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Facts
The appellant, a distributor for Idea Cellular Ltd., failed to file an Income Tax Return for AY 2017-18 and made significant cash deposits during demonetisation. The AO initiated a best judgment assessment under Section 142(1) and made additions to his income. The CIT(A) subsequently dismissed the appellant's appeal for non-prosecution.
Held
The Tribunal held that the CIT(A) is statutorily obligated under Section 250(6) to dispose of appeals on merits, even in cases of non-prosecution or ex-parte proceedings. Therefore, the matter was remanded to the CIT(A) for a fresh disposal on merits, after providing the assessee a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding it on merits, and if it is bound to dispose of the appeal on merits even in ex-parte proceedings as per Section 250(6).
Sections Cited
142(1), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2017-18 Abdul Jaleel .......... Appellant Vapparakkal Kongad II, Parasery Kongad, Palakkad 678631 [PAN: BFPPA5260M] vs. The Income Tax Officer, WD-1 & TPS, Palakkad.......... Respondent Assessee by: ------- None ------- Revenue by: Ms. Neethu S. Sr. DR Date of Hearing: 27.11.2025 Date of Pronouncement: 28.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-4, Mumbai [CIT(A)] dated 07.07.2025 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is an individual engaged in the business of trading/wholesale distributor of the products of Idea Cellular Ltd. The appellant had not filed the return of income for AY 2017-18. Based on the information that the appellant had made cash deposits in bank account during demonetisation period of Rs. 19,02,400/- the The Income Tax Officer, Ward 1 & TPS, Palakkad (hereinafter called "the AO")
Abdul Jaleel formed an opinion that income escaped assessment to tax. Therefore, a notice u/s. 142(1) of the Income Tax Act, 1961 (the Act) was issued to the appellant on 25.01.2018. The appellant did not comply with the notice u/s. 142(1) of the Act. In the circumstances the AO was compelled to pass best judgement assessment making addition of Rs. 7,95,160/- on account of commission received by the appellant of Rs. 3,82,163/- and cash deposit of Rs. 4,13,000/- made in specified bank notes during the demonetisation period.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal for non-prosecution.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
I find that the learned CIT(A) dismissed the appeal in limine for non prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position I am of the considered view that the matter requires to be remanded to the file
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 28th November, 2025.