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Facts
The assessee, engaged in card-box manufacturing, filed an ITR for AY 2017-18. A survey u/s 133A led to a disclosure of Rs. 1.25 crores, with Rs. 65 lakhs attributed to AY 2017-18, which the assessee later retracted, claiming no incriminating material. The AO added Rs. 65 lakhs to income. The CIT(A) dismissed the assessee's appeal ex-parte for non-compliance with notices, without deciding on the merits of the case.
Held
The Tribunal held that the CIT(A) erred by dismissing the appeal for non-prosecution without passing a speaking order on merits, which is mandated by Section 250(6) of the Income Tax Act. Citing legal precedents, it affirmed that the CIT(A) must adjudicate appeals on merits after providing a reasonable opportunity of hearing. Consequently, the case was remitted back to the CIT(A) for fresh adjudication in accordance with the law.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding it on merits, and if the CIT(A) is statutorily obligated to pass a speaking order addressing the grounds of appeal, rather than merely upholding the AO's order.
Sections Cited
Section 250, Section 251, Section 133A, Section 142(1), Section 143(3), Section 80-IE, Section 246A, Rule 46A of the Income-tax Rules, 1962
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Income Tax Appellate Tribunal, GUWAHATI BENCH AT KOLKATA
Before: SRI DUVVURU RL REDDY(KZ) & SRI RAKESH MISHRA
order
: January 20th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)-Central. NER, Guwahati [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated Page 3 of 13 Page 5 of 13 Page 8 of 13 Page 9 of 13 “7. An appeal is filed with the CIT(A) from appealable orders listed in Section 246A of the Act. We find that the procedure in appeal before the CIT(A) and the powers of the CIT(A) are governed by Sections 250 and 251 of the Act respectively. The relevant provisions for consideration are as under:— 'Procedure in appeal 250 (1) . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . (4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). (5) . . . . . . . . . . . . . . . . . . (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (6A) . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . Powers of the Commissioner (Appeals)