ESSAR FRUITS AGENCIES,PERUMBAVOOR vs. INCOME TAX OFFICER, ALUVA

Brief facts of the case are that the appellant is a partnership firm engaged in the business of supply of fruits and vegetables on commission basis. The return of income for AY 2018-19 was filed on 31.03.2019 declaring income of Rs. 84,290/-. Against the said return of income, the assessment was completed by the National e- Essar Fruits Agencies Assessment Centre (hereinafter called "the AO") vide order dated 24.03.2021 at a total income of Rs. 14,22,18,970/-. While doing so, the AO made addition of cash deposits made in the bank account as unexplained money of the assessee for alleged failure of the assessee to explain the source of cash deposit.

Being aggrieved, an appeal was filed before the CIT(A) contending that the cash deposits were made out of the sale proceeds of fruits and without prejudice to the above it is contended that the withdrawals made earlier should have been treated as available for subsequent deposits in the bank account where the appellant also withdrawn cash of Rs. 14,21,34,684/-. However, the CIT(A) had 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 the appeal was filed with a delay of 385 days. The appellant had filed petition seeking condonation of delay on the ground that the appellate order was served on an inactive email ID which was registered in the Income Tax portal. The order of the CIT(A) came to light only in the last week of March, 2025. The newly appointed Tax Consultant reviewed the pending proceedings on the portal. Thus, it is pleaded that the delay is caused on account of factors which are beyond the control of the appellant. The averments made by the appellant in the affidavit seeking condonation of delay remained uncontroverted by the Essar Fruits Agencies Department. Since the appellant had come to know of the order passed by the CIT(A) only in March, 2025 and the appeal was filed on 30.05.2025, it cannot be said that there is a delay in filing the appeal. Accordingly, the appeal admitted for adjudication.

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.