PARDEEP KUMAR,KAITHAL vs. INCOME TAX OFFICER, KAITHAL

It is noticed that , the assessment was framed by the Ld. AO ex parte under section 144 read with section 147 of the Act, whereby cash deposits appearing in the savings bank account of the assessee were treated as unexplained income.

Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A), who has sustained the addition primarily on account of non-compliance by the assessee.

None appeared on behalf of the assessee, however, it is noticed that the assessee was prevented by sufficient cause from producing the necessary documents and explanations before the lower authorities.

On the other hand, the Ld. DR opposed the request for remand by submitting that sufficient opportunities had already been afforded during the course of the assessment as well as the appellate proceedings and yet the assessee failed to avail the same. It was accordingly argued that the assessee cannot be permitted to fill in 2 the lacunae at this stage and that the order of the lower authorities deserves to be upheld.

We have carefully considered the matter. It is a settled proposition of law that the first appellate authority is duty-bound to dispose of the appeal on merits even in the event of non-appearance or default on the part of the assessee. We noticed that the lower authorities have dismissed the appeal without deciding the appeal on merits. In our considered opinion the authorities below are duty bound to examine the issues in detail before rendering its decision.

In the present case, it is evident that the assessee did not avail the opportunities afforded, but at the same time the issues raised have not been adjudicated on merits in the true sense of the term. In the interest of substantial justice, we deem it appropriate to restore the matter back to the file of the Ld. AO with the direction to decide the appeal afresh in accordance with law, after granting adequate and reasonable opportunity of hearing to the assessee. The assessee is also directed to extend full cooperation and produce necessary details and evidences before the Ld. AO failing which the appellate authority shall be at liberty to pass an order on the basis of material available on record.

In the result, the appeal is allowed for statistical purposes with the directions as above.