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Facts
The assessee, a partnership firm engaged in the retail sale of chicken and poultry products, failed to file a regular Income Tax Return for AY 2018-19. Based on information regarding cash deposits and withdrawals, the AO issued a notice under Section 148 and completed the assessment under Section 147, treating cash deposits as business receipts and estimating income at 8%. The CIT(A) subsequently dismissed the assessee's appeal ex-parte for non-prosecution without considering the merits of the case.
Held
The Tribunal held that the CIT(A) is legally bound under Section 250(6) to frame points of determination and decide appeals on merits, even if dismissed ex-parte, citing the precedent of PCIT vs. Premkumar Arjundas Luthra. Consequently, the matter was remanded to the CIT(A) for a de novo disposal on merits, ensuring the assessee is afforded a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal ex-parte for non-prosecution without deciding it on merits, and if the CIT(A) has a statutory obligation to dispose of appeals on merits even when the assessee does not appear.
Sections Cited
148, 147, 144, 144B, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI 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 24.03.2025 for Assessment Year (AY) 2018-19.
Brief facts of the case are that the assessee is a partnership firm, engaged in the business of retail sale of chicken and poultry products. No regular return of income for the A.Y. 2018-19 was filed. Based on the information that assessee had made cash deposits and withdrawals in the Federal bank, therefeore, the AO Sariga Chicken Centre & Cold Storage issued a notice u/s. 148 of the Act on 30/03/2022. Against the said return of income, the AO completed the assessment vide order dated 06/03/2023 passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 (for short, ‘the Act’) at a total income of Rs. 12,03,584/-. While doing so, the AO treated the entire cash deposits as business receipts and estimated the income thereon at 8%.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal ex-parte for non prosecution without entering into the merits.
Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
I have heard the rival submissions and perused the material 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 ex-parte, 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 Sariga Chicken Centre & Cold Storage the considered view that the matter requires to be remanded to the file of the CIT(A) with a 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.