PLANT LIPIDS (P) LTD,KOLENCHERY vs. DCIT, CORPORATE CIRCLE-2(1), KOCHI

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte.

Being aggrieved, the appellant is in appeal before us in the present appeal.

When the appeal was called 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.

We have heard the rival contentions of both the parties and perused the material available on record. The issue in the present appeal relates to the disallowance u/s. 14A of the Act. The appellant challenged the addition contending that no borrowed funds have been used for the purpose of making investments which yielded exempt income and also contended that for the purpose of computing the disallowance only the value of investment which yielded exempt income alone should be considered. Further, on a reading of the order of the CIT(A), it appears that the CIT(A) had not dealt with the grounds raised by the appellant. 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.