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Facts
The assessee, proprietor of a petrol pump, filed an ITR for AY 2017-18. The AO completed assessment under Section 143(3), making additions for unexplained cash deposit (Section 69) and lower net profit. The CIT(A) subsequently dismissed the assessee's appeal for non-prosecution.
Held
The ITAT held that the CIT(A) erred in dismissing the appeal for non-prosecution without deciding it on merits, emphasizing that a CIT(A) must decide cases on merits even *ex parte*. Citing *PCIT v. Premkumar Arjundas Luthra*, the Tribunal remanded the case back to the CIT(A) for a *de novo* decision on merits, after providing the assessee a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) is justified in dismissing an appeal for non-prosecution without deciding it on merits, and if such a dismissal violates the principle of natural justice.
Sections Cited
143(3), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, COCHIN
Before: Shri Inturi Rama Rao
Asst.Year 2017-2018 Sri.Liju Jose The Income Tax Officer Illathu Fuels v. Ward 5 Pala, Kottayam – 686 575. Kottayam. PAN : AFXPJ6618K. (Appellant) (Respondent) Appellant by : Sri.Prasanth Srinivas, CA Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 13.03.2025 Pronouncement : 23.04.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 24.12.2024 for the assessment years 2017-2018.
Brief facts of the case are that the appellant is the proprietor of a petrol pump in the name of M/s.Illathu Fuels. The return of income for the assessment year 2017-2018 was filed on 09.11.2017 declaring total income of Rs.11,57,910. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-5, Kottayam (hereinafter called the “AO”) u/s.143(3) of the Income-tax Act, 1961 (“the Act”) vide order dated 12.12.2019 at a total income of Rs.14,98,910. During the course of assessment proceedings, the AO . Sri.Liju Jose. noticed that the appellant had made cash deposit in SBN of Rs.41,000, during demonetization period, AO made addition of the same treating it as unexplained investments u/s.69 of the Act. The AO also made an addition of Rs.3 lakh on account of lower net profit. Accordingly, the AO made a total addition of Rs.3,41,000 to the returned income.
Being aggrieved by the above assessment order, appellant filed an appeal before the CIT(A), who vide the impugned order, dismissed the appeal for non-prosecution.
Being aggrieved by the order the CIT(A), the appellant is in appeal before the Tribunal in the present appeal. The learned AR of the assessee submits that the CIT(A) is not justified in dismissing the appeal for want of prosecution.
The learned Sr.DR supported the orders of the authorities below.
I heard the rival submissions and perused the material available on record. I find that the CIT(A) dismissed the appeal in limine for non prosecution. 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 v. 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 a direction to dispose of the appeal de novo on merits after affording reasonable opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 23rd day of April, 2025.