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Facts
The assessee, engaged in the business of automobile spare parts, did not file her return of income for AY 2017-18 despite making cash deposits during demonetisation. The AO completed an ex-parte assessment under Section 144, adding Rs. 16,23,149/- as business income. The CIT(A) subsequently dismissed the assessee's appeal ex-parte for non-prosecution.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal ex-parte for non-prosecution, as the CIT(A) is obligated to dispose of appeals on merits even in an ex-parte setting, as per Section 250(6) of the Act. Consequently, the matter was remanded to the CIT(A) for a de novo disposal on merits after affording reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal ex-parte for non-prosecution without deciding it on merits, and if such dismissal warrants a remand for de novo consideration.
Sections Cited
139(a), 142(1), 144, 250(6)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 06.06.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the assessee is an individual engaged in the business of purchase and sale of automobile spare parts and accessories. The appellant had not file the return of income for AY 2017-18 under the provisions of section 139(a) of the Premalatha Korottoliprasantham Income Tax Act, 1961 (the Act). As per the information available, the assessee made cash deposits during the demonetisation period. Hence, notice u/s. 142(1) of the Act was issued to the assessee on 30.01.2017 for filing the return of income. The assessee did not comply with the notice. Therefore, the Income Tax Officer, Ward - 1(2), Kozhikode (hereinafter called "the AO") completed the assessment vide order dated 12.12.2019 passed u/s. 144 of the Act at a total income of Rs. 16,23,149/-. While doing so, the AO made an addition of Rs.16,23,149/- under the head “Business Income”, being 8% of the total turnover.
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.
We 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 Premalatha Korottoliprasantham 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.
In the result, the appeal filed by the assessee is allowed for statistical purposes
Order pronounced in the open court on 21st January, 2025. 7.