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Facts
The assessee did not file an income tax return for AY 2014-15. Based on information about financial transactions, the AO issued a notice under Section 148. The assessee subsequently filed a return, and the AO completed the assessment under Section 147 read with Section 144B, making additions under Section 69A and for capital gains. The CIT(A) dismissed the assessee's appeal ex-parte for non-prosecution.
Held
The Tribunal held that the CIT(A) is legally obligated to dispose of an appeal on its merits, even when it is dismissed ex-parte, as mandated by Section 250(6). Citing precedent, the Tribunal remanded the case back to the CIT(A) with directions to dispose of the appeal de novo on merits after providing the assessee 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, or is required to decide such appeals on merits, and if so, what is the appropriate relief from the ITAT.
Sections Cited
139(1), 148, 147, 144B, 69A, 250(6)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2014-15 Shahnavas Pariyangadu Muhammed .......... Appellant 1/10, Subi Villa, Pazhabalacode Alathur, Palakkad 678544 [PAN: BIAPS8360Q] vs. The Income Tax Officer, Ward - 2, Palakkad .......... Respondent Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 26.03.2025 Date of Pronouncement: 08.04.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 30.10.2024 for Assessment Year (AY) 2014-15.
Brief facts of the case are that the assessee, an individual, had not filed regular return of income u/s. 139(1) of the Income Tax Act, 1961 (the Act) for AY 2014-15. However, as per the information received through Multiyear NMS cases in AIMS module the AO found that the assessee was involved in certain financial transactions during FY 2013-14. Therefore the AO issued notice u/s. 148 of the Act on 29.03.2021. In response to the notice, the assessee filed Shahnavas Pariyangadu Muhammed return of income on 29.04.2021 declaring taxable income as Rs. 2,78,190/-. Against the said return of income, the assessment was completed by the AO vide order dated 30.03.2022 passed u/s. 147 5r.w.s. 144B of the Act at a total income of Rs. 31,65,593/-. While doing so, the AO made additions u/s. 69A of Rs. 28,00,000/- and on account of capital gains of Rs. 87,043/-.
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.
When the appeal was called on, nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, I proceeded to dispose of the appeal after hearing the learned Sr. DR.
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 the Shahnavas Pariyangadu Muhammed 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 8th April, 2025.