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Facts
The assessee filed a return of income for AY 2007-08 declaring a loss. The AO made additions of Rs. 92,11,000/- on account of unexplained cash credits. The assessee appealed to the CIT(A), NFAC, who dismissed the appeal in limine for non-prosecution and non-filing of Form 35.
Held
The Tribunal held that the CIT(A)'s order dismissing the appeal for non-prosecution and non-filing of Form 35 was not proper, especially considering the physical proceedings conducted earlier. The Tribunal set aside the order and remitted the matter back to the CIT(A) for adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine without adjudicating on merits, considering the past proceedings and the transition to a faceless system.
Sections Cited
143(3), 143(2), 142(1), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 22.03.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A), NFAC”] which in turn arises out of assessment-order dated 30.12.2009 passed by learned ITO-1(2), Indore [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2007-08, the assessee has filed this appeal on following grounds:
Page 1 of 5 “1. That the Ld. C.I.T. (A), faceless failed to appreciate the fact that during the year under consideration electronic filing portal was not functional and appeal was filed manually and the physical copy of the appeal was duly submitted and acknowledged by the office of the Ld. C.I.T.(A), Indore and therefore the dismissal of appeal in limine is arbitrary, unjust and bad in law both on facts and in law.
That the Ld. C.I.T. (A), faceless dismissed the appeal on the ground of non-maintainability without appreciating the details & documents on record and specifically copy of form 35, statement of facts and grounds of appeal
& copy of assessment order were duly submitted at the office of Ld. C.I.T(A), Indore & therefore the dismissal of appeal in limine is also arbitrary, unjust and bad in law both on facts and in law.
3. That the Ld. C.I.T. (A), faceless failed to appreciate the fact that copy of form 35, statement of facts and grounds of appeal were submitted during the course of appeal proceedings before him therefore the dismissal of appeal in limine is also arbitrary, unjust and bad in law both on facts and in law.
4. Without prejudice to above, the L.d. C.I.T. (A), faceless erred in passing the order after 17 years, during this period, the appellant was asked to make submissions on the merits of the case several times and then dismissing the appeal on ground of non-maintainability is also arbitrary, unjust and bad in law both on facts and in law.
5. Without prejudice to the above, the Ld. C.I.T.(A), faceless failed to appreciate the merits of the case the same violates the principles of Natural Justice & same is also arbitrary, unjust and bad in law both on facts and in law.
6. Without prejudice to the above, the order was passed without providing the V.C. despite specific requests by the appellant the same violates the principles of Natural Justice & is also arbitrary, unjust and bad-in-law, both on facts and in law.”
2. The background facts relating to present appeal are such that the assessee, a society registered under Madhya Pradesh Societies Registration Act, 1973, filed its return of income of AY 2007-08 declaring a loss of Rs.
26,945/-. The case of assessee was selected for scrutiny assessment and the AO issued notices u/s 143(2)/142(1) which were complied by assessee.
Ultimately, the AO made a total addition of Rs. 92,11,000/- on account of Page 2 of 5 unexplained cash credits u/s 68 and completed assessment. Aggrieved, the assessee carried matter in first-appeal before CIT(A), NFAC. The CIT(A), NFAC dismissed assessee’s first-appeal for non-prosecution, more particularly concluding thus:
“4.0 In view of the above facts, statutory provisions, and judicial precedents, it is evident that the appeal is defective and invalid as it suffers from non-compliance with mandatory requirements under Rule 45(1) of the Income-tax Rules, 1962. The appellant has failed to furnish mandatory requirement i.e. Form No.
In the absence of such fundamental requirements, the appeal cannot be taken up for further adjudication. 5.0 Accordingly, the appeal filed by the appellant is found to be not maintainable and is hereby dismissed in limine, without adjudication on merits.” Still aggrieved, the assessee has come in next appeal before us.
We have heard learned Representatives of both sides and carefully perused the case record.
It emerged during hearing that the assessee filed first-appeal consisting of Form No. 35 and other required documents to CIT(A), Indore Bhopal on 27.01.2010 under “physical mode” then prevailing [copies of the documents so filed are placed at Pages 10-15 of Paper-Book]. Thereafter, the CIT(A), Indore conducted proceedings of first-appeals and issued notices of hearing to assessee; the assessee filed a detailed reply dated 27.03.2015 to CIT(A), Indore; the CIT(A), Indore sought remand-report from AO; the AO filed remand-report dated 23.03.2018 to CIT(A), Indore; and the assessee made further submissions to CIT(A), Indore, the documents of all these
Page 3 of 5 proceedings conducted by CIT(A), Indore are available in Paper-Book.
Subsequently, the proceeding of first-appeal was migrated to Faceless System and the CIT(A), NFAC passed impugned order dated 22.03.2025.
Thus, it appears that the due to migration of assessee’s first appeal from physical regime to faceless regime, there was a change from CIT(A), Indore to CIT(A), NFAC and hence the papers of earlier proceedings conducted by CIT(A), Indore might have missed attention or may not be available to the new CIT(A), NFAC. Therefore, in the situation, the impugned order passed by CIT(A), NFAC dismissing assessee’s first-appeal on the footing of non- prosecution and also on the footing of non-filing of Form No. 35 is not a proper order. The assessee, by means of as many as six grounds raised in present appeal as re-produced in first para of this order, is repeatedly claiming that the impugned order passed by CIT(A), NFAC is arbitrary, unjust, bad in law and bad on facts. We agree with the submission of assessee in the light of facts/documents of physical proceeding conducted by CIT(A), Indore and accordingly set aside the impugned order passed by CIT(A), NFAC and remit this matter to the file of CIT(A), NFAC for adjudication afresh after considering entire material. Needless to mention that the CIT(A), NFAC shall give full opportunities to assessee to make submissions and consider assessee’s submissions judiciously. While doing this exercise, the CIT(A), NFAC may also call fresh remand-report from AO, if warranted. The assessee is also directed to make all submissions to CIT(A), NFAC without seeking unnecessary adjournments. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 03/12/2025