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Facts
The assessee, a public charitable trust, filed seven appeals against the CIT(A)'s orders for various assessment years, challenging additions made by the Assessing Officer for estimated income based on gross fee receipts and additional income from uniform/book sales. The CIT(A) had dismissed these appeals for non-compliance without adjudicating on merits.
Held
The tribunal, relying on a Bombay High Court ruling, held that the CIT(A) is mandated to decide appeals on their merits and lacks the power to dismiss them for non-prosecution. Consequently, the tribunal set aside the CIT(A)'s orders and remanded all seven cases for de novo adjudication, instructing the CIT(A) to provide the assessee with an opportunity to present all necessary documents.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-compliance without adjudicating on merits; whether the estimated additions to income made by the AO were justified.
Sections Cited
Section 250, Section 250(4), Section 250(6), Section 251(1)(a), Section 251(1)(b), Section 251(2), Section 246A
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Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
ORDER PER BENCH : These seven appeals filed by the assessee are directed against the separate orders ld.Commissioner of Income Tax(Appeal), Pune- 12 passed under section 250 of the Income Tax Act, 1961(hereinafter referred to as „the Act‟) for the assessment years referred above. Assessee has filed identical grounds for all these Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal years. Since the issue involved is common, all these appeals were heard together and decided by the common order. We treat Appeal in IT(SS)A No.39/PUN/2025 for A.Y.2018-19 as lead case. The Assessee has raised the following grounds of appeal : “The Hon. CIT(A) erred in upholding the addition of Rs.1,09,41,454/- as estimated income, being the difference between income declared by the appellant and income determined by the ld AO at the rate of 60% of the gross fee receipts, not appreciating the facts of the case WHARE the appellant being public charitable trust manages a school and a junior college in a low to middle class area and therefore such excessive determination of income on adhock basis is not 1 justified and the addition of Rs.1,09,41,454/- may kindly be deleted.
1. 1. 1. 1. 4. The Hon. CIT(A) erred in upholding the addition of Rs. 13,35,780/- (Rs.8,80,400/- + Rs.4,55,380/-) as additional income, on account of sale of uniforms and commission from the sale of books, not appreciating the explanation of the appellant and therefore, the addition is not justified and is required to be deleted.
5. Your appellant craves leave to add, alter, amend, DLEETE, and/0R vary any of the above grounds of appeal at any time before the decision.”
Brief facts of the case : S.No. Number A.Y. Date of Date of order order Ld.CIT(A) Assessing Officer 1 IT(SS)A No.39/PUN/2025 2018-19 01.10.2025 30.09.2021 2 IT(SS)A No.40/PUN/2025 2019-20 01.10.2025 30.09.2021 3 IT(SS)A No.41/PUN/2025 2014-15 01.10.2025 29.09.2021 4 IT(SS)A No.42/PUN/2025 2016-17 01.10.2025 29.09.2021 5 IT(SS)A No.43/PUN/2025 2017-18 01.10.2025 29.09.2021 6 ITANo.2930/PUN/2025 2015-16 01.10.2025 29.09.2021 2 7 2020-21 01.10.2025 30.09.2021 Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal Submission of ld.AR : 2. The ld.Authorised Representative(ld.AR) for the Assessee submitted 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. Ld.AR submitted that Assessee may be provided one more opportunity to file details before the ld.CIT(A).
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 both the parties 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. Ld.AR submitted that one more opportunity may be provided to the Assessee.
4.1 Ld.CIT(A) held as under : “6.2 Now coming to the merits of the case, I have perused the order 3 passed by the Assessing Officer. The order is a speaking order, wherein Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal the AO has discussed the facts of the case and has given cogent reasons and made addition on appropriate grounds. The appellant has neither said nor submitted any evidences to rebut the arguments marshaled by the Assessing Officer. Considering the reasons stated in the order of the Assessing Officer for making this addition, I have no reason to disagree with the order passed by the AO. Ground raised by the appellant is hereby dismissed.
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. Assessee had raised following grounds of appeal before the ld.CIT(A) : “In the facts and in the circumstances of the case and in the law the Assessing Officer erred in making addition of Rs. 1,09,41,454/- on estimated basis at60percent of gross fees receipts from students of Rs.1,99,77,323/- as against at5percent computed by the appellant without considering all evidences on record and therefore, the said addition may be deleted.
2 In the facts & in the circumstances of the case and in the law, the Assessing Officer erred in making addition of Rs.13,35,780/- in all assessment years from 2014-15 to 2020-21 merely on the basis of statement of one of the employee of the Trust recorded during survey proceeding and on the basis of WhatsApp conversation without any discriminating evidence in respect of relevant A.Y. Therefore the said addition may be deleted. 4 Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal 3 In the facts & in the circumstances of the case and in the law, the Assessing Officer assessed the income of the appellant without giving sufficient opportunity of being heard which is against natural justice and therefore the Assessment Order dated 30/09/2021 may be cancelled.
4 The appellant craves leaves to add/ modify/ amend/ delete/ all/ any of the grounds of appeal and lead evidence/additional evidences.
5.1 However, ld.CIT(A) has not adjudicated these grounds.
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 5 raised by the appellant in its appeal before the CIT(A). Thus once an Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal 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 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.” 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.
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. Assessee shall file all the necessary documents before the ld.CIT(A). Accordingly, 6 Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee in IT(SS)A No.39/PUN/2025 is allowed for statistical purpose.
IT(SS)A Nos. 40, 41, 42 & 43/PUN/2025 and & 2935/PUN/2025 9. Since we have already discussed and decided the same issue in the “Lead Case – IT(SS)A No.39/PUN/2025”, the said decision shall mutatis-mutandis apply to all these appeals i.e. IT(SS)A Nos.40, 41, 42 & 43/PUN/2025 and & 2935/PUN/2025 also. Therefore, grounds of appeal raised by the Assessee are allowed for statistical purpose.
To sum up, all the seven appeals filed by the Assessee are allowed for statistical purpose. Order pronounced in the open Court on 04 February, 2026. ASTHA CHANDRA Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ददन ांक / Dated : 04 Feb, 2026/ SGR 7 Rajrshi Shahu Chhatrapati Bahuudeshiy Shikshan Prasarak Mandal