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Facts
The Assessing Officer made additions of Rs. 7,00,000/- and Rs. 19,88,290/- as unexplained income and estimated income. The assessee appealed to the CIT(A), but failed to comply with notices and make submissions, leading to an ex-parte order.
Held
The Tribunal held that the CIT(A) cannot dismiss an appeal solely on account of non-prosecution. The impugned order was set aside as it was passed without considering the merits of the case.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without deciding on merits due to the assessee's non-compliance.
Sections Cited
147, 68, 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
O R D E R
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 22.09.2023, impugned herein, passed by the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2012-13.
In the instant case, the AO vide assessment order dated 27.11.2019 under Section 147 r.w.s. 147 of the Act has made the additions of Rs.7,00,000,/- and Rs.19,88,290/- respectively as unexplained income under Section 68 of the Act and estimation of income @ 1 + 1 % of Rs.9,94,14,500/- on credit and debit side.
2 M/s. Nucleus Fincons Pvt. Ltd
The Assessee being aggrieved against the additions, as well as the assessment order, filed first appeal before the Ld. Commissioner challenging the same however, despite issuing various notices eventually made no compliance and/or filed no submissions and documents. Therefore, in the constrained circumstances, the Ld. Commissioner decided the appeal of the assessee as ex-parte, while relying on the judgment of the Tribunal in the case of CIT Vs. Multiplan India Pvt. Ltd. [38 ITD 320 (Delhi)] but not on the merits of the case and thus, the impugned order is liable to be set aside, specifically in view of the judgment passed by the jurisdictional High Court in the case Commissioner of Income Tax Vs. Premkumar Arjundas (HUF) of 2013 dated 25.04.2016 (2017) 297 CTR (Bom.) 614, wherein the Hon'ble High Court has held as under:
“That it is not open to the CIT(A) to dismiss the appeal on account of non-prosecution. Further las does not empower to the CIT(A) to dismiss the appeal for non-prosecution as if evident from the provisions of the Act”.
Thus, this Court deem it appropriate to set aside the impugned order and remand 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.
This Court also deem it appropriate to direct the Assessee to comply with the notices to be issued by the Ld. Commissioner and file the relevant submissions and documents, which would be essentially required for just and proper decision of the case. It is also clarified that the Assessee before the Ld. Commissioner, would be at liberty to raise the legal grounds in addition to already raised qua legal and merits aspects, in the 1st appellate proceedings.
3 M/s. Nucleus Fincons Pvt. Ltd
Thus, the case is accordingly remanded to the file of the Ld. Commissioner for decision on merit, in the aforesaid terms.
In the result, the Assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open court on 21.01.2026.