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Facts
The assessee, a partnership firm in textiles, did not file its return for AY 2017-18 and deposited a large amount in specified bank notes. The AO issued notices which were not complied with, leading to an ex-parte order. The CIT(A) dismissed the subsequent appeal ex-parte for non-prosecution.
Held
The Tribunal held that the CIT(A) is duty-bound to dispose of an appeal on merits, even if ex-parte, after framing points of determination and providing a detailed discussion. Non-compliance with this procedure warrants a remand.
Key Issues
Whether the CIT(A) correctly dismissed the appeal ex-parte for non-prosecution without disposing of the appeal on merits.
Sections Cited
142(1), 144, 250(6)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-2, Chandigarh [CIT(A)] dated 01.01.2025 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the assessee is a partnership firm engaged in the business of Textiles. Return of income for AY 2017-18 was not filed by the assessee. The AO found that the assessee had deposited huge amount in specified bank notes (SBN) during demonetisation period. The AO issued notice u/s. 142(1) of the Income Tax Act, 1961 (the Act) on 09.03.2018 and show cause Vasantham Silks notice on 08.07.2019. The assessee did not comply with the notice issued u/s. 142(1) of the Act. Therefore, the AO was constrained to pass exparte order u/s. 144 of the Act after making addition of cash deposits as unexplained money of the appellant.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution.
Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
I heard the rival contentions and perused the material available on record. 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 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.` Order pronounced in the open court on 28th October, 2025.