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Facts
The assessee, a private limited company providing security and maintenance services, failed to file an income tax return for Assessment Year 2014-15. The Assessing Officer (AO) issued a notice under Section 148 after complying with Section 148A, alleging escaped income based on contractor payments and cash deposits. The assessee did not comply with the notices, leading the AO to assess total income at Rs. 35,14,814/- by estimating profit at 7% of contractor payments.
Held
The Tribunal held that the CIT(A) erred by dismissing the appeal for non-prosecution without considering the merits of the case. As per Section 250(6) of the Act, the CIT(A) is obligated to frame points of determination and provide a detailed discussion, even when disposing of an appeal ex-parte. The matter was therefore remanded to the CIT(A) for de novo disposal on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without adjudicating the case on merits, and whether the matter should be remanded for fresh consideration.
Sections Cited
139, 148, 148A, 147, 142(1), 250(6)
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: HON’BLE SHRI INTURI RAMA RAO & SHRI SS VISWANETHRA RAVI
Assessment Years: 2014- Assessment Years: 2015- Assessment Years: 2016- Assessment Years: 2017-18 Power Security Corp Pvt Ltd., Income Tax Officer, New No.18, Old No.22, Lake Area, Corp Ward-5(2), 1st Cross Street, Nungambakkam, Chennai. Chennai-600 034. [PAN: AAGCP2703C] Appellant Respondent Assessee by : Ms.Varsha Sridhar, Advocate for Mr.Y.Sridhar, F.C.A. Revenue by : Mr.SBR Kumar Laghimsetti, Addl.CIT Date of Hearing : 20.01.2026 Date of Pronouncement : 27.01.2026 O R D E R PER INTURI RAMA RAO, A.M :
These four appeals filed by the assessee - Company are directed against the order of the NFAC, Delhi (herein after called CIT(A)’ in short], dated 01.10.2025 for the Assessment Years 2014-15, 2015-16, 2016-17 and 2017-18 respectively.
2.0 Since identical facts and issues are involved in four of these appeals, these appeals were heard together and disposed of vide this common order.
4.0 Briefly, the facts of the case are that the appellant is a private limited company engaged in providing security, surveillance, cleaning and building maintenance services. No return of income for the Assessment Year 2014- 15 was filed under the provision of 139 of the Act. However, based on the information, the appellant made payments to the contractor and made cash deposits in the bank, the AO formed an opinion that income got escaped assessment from tax. Accordingly, issued notice u/s 148 on 31.07.2022 after duly complying with the procedure laid u/s 148A of the Act. The appellant had not complied with the said notice u/s 148 nor complied the notice u/s 142(1). In circumstances, the AO proceeded with framing of the assessment order u/s 147 of the Act vide order dated 18.04.2023 at a total income of Rs.35,14,814/-. While doing so, the AO estimated the profit at 7% of the payment made to contractor.
5.0 Being aggrieved by the above assessment order, a rectification petition was filed before the AO stating that a notice u/s 148 was barred by Page - 2 - of 4 limitation. The rectification petition was dismissed by the AO vide order dated 13.06.2025. Being aggrieved by the said order, an appeal was filed before the CIT(A), who vide impugned order dismissed the appeal by holding that there is no mistake apparent on the record. Being aggrieved, the assessee is in appeal before us in the present appeal.
6.0 We have heard the rival submissions and perused the material available on records. We find that the CIT(A) dismissed the appeal of the appellant for non-prosecution without entering into the merits of the addition. The CIT(A) without dealing with the contentions of the appellant merely dismissed the appeal in limine for non-prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal ex-parte, he is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position, we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.
Page - 3 - of 4 7.0 In the result, the appeal No. ITA-3506/Chny/2025 for the Assessment Year 2014-15 filed by the assessee is partly allowed for statistical purposes.
8.0 Since the facts and issues involved in the present appeal of the assessee is identical, therefore, our decision in A.Y. 2014-15 shall apply mutatis mutandis to the appeal nos. in for A.Y-2015-16, for A.Y- 2016-17 and for the A.Y 2017-18 also.
9.0 In the result, the four appeals filed by the assessee are partly allowed for statistical purposes.
Order pronounced on 27th , January-2026 at Chennai.