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Facts
The assessee, Novel Deal Private Limited, engaged in liquor sales, filed a return declaring Rs.1,92,320/- income. The AO assessed income at Rs.13,95,150/-, making additions under Section 68 for unconfirmed sundry credits, excess cash deposits, rental income, and commission expenses. The CIT(A) subsequently dismissed the assessee's appeal for non-prosecution due to non-compliance with hearing notices.
Held
The ITAT held that the CIT(A) erred in dismissing the appeal for non-prosecution, stating that Section 251 of the Income-tax Act does not empower such an order. Consequently, the tribunal remitted the entire issue back to the CIT(A) for fresh consideration, instructing to provide the assessee with an adequate opportunity of being heard.
Key Issues
Whether the CIT(A) has the power to dismiss an appeal for non-prosecution under Section 251 of the Income-tax Act, 1961, and if such dismissal is valid.
Sections Cited
143(3), 68, 251
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI
(Assessment Year: 2017-18) Novel Deal Private Limited, vs. ITO, Ward 18 (4), Nangia Park, New Delhi. Rajouri Garden, Delhi – 110 027. (PAN : AAACN2204L) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri R.S. Singhvi, CA Shri Rajat Garg, CA REVENUE BY : Shri Om Prakash, Sr. DR Date of Hearing : 30.01.2024 Date of Order : 02.02.2024
ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER :
This appeal by the assessee is directed against the order of the ld. CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated 10.10.2023 for the assessment year 2017-18.
Brief facts of the case are that the assessee is a private limited company engaged in the business of sale of liquor. The assessee field return of income on 30.10.2017 declaring income of Rs.1,92,320/-. The case was selected for scrutiny on the ground that low income from TCS receipts – Liquor (TCS and profit in Part B-T/Part A-P & L of ITR) whether income
Liquor business has been correctly offered for tax. The case was assessed u/s 143 (3) of the Income-tax Act, 1961 (for short ‘the Act’) assessing income at Rs.13,95,150/-. The AO made the addition u/s 68 of the Act on account of unconfirmed sundry credits of Rs.3,35,718/-, excess cash deposits of Rs.1,87,110/-, rental income of Rs.3,30,000/- and commission expenses of Rs.3,50,000/-.
Upon assessee’s appeal, in this regard, ld. CIT (A) noted that hearing notices to the assessee have not been complied with, hence citing various decisions, ld. CIT (A) dismissed the appeal for non-prosecution. Ld. CIT (A) held that in absence of any response from the assessee, he found no reason for any change in the order of AO.
Against this order, assessee has filed appeal before me. I have heard both the parties and perused the records.
Ld. Counsel of the assessee prayed that an opportunity may be granted to the assessee before the ld. CIT (A) to properly canvass the appeal. Per contra, ld. DR for the Revenue did not have any serious objection to this proposition.
Upon careful consideration, I find that ld. CIT (A) has virtually dismissed the appeal for non-prosecution. Section 251 of the Income-tax Act, 1961 (for short ‘the Act’) does not empower the ld. CIT (A) to pass
such order. Hence, in the interest of justice, I remit the issue to the file of ld.
CIT (A). Ld. CIT (A) shall consider the issue afresh after giving adequate opportunity of being heard to the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open court on this 2nd day of February, 2024.