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Facts
The assessee filed an appeal against the CIT(A)'s order for A.Y. 2015-16, which stemmed from a reassessment order under sections 147, 144, and 144B. The CIT(A) had dismissed the assessee's appeal solely for non-compliance without addressing the merits or legal grounds raised, including challenges to the validity of the reassessment notice and an addition for unexplained money. No one appeared for the assessee at the ITAT hearing.
Held
The Tribunal, relying on the Bombay High Court's ruling in Pr. CIT vs. Premkumar Arjundas Luthra, held that the CIT(A) is obligated to decide an appeal on merits and lacks the power to dismiss it for non-prosecution. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter for de-novo adjudication on all grounds, including legal grounds, after providing the assessee an opportunity to present necessary documents.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-compliance without adjudicating on merits, and the validity of reassessment proceedings including time-barred notice, jurisdictional issues, non-supply of approval for reopening, and unexplained money addition.
Sections Cited
Section 250, Section 147, Section 144, Section 144B, Section 148A(b), Section 148A(d), Section 148, Section 149(1)(b), Section 151A, Section 250(4), Section 250(6), Section 251(1)(a), Section 251(1)(b), Explanation to sub-section (2) of Section 251, Section 246A
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16 dated 03.11.2025 emanating from the Assessment Order passed under section 147 read with section 144 read with section 144B of the I.T.Act, 1961 dated 07.03.2024. The Assessee has raised the following grounds of appeal :
AO in notice u/s 148A(b) is factually incorrect and hence the order u/s 148A(d) and notice u/s 148 and also consequential reassessment order are bad in law.
On the facts and in law the AO has not made addition on the reason for which the case was reopened and hence the notice issued u/s 148 and reassessment order are bad in law.
On the facts and in law the notice issued u/s 148 on 05/04/2022 i.e. after expiry of 3 years for A.Y. 2015-16 is time barred and bad in law as per provision of section 149(1)(b) of the Act as the income allegedly escaped assessment as assessed by the AO is much below Rs. 50 Lakhs.
4 On the facts and in law the notice issued u/s 148 on 05/04/2022 by Jurisdictional AO is contrary to the CBDT mandate issued by notification dated 29/03/2022 rws 151A of the Act directing that all notices u/s 148 after 29/03/2022 shall be issued under faceless scheme and not by Jurisdictional AOs and therefore the said notice u/s 148 is to be declared as null and void in law.
5 On the facts and in law, the re-assessment proceedings are bad in law as, the copy of approval for re-opening the assessment is not supplied to the assessee along with notice u/s 148 as laid down in CBDT instructions and decision of Honorable Delhi High Court which was confirmed by Supreme Court.
On the facts and in law the addition on account of unexplained money Rs.6,09,361/-is not justified as the only source of income of the assessee and her family was agricultural income.
The appellant craves leave to add alter delete above or any other ground/s of appeal.” 2. At the outset of hearing, no one attended for hearing on behalf of the assessee. No adjournment application filed.
2.1 In this case, as per record we observe that assessee’s appeal was dismissed by the ld.CIT(A) without discussing each and every ground and merits of the case and merely dismissed for non- compliance.
Submission of ld.Departmental Representative(ld.DR) : 3. The ld.DR for the Revenue relied on the order of Assessing Officer(AO) and ld.CIT(A)[NFAC].
Findings & Analysis : 4. We have heard ld.DR for the Revenue and perused the records. In this case, ld.CIT(A) has dismissed the appeal of the assessee as assessee failed to file any reply to notices issued by ld.CIT(A). Ld.CIT(A) has not adjudicated the grounds raised by the Assessee.
It is observed from the order of the ld.CIT(A) that the ld.CIT(A) did not decide the grounds of appeal on merit but merely dismissed the appeal of the assessee for non-compliance. The ld.CIT(A) has not adjudicated grounds raised by the assessee on merits including Legal Ground raised by the Assessee.
6. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) (Bombay)/[2017] 297 CTR 614 (Bombay) as under : Quote, “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 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 coterminous 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 4 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.” Unquote. 6.1 Thus, the Hon’ble Bombay High Court has categorically held that ld.CIT(A) has to decide the appeal on merit and ld.CIT(A) does not have any power to dismiss appeal for non-prosecution.
7. In view of the above, in the interest of justice, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall provide opportunity to the assessee. We also direct ld.CIT(A) adjudicate the Legal Ground raised by the Assessee on merits. Assessee shall file all the necessary documents before the ld.CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 11 February, 2026.