Loading judgment…
Facts
Assessee Anjaneyulu Reddy Ammireddy failed to file ITR for AY 2018-19 despite making significant cash deposits in bank accounts (Rs. 46,36,701/- in Andhra Bank and Rs. 72,33,314/- in HDFC Bank). The AO initiated reassessment under Section 147, making an addition of Rs. 2,07,70,469/- under Section 69, which led to an assessed income of Rs. 2,10,73,669/-. The CIT(A) dismissed the assessee's appeal ex-parte for non-prosecution without addressing the merits of the grounds of appeal.
Held
The ITAT held that the CIT(A) erred by summarily dismissing the appeal for non-prosecution without a speaking order, emphasizing the CIT(A)'s statutory obligation under Section 250 and Section 251 to dispose of appeals on merits with reasoned decisions. The tribunal set aside the CIT(A)'s order and remanded the case for fresh adjudication, directing the CIT(A) to consider both the original and additional grounds, including the assessee's challenge to the validity of the Section 148 notice concerning Section 151 approval for reopening beyond three years.
Key Issues
1. Whether the CIT(A) was justified in dismissing an appeal for non-prosecution without a speaking order on merits. 2. The validity of reassessment proceedings under Section 147/148 when initiated beyond three years, specifically concerning the requisite approval under Section 151.
Sections Cited
147, 144, 144B, 69, 148, 151A, 151(ii), 148A(b), 148A(d), 143(2), 142(1), 250, 250(6), 251, 251(1)(a), 251(2), 246A, 149(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam
Before: Shri Ravish Sood & Shri Balakrishnan S.
(निर्धारण वर्ा/Assessment Year:2018-19) Vs. Anjaneyulu Reddy Ammireddy, Income Tax Officer, Vinukonda. Ward-1, PAN: AELPA3332C Narasaraopet. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Sri GVN Hari, Advocate रधजस्व द्वधरध/Revenue by: Dr. Aparna Villuri, Sr. AR सुिवधई की तधरीख/Date of Hearing: 06/11/2025 घोर्णध की तधरीख/Date of 19/11/2025 Pronouncement: आदेश / ORDER PER. RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 25/07/2025, which in turn arises from the order passed by the Assessing Officer under section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 29/02/2024. The assessee has assailed the impugned order on the following grounds of appeal:
1. “The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case.
2. The Ld. CIT(A) is not justified in deciding the appeal ex-parte.
3. The Ld. CIT(A) is not justified in upholding the addition of Rs. 2,07,70,469/- made by the Assessing Officer under section 69 of the Act towards unexplained deposits in bank accounts of the appellant.
4. Any other ground that may be urged at the time of appeal hearing.”
Apart from that, the assessee has raised the following additional grounds of appeal:
1. The notice dated 08/04/2022 issued under section 148 of the Act is invalid as the same was issued by the JAO but not the FAO, in contravention of the provisions of section 151A of the Act and hence the notice is liable to be quashed as invalid.
2. The notice dated 08/04/2022 issued under section 148 of the Act is invalid in as much as the approval was granted by PCIT, Vijayawada which is contrary to the provisions of section 151(ii) of the Act.”
As the aforementioned additional grounds of appeal involve purely a question of law which could not require looking any further beyond the facts borne on record, therefore, we have no hesitation in admitting the same. Our aforesaid view is supported by the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Corporation vs. Commissioner of Income Tax (1998) 229 ITR 383 (SC).
Succinctly stated, the AO based on information that though the assessee during the subject year had carried out certain financial transactions, viz., (i) cash deposits in his bank account with Andhra Bank: Rs. 46,36,701/-; and (ii) cash deposits in his bank account with HDFC Bank: Rs.72,33,314/-, but had not filed his return of income for the year under consideration, i.e., AY 2018-19, initiated proceedings under section 147 of the Act. Notice under section 148A(b) of the Act, dated 22/03/2022, was issued to the assessee. Thereafter, the AO passed an order under section 148A(d) of the Act, dated 08/04/2022, wherein it was held by him that it was a fit case for issuing notice under section 148 of the Act. Notice under section 148 of the Act, dated 08/04/2022, was thereafter issued by the AO. In response, the assessee filed his return of income on 24/02/2023, disclosing an income of Rs. 3,03,200/-.
Thereafter, the AO vide his order passed under section 147 r.w.s. 144B of the Act, dated 29/02/2024, after making an addition of Rs. 2,07,70,469/- under section 69 of the Act, assessed the income of the assessee at Rs. 2,10,73,669/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee, despite having been afforded five opportunities, i.e., vide notices dated 29/05/2025, 10/06/2025, 18/06/2025, 27/06/2025, and 15/07/2025, failed to comply, therefore, the CIT(A), after referring to the facts involved in the case as could be gathered from the “Memorandum of Appeal”, i.e., Form-35, dismissed the appeal for want of prosecution. For the sake clarity, we deem it apposite to cull out the observations of the CIT(A), as under: “4. Brief facts of the case: In the above-mentioned case, the appellant had not filed his return of income for A.Y. 2018-19. Information in this case was populated in Insight Portal based on the Risk Assessment Criteria set by the CBDT that the appellant had made following transactions during the F.Y.2017-18: (1) Cash deposit of Rs. 46,36,701/-in Andhra Bank A/c (ii) Cash deposit of Rs. 72,33,314/- in HDFC Bank A/c On the basis of information notice u/s 148 of the Act was issued on 08.04.2022. In response to notice uls 148 of the Act, the appellant filed return of income and declaring total income of Rs.3,03,200/-, Notice u/s 143(2) of the Act was issued on 10.05 2023. Notice u/s 142(1) of the Act and letters was issued from time to time and the appellant filed response to the notices issued to him. During the assessment proceedings, the appellant furnished copies of bank statements. On perusal of the bank statements, it was noticed that the appellant was having total credit entries of Rs. 2,97,90,489/- in its bank accounts. The appellant had explained the credit of Rs. 90,20,000/-only during the assessment proceedings. The AO completed the assessment proceedings u/s 147 r.w.s 1448 of the Act on 29.02.2024 and assessed the total income of the appellant's of Rs 2.10,73.669/- by making addition of Rs. 2,07,70,469/- uls 69 of the Act. Aggrieved, the appellant filed the present appeal, as neved, the appell mentioned in Para 2 above 5. After introduction of Faceless Appeal Scheme with effect from 25/09/2020, notices u/s. 250 of the Act were issued on various dates as mentioned in Para 1.1 above. On all these occasions, the appellant neither made any written submissions nor filed any application seeking adjournment. After enabling the window for communication with the CIT(A), by the NFAC with effect from 01/05/2024 also, no communication has been received from the appellant till date. Considering the above facts, it is clear that, in this case, sufficient number of opportunities have already been granted to the appellant, which the appellant has failed to avail. Under these facts and circumstances, where the appellant's consistent non- compliance and indifference to the appellate proceedings is abundantly manifest, I do not have any alternative but to decide the appeal on the basis of facts available in grounds of appeal and assessment order of the Assessing Officer. Hence, the appeal is being decided ex-parte on the basis of material available on record.
6. As mentioned in Para 1.1 of this appeal order, this office has issued several letters/notices to file written submission. However, no adjournment and no written submissions were filed. The notices were issued on email available in the ITBA Module of the Income Tax Department. 6.1 From the above conduct of the appellant, it is evident that the appellant is not interested in pursuing its appeal. The Hon'ble Supreme Court in the case of CIT Vs B. N. Bhattacharjee & Others [1979] 10 CTR 354 (SC) observed that preferring an appeal, means effectively pursuing it. The Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Holkar Vs CWT [1979] 223 ITR 480 (MP) dismissed the reference filed at the instance of the assessee for default and for not taking necessary steps. Considering the conduct of the appellant during the present proceeding. I am of the view that the appellant is not interested in pursuing the appeal. 6.2 The Hon'ble Supreme Court in the decision pronounced on October 25, 2019 in the case of PCIT vs. NRA Iron & Steel Pvt. Ltd in Civil Appeal No. of 2019 (Arising out of SLP (Civil) No. 29855 of 2018) has held that if a notice is duly served upon the litigant through its authorized representative, and it was provided sufficient opportunity to appear before the Court and contest the matter but the litigant chooses to let the matter proceed ex-parte the order cannot be recalled. In the case of the present appellant, the notices to the appellant u/s 250 of the Income Tax Act, 1961 have been issued online through the ITBA software, as is required under the Faceless Assessment & Appeals. 6.3 The decision of the Hon'ble High Court of Mumbai in the case of Mis. Chemipol vis. Union of India [Central Excise Appeal No.62 of 2009] clearly states. that every court judicial body or authority, which has a duty to decide a matter between two parties, inherently possesses the power to dismiss the case in default. For the sake of reference, the relevant extract of the judicial pronouncement rendered by the Hon'ble High Court of Mumbai quoting decision of Hon'ble Supreme Court in case of Nandramdas Dwarkadas, AIR 1958 MP 260, is reproduced below. "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses." 6.4 The principle that every court that is to decide on a matter of dispute, inherently possesses the power to dismiss the case for default, has been upheld by the Hon'ble Supreme Court in case of Dr. P. Nalla Thampy Vs. Shankar (1984 (Supp) SCC 63 and the case of New India Assurance vs. Srinivasan (2000) 3 SCC 242. In the latter case, the Apex Court has held as under: "That every court or judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter of a judicial or quasi-judicial body."] 6.5 in its decision in the case of CIT v. Gold Leaf Capital Corporation Ltd. On 02.09.2011 (ITA No.798 of 2009), the Hon'ble High Court of Delhi had held that a negligent assessee should not be given many opportunities just because that quantum of amount involved is high. Necessary course of action is to draw adverse inference, otherwise, it would amount to give premium to the assessee for his negligence. When the assessee is non-cooperative, it can naturally be safely concluded that the assessee did not want to adduce evidence as it would expose falsity and non-genuineness. 6.6 In view of the above facts and judicial pronouncement the case of the appellant is fit for dismissal 7. Further, on perusal of Form-35, it is seen that appellant has neither attached/uploaded any submission nor submitted evidences/document/ explanation in support of facts and grounds of appeal
. Despite being given many opportunities, appellant did not respond during appellate proceeding nor furnished requisite details/explanations which were required to adjudicate the present appeal.
8. In the present case appellant has been provided sufficient opportunities but appellant failed to submit any submission or evidence during appellate proceedings in support of grounds of appeal as well as statement of facts and remained completely non responsive and non-compliant, therefore, in view of the above facts, I am constrained to uphold the order of the AO. As a result, grounds of appeal 1 to 9, raised by the appellant are hereby dismissed.
9. In the result, the appeal of the appellant is treated as disposed of”.
Sri GVN Hari, Advocate, the Learned Authorized Representative 7. (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, has assailed the validity of the jurisdiction that was assumed by the AO for framing the assessment vide his order passed under section 147 r.w.s 144B of the Act, dated 29/02/2024. Elaborating on his contention, the Ld. AR submitted that the AO had issued notice under section 148 of the Act, dated 08/04/2022, i.e., beyond the period of three years from the end of the assessment year, i.e., AY 2018-19, without obtaining the prior approval of the specified authority as contemplated under section 151 of the Act. The Ld. AR to buttress his contention had drawn our attention to the notice under section 148 of the Act, dated 08/04/2022, which revealed that the same was issued by the Income Tax Officer, Ward-1, Narasaraopet, after obtaining the approval of the Principal Commissioner of Income Tax on 06/04/2022, vide Reference No.100000029035358. The Ld. AR submitted that as the case of the assessee was reopened after a period of three years from the end of the relevant assessment year, therefore, the AO was statutorily obligated to have obtained the approval of he specified authority as contemplated in r section 151(ii) of the Act (as was then available on the statute), i.e., the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. The Ld. AR, carrying his contention further, submitted that as the AO had assumed jurisdiction in the absence of approval from the specified authority as contemplated under section 151 of the Act, therefore, the order so passed by him is liable to be quashed for want of valid assumption of jurisdiction. The Ld. AR to buttress his contention had relied upon the order of the Tribunal in the case of ITO, Tenali vs. Suryaprakasarao, and CO. No.24/Viz/2025, dated 17/10/2025 (copy placed on record).
Alternatively, the Ld. AR submitted that as the CIT(A) had arbitrarily disposed of the appeal based on a non-speaking order, i.e., without dealing with the specific issues that were assailed by the assessee before him and dismissed his appeal for want of prosecution, therefore, the order so passed by him cannot be sustained and is liable to be struck down.
Per contra, Dr. Aparna Villuri, learned Senior Departmental Representative (for short “Ld. DR”), on being confronted with the aforesaid factual position as was canvassed before us, failed to rebut the same. However, the Ld. DR submitted that as the A.O., after validly assuming jurisdiction, had issued notice u/s 148 of the Act, dated 08.04.2022, therefore, no infirmity emerges from the assessment order passed by him. The Ld. Sr. DR, submitted that on a conjoint reading of Section 151 and the “5th proviso” to Section 149(1) of the Act, for reckoning the period of three years from the end of the relevant assessment year as envisaged in Section 151 of the Act, based on which the specified authority whose sanction is required to be obtained for issuing notice under Section 148 of the Act is to be determined, the period allowed to the assessee as per the “Show Cause Notice” (SCN) issued under clause (b) of Section 148A of the Act has to be excluded. The Ld. Sr. DR to support her contention had drawn our attention to the “5th Proviso” of Section 149 of the Act.
We have thoughtfully considered the contentions advanced by the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions.
At the threshold, we may herein observe that the CIT(A) had summarily dismissed the appeal filed by the assessee for want of prosecution without adverting to and adjudicating the specific grounds based on which the impugned assessment order was assailed before him, i.e., grounds of appeal
No. 1 to 9. Although, we concur with the CIT(A), that in case the assessee/appellant fails to participate in the appellate proceedings, then, the same cannot be stalled for the said reason and the appeal has to be adjudicated, but at the same time are unable to persuade ourselves to subscribe to the manner in which the present appeal has been disposed of by him without dealing with the specific grounds of appeal based on which the impugned assessment order was assailed by the assessee before him.
12. We say so, for the reason that a perusal of the order passed by the CIT(A) reveals that he had disposed of the appeal by way of a non- speaking order. In our view, once an appeal is preferred before the CIT(A), then it is obligatory on his part to dispose of the same in writing after considering the points for determination and then render a decision on each of the point which arise for consideration with reasons in support. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). The Hon’ble High Court in the aforementioned case had observed as under: "8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CITIA) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non- prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.”
13. We, thus, in terms of our aforesaid observations set aside the order to the file of the CIT(A) with a direction to adjudicate the appeal and dispose of the same based on a speaking order. Needless to say, the CIT(A) shall, in the course of the set aside proceedings, afford a reasonable opportunity of being heard to the assessee.
Before parting, we may herein observe that as the assessee by raising additional grounds of appeal has assailed the validity of jurisdiction that was assumed by the AO for framing the impugned assessment vide his order passed under section 147 r.w.s 144B of the Act, which have been admitted us herein above, therefore, we herein direct the CIT(A) to adjudicate both the additional grounds of appeal that were raised by the assessee before him as well as the additional grounds of appeal as had been admitted by us herein above.
Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the open court on 19th November, 2025.