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Facts
The assessee filed an appeal against the order of the CIT(A) which dismissed the assessee's appeal in limine for non-compliance. The assessment order had made additions under sections 69 and 69A for unexplained investment and money, and the CIT(A) had dismissed the appeal ex-parte without discussing merits.
Held
The Tribunal held that the CIT(A) failed to provide an adequate opportunity to the assessee and did not pass a speaking order on merits as required by Section 250(6) of the Income Tax Act. The Tribunal set aside the CIT(A)'s order.
Key Issues
Whether the CIT(A) erred in dismissing the appeal in limine for non-compliance without providing adequate opportunity and without passing a speaking order on merits. Whether the assessment order and subsequent appellate order were passed ex-parte in violation of principles of natural justice.
Sections Cited
250, 148, 147, 144B, 69, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
PER ANADEE NATH MISSHRA, A.M.: 1. The present appeal has been filed by the assessee against the impugned appellate order dated 27.09.2024 order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi under section 250 of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) wherein the assessee’s appeal has been dismissed in limine for the reason of non compliance. The grounds of appeal of the assessee are as under: -
1. “1. That the Ld. CIT(A) as well as the Ld. AO erred on facts and in law in passing ex-parte order which is in violation of the principles of natural justice and be set aside.
That the basis of initiation of re-assessment proceedings by issue of notice u/s 148 of the Income Tax Act, 1961, its continuation and culmination vide order u/s 147/144B of the Income tax Act, 1961 dated 28.03.2023 is bad in law and liable to be cancelled.
Page 2 of 4 3. That the CIT(Appeals) erred on facts and in law in confirming the addition of Rs.3,32,000/- u/s 69 of the Income Tax Act, 1961, which is contrary to the facts and circumstances of the case.
That the CIT(Appeals) erred on facts and in law in confirming the addition of Rs.51,20,910/ u/s 69A of the Income Tax Act, 1961, which is contrary to the facts and circumstances of the case.
The appellant reserves a right to add/alter/amend any ground of appeal at the time of its hearing.” 1.1 In this case, the assessment order dated 28/03/2023 was passed by the Assessing Officer (“AO”), u/s 147 read with section 144B of the Act whereby the assessee’s total income was assessed at Rs.56,62,310/-. In the aforesaid assessment order, an addition amounting to Rs.3,32,000/- was made u/s 69 of the Act on account of unexplained investment and a further addition of Rs.51,20,910/- was made under section 69A of the Act on account of unexplained money in the several bank accounts. The assessee’s appeal against the aforesaid assessment order was dismissed by the Ld. CIT(A) vide impugned appellate order dated 27.09.2024. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 27.09.2024 of the Ld. CIT(A).
(2). At the time of hearing before us, the Ld. Authorized Representative (“AR”) for the Assessee submitted that both the lower authorities have not given adequate opportunity to the assessee and the assessment order as well as the First Appellate Order were passed exparte qua the assessee. He further submitted that the impugned order of the Ld. CIT(A) is not a speaking order on merits of the additions made. He further submitted that the assessee’s appeal was dismissed in limine for want of prosecution without any discussion on the merits of the additions. The Ld. CIT(A) dismissed the assessee’s appeal in a Page 3 of 4 summary manner, taking adverse view of non-compliance on the part of the assessee of the notices issued by the Ld. CIT(A). The Ld. Counsel for the assessee contended that the Ld. CIT(A) as well as the Assessing Officer failed to appreciate facts of the case in right perspective. The Ld. Counsel for the assessee prayed that the issue in dispute may be restored back to the Assessing Officer for giving adequate opportunity to the assessee in the interest of justice and fair play. The Ld. Departmental Representative (“DR”, for short) expressed no objection to restoration of the matter to the file of the Assessing Officer.
(2.1). On perusal of the impugned appellate order dated 27/09/2024 of the Ld. CIT(A), it is found that the Ld. CIT(A) dismissed the assessee’s appeal for want of prosecution, taking adverse view of non-compliance with notices issued by the office of the Ld. CIT(A). However, the Ld. CIT(A) has statutory duty, prescribed u/s 250(6) of the Act to pass a speaking order on the merits of the case, whether or not there was any representation from the assessee’s side. The order of the Ld. CIT(A) in disposing of the assessee’s appeal, is required to be in writing, and the order is further required to contain the point for determination, the decision thereon and the reason for the decision. Thus, it is the statutory duty of the Ld. CIT(A) to pass a speaking order on merits of the case. The failure of the Ld. CIT(A) to ensure compliance with Section 250(6) of the Act, in both letter and spirit, was erroneous on his part. Further, the Assessing Officer as well as the Ld. CIT(A) failed to provide reasonable opportunity to the assessee before passing their respective exparte orders. In view of the foregoing, and as representatives of both sides are in agreement with this, in the specific facts and circumstances of Page 4 of 4 the present case before us; the impugned order of the Ld. CIT(A) dated 27/09/2024 is hereby set aside and issues in dispute regarding additions made in the assessment order are restored back to the file of the Assessing Officer with the direction to pass denovo assessment order in accordance with law, after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed of in accordance with the aforesaid directions.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 25/02/2025.