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Facts
The assessee's appeal against an assessment order for AY 2011-12, which involved additions under sections 143(3) r.w.s 147 for unexplained cash credits (u/s 68) and interest income, was dismissed *in limine* by the CIT(A) for non-prosecution. The assessee contended that CIT(A) notices were served on email despite having explicitly opted out of email communication in Form 35, leading to non-compliance, and that the CIT(A) failed to adjudicate the grounds on merit.
Held
The tribunal noted that the CIT(A) dismissed the appeal without adjudicating the grounds of appeal on merit, contrary to the Bombay High Court's ruling that a CIT(A) is obligated to decide appeals on merit and cannot dismiss them for non-prosecution. Furthermore, the assessee had specifically chosen not to receive notices via email. Consequently, the tribunal set aside the CIT(A)'s order and remanded the case for *de novo* adjudication on merits.
Key Issues
1. Whether the CIT(A) can dismiss an appeal for non-prosecution when the appellant did not receive email notices due to having opted out of email communication. 2. Whether the CIT(A) is obligated to adjudicate all grounds of appeal on merit and cannot dismiss an appeal *in limine*. 3. Validity of reassessment proceedings under section 147 for alleged procedural lapses and validity of additions under section 68.
Sections Cited
250, 143(3), 147, 148, 143(2), 151, 68, 246A, 250(4), 250(6), 251, 251(1)(a), 251(1)(b), 251(2)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
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.2011-12 dated 28.07.2023 emanating from the Assessment Order passed under section 143(3) r.w.s 147 of the Act, dated 27.12.2017. The Assessee has raised the following grounds of appeal :
The learned CIT(A) erred in dismissing the appeal in limine for non-prosecution of appeal without passing a speaking order adjudicating the grounds of appeal and detailed contentions advanced vide Statement of Facts uploaded electronically at the time of filing appeal, without appreciating that the said action of the Id. CIT(A) was not justified in view of the law laid down by Hon'ble Jurisdictional Bombay High Court in Premkumar Arjundas Luthra [(2017) 297 CTR 614].
2] Without prejudice to Ground No. 1 above, the assessee submits that the notices of hearing u/s 250 issued by the CIT(A) were served on email id of the appellant and not by post, whereas the appellant had specifically chosen "No" for the option of receiving notices/communications over email as the appellant was not acquainted with using emails and therefore, there was a reasonable cause due to which the notices issued by the CIT(A) could not be complied by the appellant and hence, it is prayed that the matter may please be set aside to the file of the CIT(A) in the interest of justice.
3] Without prejudice to the above grounds, the appellant submits that the learned A.O. failed to issue notice u/s 143(2) in response to the return filed by the appellant u/s 148 and therefore, the re-asst. order u/s 147 proceedings may be declared as bad in law being with jurisdiction.
4] Without prejudice to the above grounds, the appellant submits that the learned A.O. has failed to supply the copy of reasons recorded for re-opening the asst. of the appellant u/s 147 as contemplated by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. v. ITO [2002] 125 Taxman 963 and therefore, the entire re-asst. proceedings may be declared as voidab initio.
5] Without prejudice to the above grounds, the appellant submits that the application sent by the A.O. to the higher authority for obtaining approval u/s 151 and the approval u/s 151 obtained from the Higher Authority u/s 151 has not been confronted to the appellant along with the Notice u/s 148 and hence, the notice u/s 148 may be declared as null and void in view of CBDT instructions F.No.299/10/2022- Dir(Inv.III)/611 Dated: 01.08.2022 as well as the law laid down by Hon'ble Delhi High Court in Tia Enterprises (P) Ltd. Vs. ITO [(2024) 468 ITR 5], with the SLP in this case being dismissed by the Hon'ble Supreme Court. 2 6] The learned CIT(A) erred in confirming the addition u/s 68 of Rs.21,78,500 made by the A.O. by holding that the entire cash deposits made in bank accounts of the appellant are to be treated as unexplained cash credits without appreciating that the said cash deposits represented agricultural income of the appellant and is therefore, apparently unjustified on facts of the case and in law.
7] The learned CIT(A) ought to have appreciated that the addition of Rs.30,243 made by the A.O. was, in fact, interest received on Fixed Deposits made by the appellant and was duly disclosed in the return filed u/s 148 which tantamount to double taxation of same income and therefore, the said addition deserves to be deleted.
8] The appellant craves leave to add/alter/ amend any of the grounds of appeal
.” Findings & Analysis :
2. We have heard both the parties and perused the records. In this case, Assessee was issued notice u/s.148 on 31.03.2017 which was served on assessee on 08.04.2017. Assessee filed return of income in response to notice u/s.148 on 03.10.2017 declaring total income at Rs.4,71,770/-. There were cash deposits in the bank account, however, assessee failed to file any submission during assessment proceedings. Hence, Assessing Officer added Rs.22,08,743/- to the returned income. Aggrieved by the assessment order, Assessee filed appeal before ld.CIT(A).
4. In this case, ld.CIT(A) has dismissed the appeal of the Assessee on account of non-compliance to the notices send by Email.
5. It is an admitted fact by ld.DR for the Revenue that Assessee in Form No.35 had specifically mentioned that Assessee do not want to receive notices on Email. Inspite of this, ld.CIT(A) had sent notices to Email of the Assessee. Assessee has pleaded that he has not received any of the notices, hence, he could not comply.
We have observed that ld.CIT(A) has not adjudicated the grounds of appeal raised by Assessee which includes legal ground also. It is mandatory for ld.CIT(A) to decide the grounds on merit.
7. 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 4 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 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. 8.1 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. 5 Ld.CIT(A) shall provide opportunity to the assessee. 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. Delay :
We have perused the Affidavit filed by Assessee. We are convinced that there was sufficient and reasonable cause for delay, hence, Delay is condoned.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 30 January, 2026.