KYOCERA DOCUMENT SOLUTIONS INDIA PVT. LTD.,GURGAON vs. DCIT, CIRCLE-14(2), NEW DELHI

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ITA 7105/DEL/2018Status: DisposedITAT Delhi10 January 2025AY 2013-14Bench: SHRIS.RIFAUR RAHMAN (Accountant Member), SHRI YOGESH KUMAR US (Judicial Member)5 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal for want of prosecution. It was an admitted position that the CIT(A) had not adjudicated the grounds of appeal on merits. The Tribunal emphasized that the CIT(A) has no power to dismiss an appeal for non-prosecution and is statutorily required to adjudicate appeals on merits by passing a speaking order, as per Section 250(6) of the Income Tax Act, 1961. Consequently, the impugned order of the CIT(A) was deemed unsustainable. The Tribunal set aside the order and restored the matter to the file of the CIT(A) with a direction to decide the appeal afresh on merits after providing the assessee a reasonable opportunity of hearing. The assessee was also directed to respond to notices from the CIT(A) without fail. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Poonam Sodhi, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the Additional/Joint Commissioner of Income Tax (Appeals)-2, Vadodara, dated July 4, 2024, for Assessment Year 2017-18. The assessee had declared a total income of Rs. 8,03,000/-. Her case was selected for limited scrutiny due to large cash deposits totaling Rs. 29,26,000/- made during the demonetization period (November 9, 2016, to December 30, 2016) across three bank accounts. The Assessing Officer (AO) treated these deposits as unexplained money under Section 69A of the Income Tax Act, 1961. The assessee's appeal before the CIT(A) was dismissed for want of prosecution, without adjudication on merits.

What were the issues?

1. Whether the CIT(A) erred in dismissing the assessee's appeal for want of prosecution, instead of adjudicating it on merits, as required by Section 250 of the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the CIT(A) was duty-bound under Section 250 of the Act to decide the appeal on merits by passing a reasoned order and could not dismiss it summarily for want of prosecution. Revenue's Contention: The revenue supported the orders of the lower authorities, submitting that the assessee failed to furnish documentary evidence before the AO and did not respond to any notices.

Which sections of the Income-tax Act were involved?

Section 69A,Section 250,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI

Before: SHRI VIKAS AWASTHY

For Appellant: Shri Saurabh Sharma, Advocate
For Respondent: Shri Manoj Kumar, Sr. DR
Hearing: 15/12/2025Pronounced: 15/12/2025

ORDER

PER VIKAS AWASTHY, JM:

1.

This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-2, Vododara [in short ‘the CIT(A)’] dated 04.07.2024, for Assessment Year 2017-18.

2.

Shri Saurabh Sharma, appearing on behalf of the assessee submits that the assessee filed her return of income for the assessment year under consideration declaring total income of Rs. 8,03,000/- comprising of income from house property and interest income. The case was selected for limited scrutiny under CASS to examine large cash deposits during demonetization period vis-à-vis the returned income. Statutory notices u/s. 143(2) and 142(1) of the Income Tax (AY 2017-18) Act,1961(hereinafter referred to as ‘the Act’) were issued to the assessee through electronic mode i.e. ITBA Portal. The Assessing Officer (AO) observed that the assessee had deposited cash aggregating to Rs.29,26,000/- in her bank accounts during the demonetization period from 09.11.2016 to 30.12.2016, as under:

Axis Bank A/c No. 914020052655513 : Rs. 24,37,500/- Axis Bank A/c No. 909010044999673 : Rs. 2,38,500/- HDFC Bank A/c No. 12021000036371 : Rs. 2,50,000/- Total: Rs. 29,26,000/- 2.1. In response to the show cause notice, the assessee explained that the cash deposit of Rs. 24,37,500/- represented her past savings accumulated out of her late husband’s salary over a period of several years and that the remaining cash deposits represented gifts received from her mother-in-law and father-in-law. However, the AO was not satisfied with the explanation furnished by the assessee and treated the entire cash deposit of Rs. 29,26,000/- as unexplained money under section 69A of the Act. Aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A), without adjudicating the issues on merits, dismissed the appeal for want of prosecution.

2.2. The ld. Counsel for the assessee submitted that the CIT(A) erred in dismissing the appeal for non-prosecution. He submitted that under section 250 of the Act, the CIT(A) was duty-bound to decide the appeal on merits by passing a reasoned order and cannot dismiss appeal in limine for want of prosecution.

4.

Shri Manoj Kumar, representing the department vehemently supporting the orders of the lower authorities submitted that the assessee did no furnish any documentary evidences beforethe AO and failed to respond to any of the notices.

(AY 2017-18) 5. Both sides heard. I have considered the rival submissions and perused the material available on record. It is an admitted position that the CIT(A) has dismissed the appeal solely for want of prosecution and has not adjudicated the grounds of appeal on merits. The impugned order clearly records that merits of the case have not been examined. It is a well settled law that the CIT(A) has no power to dismiss appeal for non-prosecution. The First Appellate Authority is statutorily required to adjudicate the appeal on merits by passing a speaking order dealing with each ground of appeal raised by the assessee. This obligation on CIT(A) to dispose of appeal on merits flow from the provisions of section 250(6) of the Act. In view of the above legal position, the impugned order passed by the CIT(A) is unsustainable. Accordingly, the same is set aside and the matter is restored to the file of the CIT(A) with a direction to decide the appeal afresh on merits, in accordance with law, after providing reasonable opportunity of hearing to the assessee.

6. The assessee shall respond to the notices served by the CIT(A), without fail.

7.

In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open court on Monday the 15th day of December, 2025.

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