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Facts
The Assessing Officer made an addition of Rs. 21,38,052/- for unexplained cash deposits under Section 144 due to the assessee's failure to respond to notices under Section 142(1). The CIT(A) subsequently dismissed the assessee's appeal for non-prosecution and on merits, as the assessee again failed to participate in the appellate proceedings.
Held
The Tribunal held that the Act does not mandate the CIT(A) to dismiss an appeal merely for non-prosecution and requires a reasoned order on merits. While noting the assessee's non-cooperative conduct, in the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the appeal to the CIT(A) for fresh adjudication after providing a reasonable opportunity to the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without a reasoned order, and the appropriate procedure for handling non-cooperative assessees in appellate proceedings.
Sections Cited
Section 142(1) of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI
(A.Y.2017-18) Nepal Singh, 6RA, Quarter No. 66, Ordnance Factory Estate, Muradnagar, Ghaziabad, U.P 201002 ...... अपीलाथ�/Appellant PAN: CKGPS-5165-Q बनाम Vs. Income Tax Officer, Ward-2(2)(5), Ghaziabad ..... �ितवादी/Respondent Uttar Pradesh 201001 अपीलाथ� �ारा/ Appellant by : None �ितवादी�ारा/Respondent by : Ms. Shivani Bansal, Sr. DR सुनवाई क� ितिथ/ Date of hearing : 12/09/2024 घोषणा क� ितिथ/ Date of pronouncement : 12/09/2024 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against an ex-parte order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred as to 'the CIT(A)') dated 08.04.2024, for assessment year 2017-18.
A perusal of the assessment order shows that notice u/s. 142(1) of the Act was issued to the assessee on 17.01.2018, 09.08.2019, 03.09.2019 and 18.09.2019. Except to the notice issued on 09.08.2019, the assessee has not responded to any of the notices. In response to notice dated 09.08.2019, the assessee had furnished manual reply on 30.08.2019. The Assessing Officer (AO) completed the assessment u/s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) making addition of Rs. 21,38,052/- on account of unexplained cash deposits in the savings bank account. In the First Appellate proceedings, again the assessee failed to furnish any reply. He did not respond to the initial three notices issued by the CIT(A) on 11.01.2021, 02.03.2022 and 09.95.2022. In response to the subsequent notices dated 19.02.2024, 14.03.2024 & 21.03.2024, the assessee repeatedly sought adjournment. Hence, there was no participation by the assessee either in the assessment proceedings or in the First Appellate proceedings. The CIT(A) dismissed appeal for non prosecution. The CIT(A) further making sketchy remarks has dismissed appeal of the assessee on merits, as well.
Submissions made by ld. DR heard and orders of the authorities below examined. At the outset, it is pointed that the Act does not mandate the CIT(A) to dismiss appeal for non prosecution. The CIT(A) has to pass a reasoned order on merits. The conduct of the assessee before, the AO during assessment proceedings and the CIT(A) in First Appellate proceedings reveal that he has been non cooperative and has scanty respect for the notices issued by tax authorities. It is a fit case for levy of cost for non compliance of statutory notices issued by the authorities below. However, I restrain myself from levying cost at this stage. Taking into consideration entire facts and in the interest of justice, I deem it appropriate to restore this appeal to the file of CIT(A) for fresh adjudication. The CIT(A) after affording reasonable opportunity of making submissions to the assessee shall pass the order, in accordance with law.
The assessee is directed to respond to the notice(s) served by the CIT(A), without fail.
In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on Thursday the 12th day of September, 2024.