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Facts
The assessee appealed against an assessment order (AY 2016-17) where the AO made various additions, including under section 50C and 56(2)(viib), assessing total income at Rs.1,22,43,000/-. The assessee contended that these additions were unjustified, particularly for transactions claimed as gifts or family settlements, not sales. The CIT(A) dismissed the assessee's appeal for want of prosecution and non-compliance with notices without addressing the merits.
Held
The Tribunal held that the CIT(A) has a statutory duty under section 250(6) of the Act to pass a speaking order on the merits of the case, even if the assessee does not appear. Dismissing the appeal for want of prosecution without considering the merits was erroneous. Therefore, the Tribunal set aside the CIT(A)'s order and directed the CIT(A) to pass a denovo order on merits after providing the assessee a reasonable opportunity.
Key Issues
Whether the CIT(A) can dismiss an appeal for want of prosecution without passing a speaking order on merits, as mandated by Section 250(6) of the Income Tax Act.
Sections Cited
Section 50C, Section 56(2)(viib), Section 147, Section 144B, Section 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH “DB”, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
This appeal has been filed by the assessee against the order of the Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi dated 18.02.2025 for the assessment year 2016-17. The grounds of appeal of the assessee are as under: -
1. Because in any view of the matter the additions of Rs.46,40,000/as made by the Assessing Officer on account of notional value of sale amount as made by the Assessing Officer is highly unjustified and in fact no such consideration was received by the assessee since it was the transaction among family members in form of gift and it was not sale hence the notional value as added by the AO and upheld by the CIT(A)/NFAC is highly unjustified, liable to be deleted.
2. Because in any view of the matter addition; of Rs.36,40,000/- as made by the Assessing Officer by invoking the provision of section 50C as made by the Assessing Officer and also upheld by the CIT(A)/NFAC is arbitrary to fact, be deleted.
3. Because in any view of the matter the addition of Rs.36,40,000/- as made by the Assessing Officer and also upheld by the CIT(A)/NFAC is not correct at all and leads to double addition since entire sale consideration involved is Rs.46,40,000/- has already been added Page 2 of 4 hence making the addition again on presumption basis is highly unjustified and liable to be quashed.
4. Because the addition of Rs.21,63,000/- as made by the Assessing Officer u/s 56(2)(viib) of the Act the on account of purchase of property which is incorrect and in fact no such purchase was ever made by the assessee and this fact duly stated before the Assessing Officer alongwith affidavit confirming that the transaction was gift in nature and not purchase as alleged hence the addition made by the AO and also upheld by the CIT(A)/NFAC, Delhi are unjustified, baseless and liable to be quashed.
5. Because the addition of Rs.18,00,000/- as made by the AO on account of undisclosed source for purchase of property as made by the AO and also upheld by the CIT(A)/NFAC are unjustified and in reality no such transaction/ consideration was involved in the said sale deed since it was transfer of property by way of family settlement and not sale deed hence entire addition is uncalled for.
6. Because the additions of Rs.46,40,000/-, Rs.36,40,000/-, Rs.21,63,000/-, Rs.18,00,000/- as made by the AO towards alleged sale and purchase of the property is nothing but an artificial addition since no consideration was involved in the said transaction hence entire additions made by the AO and also upheld by the CIT(A)/NFAC are on presumption and conjecture basis are arbitrarily and all additions are liable to be quashed.
Because the assessee has reserved his right to take any fresh ground of appeal
before hearing of the appeal.”
2. In this case, vide assessment order dated 06.05.2023 was passed by the Assessing Officer under section 147 read with section 144B of the Income Tax Act, 1961 (“Act”, for short) whereby the assessee’s total income was assessed at Rs.1,22,43,000/-. In the assessment order, the Assessing Officer made an addition under section 50C of the Act. The assessee’s appeal against the aforesaid assessment order was dismissed by the Ld. CIT(A) vide impugned appellate order dated 18.02.2025 of the Ld. CIT(A). The present appeal has been filed by the assessee in Income Tax Appellate Tribunal (ITAT) against the aforesaid impugned appellate order dated 18.02.2025 of the Ld. CIT(A).
3. At the time of hearing, there was no representation from the side of the appellant assessee. In the absence of any Page 3 of 4 representation from the assessee’s side, the Ld. Departmental Representative for Revenue was heard. On perusal of the impugned appellate order dated 18.02.2025 of the Ld. CIT(A), it is found that the Ld. CIT(A) dismissed the assessee’s appeal for want of prosecution, taking adverse view of non-compliance with notices issued by the office of the Ld. CIT(A). However, the Ld. CIT(A) has statutory duty, prescribed u/s 250(6) of the Act to pass a speaking order on the merits of the case, whether or not there was any representation from the assessee’s side. The order of the Ld. CIT(A) in disposing of the assessee’s appeal, is required to be in writing, and the order is further required to contain the point for determination, the decision thereon and the reason for the decision. Thus, it is the statutory duty of the Ld. CIT(A) to pass a speaking order on merits of the case. It can be readily inferred that dismissing the assessee’s appeal in limine, for want of prosecution, without going into the merits of the case was erroneous on the part of the Ld. CIT(A) having regard to provisions contained under section 250(6) of the Act. The Ld. Departmental Representative was of the opinion, at the time of hearing that the issue in dispute may be restored to the file of the Ld. CIT(A) with the direction to pass denovo order on merits.
In view of the foregoing, and as Departmental Representatives for Revenue is in agreement with this, in the specific facts and circumstances of the present; the impugned order of the Ld. CIT(A) dated 18.02.2025 is set aside and the Ld. CIT(A) is directed to pass denovo order in accordance with law, after providing reasonable opportunity to the assessee and with due regard for Section 250(6) of the Act. All grounds of appeal are treated as disposed of in accordance with the aforesaid direction.
Order was pronounced in open court on 30/09/2025