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Facts
The assessee, an infrastructure firm, filed a return declaring a loss for AY 2017-18. The AO completed the assessment by making additions under Sections 40A(3) and 40(a)(ia). The assessee's appeal to the CIT(A) against these additions was dismissed ex parte for non-prosecution.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal ex parte without deciding on the merits, emphasizing that the CIT(A) is duty-bound to dispose of appeals on merits. Consequently, the matter was remanded to the CIT(A) for de novo consideration after affording the assessee a fresh opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal ex parte for non-prosecution without deciding on merits, or if it is obligated to dispose of the appeal on merits.
Sections Cited
143(3), 40A(3), 40(a)(ia), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
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 13.11.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that appellant is a partnership firm engaged in the business of infrastructural development related to residential and commercial construction. The return of income for AY 2017-18 was filed on 05.08.2017 declaring loss of Rs. 7,96,631/- under the head “profit and gains from business or profession”. Against the said return of income, the assessment was completed by the DCIT, Corporate Identity Infrastructures Twin Towers Circle 1(1), Kochi (hereinafter called "the AO") vide order dated 04.12.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 1,09,335/-. While doing so the AO made addition of Rs. 8,95,965/- under sections 40A(3) and 40(a)(ia) 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 on the decision of the Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee [1977] 118 ITR 461 (SC.
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 considered view that the matter requires to be remanded to the file Identity Infrastructures Twin Towers 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
In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on 24th February, 2025. 9.