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Facts
The assessee filed an appeal against the order of the ld.CIT(A) who dismissed the appeal ex-parte. The assessee contended that the CIT(A) erred by not providing proper opportunity of being heard and dismissed the appeal without discussing the merits.
Held
The Tribunal held that the CIT(A) has to decide the appeal on merits and does not have the power to dismiss an appeal for non-prosecution. The order of the CIT(A) was set aside.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding the merits, and if an opportunity of hearing should be provided to the assessee.
Sections Cited
250, 251, 246A
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
Assessment Year: 2017-18 Pravin Rajaram Thorat, V The Income Tax Officer, Karve Karad, Satara, s Ward-1, Satara. Maharashtra – 415110. PAN: AFMPT4673F Appellant/ Assessee Respondent / Revenue Assessee by Smt. Deepa Khare – AR Revenue by Shri Abhishek Meshram–Addl.CIT(DR) Date of hearing 13/02/2025 Date of pronouncement 18/02/2025 आदेश/ ORDER
PER DR. MANISH BORAD, AM:
This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] for Assessment Year 2017-18 dated 27.07.2022 passed u/sec.250 of the Income tax Act, 1961. The Assessee has raised the following grounds of appeal :
1. The ld.CIT(A) erred on facts and in law in dismissing appeal ex-parte when there was sufficient cause beyond control for non- compliance.
2. The CIT(A) erred on facts and in law in confirming addition of Rs.1235000 on account of unexplained money based on the cash deposit in assessee account.
The appellant craves leave to add, aler, modify or substitute any ground of appeal at the time of hearing.”
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 without providing proper opportunity of being heard. Hence, ld.AR requested for one more opportunity of being heard.
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 and Analysis : 3. 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 upheld the addition made by the Assessing Officer as assessee has not filed any reply before the ld.CIT(A). The ld.CIT(A) has not adjudicated grounds raised by the assessee on merits.
3.1 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.
3.2. 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) and restore it to the file of ld.CIT(A) for necessary adjudication in accordance with Law. Ld.CIT(A) shall provide proper 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 18th February, 2025.
Sd/- Sd/- (ASTHA CHANDRA) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 18th Feb, 2025/ SGR* आदेशक��ितिलिपअ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune.