SIVAN CHANDRAN,PALAKKAD vs. THE ITO WARD 5, PALAKKAD

Brief facts of the case are that the assessee, an individual, had not filed his return of income for AY 2017-18. On the basis of the information available with the department that the appellant had Sivan Chandran deposited Rs. 5,58,000/- during the demonetisation period, the Income Tax Officer, Ward-2, Palakkad (hereafter “the AO”) issued notice u/s. 142(1) of the Income Tax Act, 1961 (the Act) requiring the to file the return of income for AY 2017-18. Since the appellant failed to comply with the notice, the AO completed the assessment vide order dated 17.12.2019 passed u/s. 144 of the Act at a total income of Rs. 11,35,045/- by treating the deposit as unexplained investment u/s. 69 of the Act.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution placing reliance on the judgement of the Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharys 118 ITR 461.

Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.

We have heard the rival contentions of both the parties and perused the material available on record. We find that the learned 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 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 Sivan Chandran 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.