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Facts
The assessee, a stamp vendor, had an addition of Rs. 13,54,500/- made for unexplained cash deposits during demonetisation for AY 2017-18. The assessee's first appeal to the CIT(A) was dismissed for non-prosecution, leading to the present appeal before the Tribunal.
Held
The Tribunal condoned a 184-day delay in filing the appeal, finding reasonable cause. It held that the CIT(A) is legally obligated under Section 250(6) to dispose of appeals on merits, even ex-parte, and thus remanded the case back to the CIT(A) for a de novo decision after providing the assessee a proper hearing.
Key Issues
1. Condonation of delay in filing appeal before the Tribunal. 2. Whether the CIT(A) can dismiss an appeal for non-prosecution without adjudicating on merits, particularly if notices were misdirected.
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 07.02.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is an individual engaged in the business of stamp vendor. The return of income for AY 2016-18 was filed on 12.10.2017 declaring income of Rs. 3,04,600/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward -1(1), Kozhikode (hereinafter called "the AO") vide order dated 18.11.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 16,59,100/-. While doing so, Puthiyarambath Balakrishnan the AO made addition of cash deposits made during the demonetisation period in the State Bank of India, Main Branch, Kozhikode and Canara Bank, Cherooty Road, Kozhikode of Rs. 13,54,500/- as unexplained money of the assessee for alleged failure of the appellant to prove the source of cash deposits made in the bank accounts.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal for want of prosecution.
Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal.
At the outset we find that there is a delay of 184 days in filing the present appeal. The appellant filed petition seeking condonation of delay along with an affidavit stating that the delay had occurred as the appellant was not aware of the appellate order which came to his knowledge only on 23.08.2024. It is submitted that the delay is not willful or deliberate, therefore, prayed that the delay may be condoned. On a perusal of the condonation petition, it is evident that the appellant is prevented by reasonable cause from filing the appeal. Therefore, we condone the delay and admit the appeal for adjudication.
It is submitted before me that the notice sent by the CIT(A) went to the wrong email ID, therefore, the appellant could not put up any appearance before the CIT(A). Hence, the matter may be remanded back to the file of the CIT(A).
On the other hand, the learned Sr. DR has no serious objection to the request for remanding matter.
Puthiyarambath Balakrishnan 8. Having heard the rival submissions I am of the considered opinion that the AO made the addition of cash deposited during the demonetisation period as unexplained money of the assessee for the alleged failure of the assessee to prove the source of cash deposits. Even before the appellate proceedings before the CIT(A) the appellant could not put up any appearance as the notices of hearing were not served on the appellant. In the circumstance the CIT(A) dismissed the appeal for non-prosecution. The appellant raised three grounds of appeal wherein the appellant took a specific plea that the cash deposits were made out of the proceeds of stamp papers and the amounts were deposited for the purpose of purchase of papers from the treasury. The CIT(A), without adverting to the facts and the grounds of appeal raised by the assessee, merely dismissed the appeal.
9. 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 19th February, 2025. 11.