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Facts
The assessee's appeal against an assessment order dated 11.11.2019 under Section 143(3), which added Rs.12,00,000/- for unexplained cash credit, was dismissed in limine by the National Faceless Appeal Center (NFAC) under Section 250 because the assessee failed to comply with notices.
Held
The ITAT, relying on a jurisdictional High Court judgment, held that the CIT(A) cannot dismiss an appeal for non-prosecution as it is required to apply its mind to all issues under Section 251. The impugned order was set aside, and the case was remanded to the Ld. Commissioner for a fresh decision on merits after providing a reasonable opportunity of being heard to the assessee.
Key Issues
Whether the CIT(A) has the power to dismiss an appeal for non-prosecution without deciding it on merits, contrary to the requirements of Section 251 of the Income Tax Act.
Sections Cited
250, 143(3), 251(1)(a), 251(1)(b), 251(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH “SMC”, NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 24.02.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2017- 18.
Admittedly, in the instant case, the Assessee despite of sending various notices by the Ld. Commissioner in the appellate proceedings carried out against the assessment order dated 11.11.2019 u/s 143(3) of the Act, by which the addition of Rs.12,00,000/- on account of unexplained cash credit was made and added in the income of the Assessee, made no compliance and therefore in the constrained circumstances, the Ld. Commissioner dismissed the appeal of the Assessee in limine but not on merit, hence such action of the Ld. Commissioner is not permissible, as per judgment in the case of Commissioner of Income Tax Vs. Premkumar Arjundas (HUF) of 2013 dated 25.04.2016 (2017) 297 CTR (Bom.) 614, by the Hon’ble jurisdictional High Court, wherein it has been held under:
“That this is amply clear from section 251(1)(a) & (b) and explanation 2 to section 251(2) of the Act, which requires 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 CIT(A) to dismiss the appeal for non-prosecution, as it is evident from the provisions of the Act”.
Hence, this Court by respectfully following the aforesaid dictum laid down by Hon’ble High Court, is inclined to set aside the impugned order and consequently remanding the case to the file of the Ld. Commissioner for decision on merit, suffice to say by affording reasonable opportunity of being heard to the Assessee.
Thus, the case is remanded to the file of the Ld. Commissioner for decision afresh accordingly.
The Assessee is also directed to file the relevant submissions/documents as would be essentially required for proper and just decision of the case. It is clarified that in case of subsequent default, the Assessee shall not be entitled for any leniency.
In the result, the Assessee’s appeal is allowed for statistical purposes.
Order is pronounced 24.09.2025 as per rule 34(5) of the Income Tax {Appellate Tribunal} Rule 1963.