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Facts
The appellant, an individual engaged in business, filed a return for AY 2017-18. The AO completed assessment under Section 143(3) by adding Rs. 8,90,772/- as unexplained cash deposits made during the demonetisation period. The CIT(A) confirmed the AO's action, leading to the present appeal before the ITAT.
Held
The ITAT condoned a delay of 164 days in filing the appeal due to technical issues. It held that the CIT(A) failed to comply with Section 250(6) by merely confirming the AO's order without framing points of determination or discussing the facts/grounds of appeal on merits. Consequently, the matter was remanded to the CIT(A) for a de novo disposal on merits.
Key Issues
Whether the delay in filing the appeal should be condoned; Whether the AO was justified in making an addition of Rs. 8,90,772/- as unexplained money; Whether the CIT(A) erred procedurally by not disposing of the appeal on merits as per Section 250(6).
Sections Cited
143(3), 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 21.05.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is an individual carrying on the business under the name and style of M/s. Thejas Metals. The return of income for AY 2017-18 was filed on 22.01.2018 declaring income of Rs. 9,03,470/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward 1(4), Shilpa Tekkayil Kozhikode (hereinafter called "the AO") vide order dated 27.11.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 17,94,242/- after making addition of Rs. 8,90,772/- being cash deposits made during demonetisation period treating as unexplained money of the assessee for the failure of the appellant to explain the source of cash deposits. It is submitted that out of Rs. 11,00,000/- deposited during demonetisation period a sum of Rs. 2,09,228/- was out of the cash balance available on 08.09.2016. On the balance amount of Rs. 8,90,772/- addition was made treating as unexplained money.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before us 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, we proceeded to dispose of the appeal after hearing the learned Sr. DR.
At the outset I find that there is a delay of 164 days in filing the present appeal. The appellant filed a petition along with an affidavit seeking condonation of delay in filing the appeal, wherein it is stated that the appellate order was served through email of the Authorised Representative. Due to technical issues the Authorised Representative could not access the messages in the email. Therefore, the delay is not wilful or deliberate. Therefore it is Shilpa Tekkayil prayed that the delay in filing the appeal may be condoned and the appeal may be admitted for adjudication. On a perusal of the averments made in the condonation petition, it is evident that the appellant is prevented by reasonable cause from filing the appeal. Therefore, I condone the delay and admit the appeal for adjudication.
The issue in the present appeal is whether the AO was justified in making addition on Rs. 8,90,772/- as unexplained money of the assessee. On appeal before the CIT(A), the CIT(A) merely confirmed the action of the AO without referring to the statement of facts and grounds of appeal filed before him. This order passed by the learned CIT(A) is contrary to the well settled position of law. 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 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.
Order pronounced in the open court on 21st February, 2025. 9.