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Facts
The appellant, an individual engaged in the spice business, filed a return for AY 2014-15. The AO initiated reassessment proceedings under section 147/148 based on substantial cash deposits in bank accounts. The AO passed a best judgment assessment, taxing the entire cash deposits as unexplained income.
Held
The CIT(A) dismissed the assessee's appeal for non-prosecution. The Tribunal condoned the delay in filing the appeal and held that the CIT(A) is duty-bound to dispose of the appeal on merits even if it's ex-parte. The matter was remanded to the CIT(A) for a fresh decision on merits.
Key Issues
Whether the CIT(A) erred in dismissing the appeal for non-prosecution instead of deciding on merits, and whether the delay in filing the appeal should be condoned.
Sections Cited
147, 148, 144, 144B, 250(6), 221
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI ANIKESH BANERJEE, JM
O R D E R Per: Inturi Rama Rao, AM These appeals filed by the assessee are directed against the orders of the National Faceless Appeal Centre, Delhi (NFAC) dated 19th, 20th& 21st March, 2025 and 2nd February, 2025 for Assessment Years (AY) 2014-15, 2015-16, 2017-18 &2018-19, respectively.
Since identical issues and facts are involved in these appeals, they are heard together and disposed of by this common order.
Brief facts of the case are that the appellant is an individual engaged in the business of dealing in spices. The appellant filed the return of income for AY 2014-15 disclosing income of Rs. 5,50,440/-. Based on the information that the appellant had made substantial cash deposits in bank accounts, the AO formed an opinion that income escaped assessment to tax. Accordingly, notice u/s. 148 of the Income Tax Act, 1961 (the Act) was issued on 05.05.2021. The appellant neither complied with the notice u/s. 148 nor filed information as sought for by the AO. In the circumstances the AO was constrained to pass the best judgement assessment u/s. 147 r.w.s. 144 r.w.s. 144B of the Act by bringing to tax the entire cash deposits in bank accounts of Rs. 15,30,56,601/- as unexplained money of the appellant.
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.
At the outset, we find that there is a delay of 121 days in filing the present appeal. The appellant filed an affidavit seeking condonation of delay in filing the appeal on the ground that the appellant was not aware of the order passed by the CIT(A), he came Rakesh Kumar Gupta to know of the order only in 3rd week of July, 2025 when the appellant received notice u/s. 221 of the Act dated 11.07.2024 for recovery of the tax demand. Thus, he prayed that the delay had occurred on account of ignorance of the order passed by the CIT(A). In absence of any material on record, contrary to the averments made, we are of the considered opinion that it is fit case for condoning the delay. Accordingly, we condone the delay and admit the appeal for adjudication on merits.
We 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 we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.
Since identical issues and facts are involved in assessee’s appeals to 686 & 699/Coch/2025, our findings in ITA No. 680/Coch/2025 shall apply mutatis mutandis to this appeal also.
Order pronounced in the open court on 29th October, 2025.