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Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI AVDHESH KUMAR MISHRA
Date of Hearing 17/02/2025 Date of Pronouncement 17/02/2025 ORDER
PER AVDHESH KUMAR MISHRA, AM
This appeal for the Assessment Year (hereinafter, the ‘AY’) 2018-19 filed by the assessee is directed against the order dated 07.08.2024 passed by the Commissioner of Income Tax (Appeals), NFAC [hereinafter, the ‘CIT(A)’].
Following grounds have been raised in this of appeal:- “On the facts and in the circumstances of the case and in law the NFAC, CIT(A), Delhi erred in confirming the following actions of the Assessing Officer - Ramgiri 1. initiating proceedings u/s 147/148 of the Act without satisfying the jurisdictional requirements: 2. initiating proceedings u/s 147/148 of the Act without there being any valid reason leading to believe escapement of income; 3. making an addition of Rs.58.51,071/- on account of term deposit in bank invoking section 69 r.w.s. 115BBE of the Act: The above actions being arbitrary, fallacious, unwarranted and illegal must be quashed with directions for appropriate relief.”
The relevant facts giving rise to this appeal are that the assessee, house wife, is a non-filer. During the relevant year, the land of the assessee was compulsorily acquired by the State Government Authorities. As per the statement of fact filed by the appellant assessee, the assessee, out of the compensation received in lieu of the compulsory land acquisition, has made investment of Rs.58,51,071/- in the Term Deposit. The interest accrued thereon was subjected to TDS by the concerned bank. The information in respect of the Term Deposit and interest accrued thereon got reflected in the 26AS of appellant assessee. The Assessing Officer (hereinafter, the ‘AO’), based on this information, formed a belief that the investment in the Term Deposit and accrued interest thereon had escaped assessment (the assessee is a non-filer); therefore, he reopened the assessment.
3.1 During the course of assessment proceeding, the assessee did not ensure any compliance; therefore, the AO had not any option except to complete the assessment ex parte. Accordingly, the AO treated the Ramgiri investment of Rs.58,51,071/- as unexplained under section 69 r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter, the ‘Act’) and taxed the same along with the accrued interest of Rs.2,52,787/- on the said deposit. Aggrieved, the assessee filed appeal before the CIT(A); however, he did not succeed due to non-prosecution.
The Ld. Authorized Representative (hereinafter, the ‘AR’) drew our attention to the fact that neither the AO nor the Ld. CIT(A) has decided the case on merit. He submitted that the assessee had not have any income chargeable to tax. The inherited agricultural land owned by the deceased husband of the appellant/assessee was acquired by the Government Authority. It was submitted that the compensation received by the Government Authority was invested in the Term Deposit. The appellant assessee was not acquainted with the income tax proceedings, failed to respond. The Ld. AR prayed for remitting the matter back to the AO for deciding the case on merit.
On the other hand, the Ld. Sr. DR, drawing our attention to various Para Nos. of the assessment order and impugned appellate order, submitted that reasonable opportunities of being heard were provided to the appellant/assessee by the AO and the Ld. CIT(A). However, the appellant/assessee tactfully ensured noncompliance to avoid proper investigations. Hence, she prayed for upholding of orders of the lower
We have heard both the parties and have perused the material available on the record. We take note of the fact that the Ld. CIT(A) has dismissed the appeal ex parte due to non-prosecution and has not adjudicated the case on merits. Moreover, the Ld. CIT(A) has not decided each ground of appeal after discussing the issues in detail and his reasons for agreeing with the assessment order though he, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen for his consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues which arise from the impugned order before him/her, whether or not these issues have been raised by the assessee before him/her.
7. Section 251(1)(a) of the Act provides that while disposing of an appeal against assessment order, the CIT(A) shall have the power to confirm, reduce, enhance or annul the assessment. Similarly, the section 251(1) (b) of the Act provides that in disposing of an appeal against an order imposing a penalty, the CIT(A) may confirm or cancel such orders or vary it so as to either to enhance or to reduce the penalty. On cumulative consideration of Ramgiri the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, it is concluded that the CIT is not empowered to dismiss the appeal for non- prosecution of appeal and is obliged to dispose of the appeal on merits. In this regard, the finding of the Delhi Bench in the case of MARC Laboratories Ltd. in 2732, 2733, 2730, 2734 & 2735/DEL/ 2022 is worth extracting as under:
“5. We straightway refer to Section 250(6) of the Act which enjoins that the CIT(A) shall state the points for determination before it and the decision shall be rendered on such points along with reasons for the decision. Thus, it is incumbent upon the CIT(A) to deal with the grounds on merits even in ex parte order. In view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution. This view is also taken by the Hon'ble Bombay High Court in case of CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.). A bare glance of the order of the CIT(A) shows that CIT(A) has not addressed itself on various points placed for its determination at all and dismissed the appeal of assessee for default in non-appearance. Needless to say, the CIT(A) plays role of both adjudicating authority as well as appellate authority. Thus, the CIT(A) could not have shunned the appeal for non- compliance without addressing the issue on merits.
6. In the totality of the circumstances, we consider it just and expedient to restore the matter back to the CIT(A) in the larger interest of justice with a view to enable the assessee to avail proper opportunity for disposal of appeal by the CIT(A) on various points. The assessee is cautioned to extend full co-operation to the CIT(A) without any demur, failing which, the CIT(A) shall be at liberty to conclude the appellate proceedings in accordance with law. Hence, the order of the CIT(A) appealed against, is set aside and all the issues raised in the impugned appeal are restored back to the file of the CIT(A) for fresh adjudication in Ramgiri accordance with law after giving reasonable opportunity of hearing to the assessee.” 8. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the AO for deciding the case afresh, in accordance with law, after providing adequate opportunity of being heard to the appellant/assessee. The appellant/assessee, no doubt, shall cooperate in remitted assessment proceedings.
In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in open Court on 17thFebruary, 2025