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Facts
The assessee, a partnership firm, failed to file a return of income for AY 2017-18. The AO found that the assessee had purchased vehicles and added Rs. 6,36,329/- under section 69C as unexplained expenditure. The CIT(A) dismissed the assessee's appeal exparte for non-prosecution.
Held
The Tribunal held that the CIT(A) is duty-bound to dispose of an appeal on merits, even if it is exparte, by framing points of determination and providing a detailed discussion. The dismissal for non-prosecution without considering the merits was against established legal principles.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal exparte for non-prosecution without deciding on merits. Whether the CIT(A) has to dispose of an appeal on merits even if it is exparte.
Sections Cited
69C, 147, 144, 250(6)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2017-18 Veekay Builders and Developers .......... Appellant Neduvile Vakamokotti Hosue, Thrikkakara North Thrikkakara S.O. 682021, Ernakulam [PAN: AAMFV9490R] vs. ITO, Non Corporte Ward- 1(1), Kochi .......... Respondent Assessee by: Ms. Binisha Baby, Advocate Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 27.10.2025 Date of Pronouncement: 28.10.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 13.01.2025 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the assessee is a partnership firm. The assessee did not file return of income for AY 2017-18. As per the information available with the Department, the appellant had incurred substantial expenditure for purchase of Heavy Motor vehicles. During the course of assessment proceedings, the Assessing Officer (AO) found that the appellant had purchased JCB and Tipper for Rs. 22,50,000/- and Rs. 27,81,379/-, respectively.
Veekay Builders and Developers The amount financed for the purchase of JCB was Rs. 18,95,050/- and Tipper Rs. 25,00,000/- and the amounts deposited by partners were issued for payment of installments against the vehicles loans. Thus, the difference of Rs. 3,54,950/- (22,50,000 – 18,95,050) for the purchase of JCB and Rs. 2,81,379/- (27,81,379 – 22,50,000) for the purchase of Tipper remained unexplained. Therefore, the AO added Rs. 6,36,329/- u/s. 69C of the Income Tax Act, 1961 (the Act) in the order passed u/s. 147 r.w.s. 144 of the Act dated 26.03.2022.
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 Veekay Builders and Developers 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.
In the result, the appeal filed by the assessee is allowed for statistical purposes Order pronounced in the open court on 28th October, 2025.