for the Assessment Proceedings & appointed a CA who had given his Appeal to his Senior Colleague. The Appellant has from time to time forwarded all the notices of Assessment & Appellate proceedings to his Authorized Representative, who have failed to Represent the Appellant.
The Appellant has Evidence to prove the Cash Deposited in his Bank A/c & Cash Credits & Also prove that the Consideration in the form of Constructed Area on which LTCG has been added, is not received & there is no accrual of Capital Gains. The Principle of Consistency is also applicable as none of the Co-Owners to the said Development Agreement dt. 10.7.15 have been charged with Capital Gains.
The Appellant prays for restoring the matter back to the 10 for proper verification of Evidence available with the Appellant with merits. Because the Appellant should not be suffering on account of reasonable opportunity for failure of his Authorized Representative & Justice should prevail & Appellant should not suffer due to fault & negligence of his Legal Representative.
The Appellant Craves Leave to add, Alter, or amend any of the Grounds of the Appeal, before or during hearing of the Appeal.”
Submission of ld.Authorised Representative(ld.AR) : 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. Ld.AR submitted that ld.CIT(A) had scheduled hearing on 02.08.2024. Ld.AR further submitted that Assessee had filed a request for adjournment. However, ld.CIT(A) has not considered the Adjournment Letter. Ld.AR filed copy of the said letter.
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 05.11.2024 has dismissed appeal of the assessee as under : “7………. It is clear from the discussion in para nos. 4 to 6 above that the appellant is not desirous of pursuing the grounds of appeal though more than adequate opportunities were provided. Under the circumstances, I have no other alternative but to dismiss the appeal following the ratio of the decision of the Hon'ble ITAT, Delhi Bench in the case of CIT Vs. Multiplan India Limited reported in 38. ITD 320 and also the decision of the Hon'ble MP High Court in the case of Estate of Late Tukhoji Rao Holkar Vs. CWT reported in 233 ITR 480, accordingly, all the grounds raised in this appeal as reproduced in para 2 supra are 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 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.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 10th March, 2025.