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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: SHRI RAJESH KUMAR (AM) & SHRI RAM LAL NEGI (JM)
O R D E R
PER RAM LAL NEGI, JM
This appeal has been filed by the assessee against the order dated 30.01.2015 passed by the Commissioner of Income Tax (Appeals)-25 (for short ‘the CIT(A), Mumbai, for the assessment year 2010-11, whereby the Ld. CIT(A) has dismissed the appeal filed by the assessee against the assessment order passed u/s 143 (3)) of the Income Tax Act, 1961 (for short the ‘Act’).
Aggrieved by the order of Ld. CIT (Appeals), the assessee has preferred this appeal before the Tribunal on the following effective grounds:-
1. “The learned Assessing Officer has erred in making various additions and disallowances without appreciating the facts and circumstances of the case in totality.
2. The learned Assessing Officer has erred in making various additions and disallowances without giving reasonable Assessment Year: 2010-11 opportunity of being heard to the appellant/without appreciating that appellant was prevented by sufficient cause in not being able to comply with the specific requirements.
3. The learned Assessing Officer is not justified in making addition of R. 60,04,850/- on account of capital introduction. During the year the appellant have procured the loans from banks besides earned the income from salary and partnership firm which is introduced as capital in proprietary business. 4. The learned Assessing Officer is not justified in making an addition of Rs. 1,00,000/- on account of unsecured loan. The appellant have taken all the loans through payees account cheques only. 5. Without prejudice to ground No. 4 raised hereinabove, the appellant submits that both on facts and in law, the assessing officer has erred in making addition inspite of the fact that the said liabilities are not only appearing in assessee’s regular books of accounts but there is nothing on record to show that either the creditor had waived the same or that the assessee had expressed any intention to write off the same in his books of accounts. 6. The learned Assessing Officer is not justified in making an addition of Rs. 73,800/- on account of non deduction of TDS from interest paid. The appellant have paid the interest without TDS against declaration under Section 197A. 7. The learned Assessing Officer is not justified in making an addition of Rs. 24,57,351/- on account of estimated net profit merely on assumption, presumptions and surmises. The appellant have declared the net profit after claiming the expenses as per proper and regular books of accounts which are quite reasonable and justified considering the nature and size of business. Assessment Year: 2010-11
The learned Assessing Officer is not justified in disallowing the deductions u/s 80C at Rs. 1,00,000/- on account of LIC premium paid/Housing loan repayment.”
This case was fixed for hearing on 02.01.2019. When the case was called out for hearing, none appeared on behalf of the assessee. The registry informed that the notice sent through registered post has received back un-served with the remarks ‘left’. Hence, we decided to dispose of the appeal of the assessee on the basis of material on record after hearing the departmental representative (DR).
Before us, the Ld. DR submitted that since the assessee did not appear before the Ld. CIT(A) despite service of notices issued, the Ld. CIT(A) has rightly decided the appeal ex-party and dismissed the same. 5. We have perused the material on record. One of the grievances of the appellant/assessee is that the learned CIT (A) has dismissed the appeal ex-party without giving reasonable opportunity to pursue its appeal. We notice that the learned CIT (A) has dismissed the appeal of the assessee on the ground that the assessee has failed to appear on 3/4 successive dates. The Hon'ble Bombay High Court in the case of Commissioner of Income Tax (Central) Nagpur vs. Premkumar Arjundass Luthra (HUF) [2017] 297 CTR 614 (Bom.) has inter alia held that the law does not permit the CIT(A) to dismiss the appeal for non-prosecution by the assessee. The operative part of the said judgment reads as under:-
8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the Assessment Year: 2010-11 CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the 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 the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.
The Hon’ble Supreme Court in the case of S.Chennappa Mudaliar (1969) 74 ITR 41 has held that dismissal of appeal for failure of appellant to appear is ultra vires. Assessment Year: 2010-11
Hence, in our considered view, the Ld. CIT(A) has passed the impugned order in contravention of the ratio laid down by the Hon’ble Supreme Court and the Hon’ble Bombay High Court in the aforesaid judgments. We therefore, set aside the order passed by the Ld.CIT(A) and remit the appeal back to the learned CIT(A) for deciding the appeal afresh on merits after affording a reasonable opportunity of being heard to the appellant/assessee. However, we direct the assessee not to seek adjournments on frivolous grounds during the appellate proceedings before the Ld. CIT(A). In the result, appeal filed by the assessee for assessment year 2010-2011 is allowed for statistical purposes.