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Facts
The assessee, Lotus Destinations Pvt. Ltd., filed an appeal against the CIT(A)'s order which dismissed its appeal for non-prosecution. The original assessment for AY 2017-18 included additions made by the AO under Section 143(3), and penalty proceedings were initiated under Section 270A, which led to the appeal before the CIT(A).
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal for non-prosecution without deciding it on merits. Citing precedent, the ITAT ruled that a CIT(A) is duty-bound to dispose of appeals on merits even if heard ex parte, and thus remanded the case back to the CIT(A) for a fresh decision after providing a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without adjudicating on its merits, and whether the CIT(A) is obligated to decide an appeal on merits even in an ex parte situation.
Sections Cited
143(3), 270A, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SONJOY SARMA, JM
Assessment Year: 2017-18 Lotus Destinations Pvt. Ltd. .......... Appellant 44/1251, Asoka Road, Kaloor, Kochi 682017 [PAN: AACCL0011D] vs. DCIT, Corporate Circle-1(1), Kochi .......... Respondent Appellant by: Shri P. Sanjay, Advocate Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 13.06.2025 Date of Pronouncement: 31.07.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 14.02.2025 for Assessment Year (AY) 2017-18.
Brief facts of the case are that is a company incorporated under the provisions of Companies Act, 1956. The assessee is engaged in tourism business. The return of income for AY 2017-18 was filed on 30.10.12017 declaring total income of Rs. 80,34,670/-. Against the said return of income, the assessment was completed by Lotus Destinations Pvt. Ltd. the Income Tax Officer, Corporate Ward 1(4), Kochi (hereinafter called "the AO") vide order dated 21.12.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 1,13,28,452/-. While doing so, the AO made addition of Rs. 27,360/- being the ROC filing charges by holding it to be capital in nature. The AO also disallowed depreciation on laptop costing Rs. 40,506/- by holding that the same was purchased in cash. The AO also disallowed depreciation on Trademark for failure of the assessee to produce the bills in support of the same. The AO further disallowed a sum of Rs. 31,40,000/- being travelling allowance paid to one of the Directors by holding that the payment is not related to business. The above additions were not agitated by the appellant. The AO initiated penalty proceedings u/s. 270A of the Act by issuing show cause notice and penalty was levied vide order dated 03.03.2022.
Being aggrieved by the penalty order, 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.
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 Lotus Destinations Pvt. Ltd. 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.
In the result, the appeal filed by the assessee is allowed for statistical purposes Order pronounced in the open court on 31st July, 2025.