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Facts
The assessee failed to file an income tax return for AY 2017-18. Based on information of cash deposits during demonetisation, the AO initiated proceedings, eventually completing an assessment under Section 144, treating Rs. 31,49,000/- as unexplained money under Section 69. The CIT(A) confirmed the AO's order, stating the appellant failed to explain the source of the cash.
Held
The Tribunal found that the CIT(A) had dismissed the appeal without addressing its merits, which is contrary to Section 250(6) of the Income Tax Act. Emphasizing the duty of the CIT(A) to decide appeals on merits, even ex parte, the ITAT remanded the case back to the CIT(A) for a fresh decision after providing the assessee a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without considering its merits, and if the case should be remanded for fresh adjudication.
Sections Cited
139(1), 142(1), 133(6), 144, 69, 250(6)
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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 29.03.2024 for Assessment Year (AY) 2017-18.
The Brief facts of the case are that the appellant is an individual. No regular return of income u/s. 139(1) of the Income Tax Act, 1961 (the Act) was filed. Therefore, notice u/s. 142(1) was issued to the assessee on 09.03.2018 based on the information that the appellant made cash deposits made during demonetisation. The appellant not complied with the notice u/s. 142(1) of the Act. The AO called for information vide notice u/s. 133(6) of the Act from State Bank of India, Kallai Road Muhammed Ramsi Malika Kunhihan Branch, Kozhikode. In response to the notice the Bank submitted that the assessee made cash deposit of Rs. 16,65,000/- during demonetisation period. Based on this information the Income Tax Officer, Ward-1(2), Kozhikode completed the assessment vide order dated 30.09.2019 u/s. 144 of the Act at total income of Rs. 31,49,000/-. While doing so, the AO treated the cash deposit of Rs. 31,49,000/- as unexplained money u/s. 69.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO stating that the appellant failed to explain the source of cash deposited during demonetisation period.
Being aggrieved, the appellant is in appeal before us in the present appeal.
At the outset, I find that there is delay of 148 days in filing the present appeal. The appellant filed an affidavit seeking condonation of delay stating that the appellant had no intimation regarding transfer of the appeal to the National Faceless Appeal Centre and had not received notice of hearing. Thus, it is submitted that the delay has occurred on account of factors and reasons, which are beyond the control of the assessee and, therefore, prayed for condonation of the delay. In the absence of any evidence to the contrary, to disbelieve the averments made in the affidavit, I am of the considered opinion that it is a fit case to condone the delay of 51days. Accordingly, I condone the delay in filing the appeal and admit the appeal for adjudication.
Muhammed Ramsi Malika Kunhihan 6. When the appeal was called 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 without going into the details of the grounds of appeal. 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 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
Order pronounced in the open court on 10th February, 2025. 9.