AMARJIT SINGH,LUDHIANA vs. INCOME TAX OFFICER,WARD 6(1) LUDHIANA, LUDHIANA

9. That the Appellant craves, leave to vary, alter or add any grounds of appeal before the appeal is finally heard or disposed off.

3. Briefly, the facts of the case are that the appeal was filed on 14th July 2023 by Shri Amrit Singh for A.Y. 2017-18 against the order passed by CIT(A), NFAC, Delhi under section 250(6) of the Income Tax Act, 1961. The appeal, filed with a delay of 34 days, raised several issues including dismissal by Ld. CIT(A) without proper notice, invalid initiation of reassessment proceedings under section 148 read with section 144A, and defective approval under section 151. The assessee also disputed the addition of Rs 17,41,400/- under the head “Short Term Capital Gain” and the initiation of penalty proceedings under sections 270A and 272A(1)(d). The Ld. AO had initiated reassessment proceedings under section 148 read with section 144A alleging escapement of income and made the aforesaid addition, which was also followed by initiation of penalty proceedings under the mentioned sections. The assessee objected to the reassessment proceedings on grounds of invalid approval under section 151, lack of opportunity of being heard, and non-adherence to the procedure under sections 147, 144, and 144B.

4. Against the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal on the ground of non-prosecution, noting that no submissions were filed by the assessee despite having been granted sufficient opportunity. Relying on judicial precedents, inter alia, the decision of the Hon’ble ITAT in the case of Antikumar H. Shah vs. ACIT and CIT vs. Multiplan India Pvt. Ltd. [38 ITD 320 (Del)], the Ld. CIT(A) held that the appeal was liable to be dismissed for want of prosecution.

5. Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.

6. During the course of hearing, the Ld. AR submitted that the Ld. CIT(A) erred in dismissing the appeal without serving the mandatory notice under section 250 of the Income Tax Act to the assessee’s correct and designated email address, as reflected on the Income Tax Portal and in Form 35. It was contended that such non-service of notice constituted a violation of the principles of natural justice and deprived the assessee of an effective opportunity to present his case. The Ld. AR further submitted that the reassessment proceedings initiated under section 148 were invalid in law, as the mandatory approval required under section 151 had been obtained from an non-competent authority. It was also argued that the addition of Rs. 17,41,400/- made under the head “Short Term Capital Gain” was devoid of any legal or factual foundation. In addition, the initiation of penalty proceedings under sections 270A and 272A(1)(d) was assailed as being unwarranted and without proper justification. The Ld. AR prayed that the matter be restored to the file of the Ld. CIT(A) with a direction to adjudicate the appeal afresh on merits after affording the assessee a reasonable opportunity of being heard.

8. We have heard the rival contention of both the parties and perused the material available on the record. In the present case, we find that the Ld. CIT(A) had erred in dismissing the appeal for non-prosecution without ensuring that notice under section 250 of the Income Tax Act, 1961, had been properly served upon the assessee. It was held that the failure to serve the requisite notice constituted a breach of procedural fairness and a violation of the principles of natural justice. It was further noted that the Ld. CIT(A) had not adjudicated upon the core issues raised in the appeal, including the validity of the notice issued under section 148, the propriety of the approval granted under section 151, and the merits of the addition made under the head “Short Term Capital Gain.” The delay of 34 days in filing the appeal was also not examined or addressed in accordance with law. In view of these deficiencies, we set aside the impugned order of the Ld. CIT(A) and remand the matter back to file of Ld. CIT(A) with a direction to adjudicate the appeal afresh on merits, after verifying the service of notice and ensuring due compliance with the principles of natural justice. Accordingly, the appeal is allowed for statistical purposes.