OM PRAKASH RATHI,RAJGARH vs. DCIT/ACIT 2 (1), UJJAIN

ITA 457/IND/2025Status: DisposedITAT Indore27 February 2026AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had failed to comply with the mandate of Section 250(6) of the Income-tax Act, 1961, by dismissing the appeal for non-prosecution without adjudicating on merits and without providing sufficient opportunities to the assessee. The Tribunal also noted that the AO's order could be considered ex-parte due to the lack of further opportunity after the assessee's reply. Upholding the principles of natural justice and considering that no prejudice would be caused to the revenue, the Tribunal decided to remand the matter back to the file of the AO for fresh adjudication. The AO was directed to provide necessary opportunities of hearing to the assessee and pass an appropriate order, uninfluenced by the earlier order. The assessee was also directed to be vigilant and ensure participation in hearings without seeking unnecessary adjournments. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, engaged in trading tractor spare parts and related items, filed a return for AY 2012-13 declaring an income of Rs. 12,15,660/-, which was assessed at Rs. 12,80,370/-. The Assessing Officer (AO) reopened the case under Section 147 and, after re-assessment, disallowed Rs. 3,69,272/- of interest expenditure, citing its utilization for non-business purposes like purchasing land and flats. The assessee appealed to the Commissioner of Income-Tax (Appeals) [CIT(A)], who dismissed the appeal in limine for non-prosecution without adjudicating on merits. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the CIT(A)'s order.

What were the issues?

1. Whether the CIT(A) erred in dismissing the assessee's first appeal for non-prosecution without complying with the mandate of Section 250(6) of the Income-tax Act, 1961, which requires the order to be in writing, stating points for determination, decision, and reasons, thereby violating the principle of natural justice? - Assessee's contention: The CIT(A) failed to provide reasonable and necessary opportunities for hearing, citing the limited number of hearings and the long gaps between them, including one during the Covid-19 pandemic. The dismissal for non-prosecution without proper adjudication is contrary to Section 250(6). - Revenue's contention: Not recorded. 2. Whether the AO's re-assessment order was ex-parte and passed without providing adequate opportunity to the assessee to present their case, warranting a remand to the AO for fresh adjudication? - Assessee's contention: The AO rejected the assessee's reply to a show-cause notice and made the disallowance without giving any further opportunity for hearing. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 250(6),Section 147,Section 143(3),Section 148,Section 142(1),Section 139

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri Harsh Vijayvargiya, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 26.02.2026Pronounced: 27/02/2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first-appeal dated 25.03.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A), Prayagraj [“CIT(A)”] which in turn arises out of assessment-order dated 14.12.2019 passed by learned ACIT-2(1), Ujjain [“AO”] u/s 147/143(3) of Income-tax Act, 1961 [‘“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed

this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

Om Prakash Rathi ITA No. 457/Ind/2025 - AY 2012-13

2.

The background facts leading to present appeal are such that the assessee is engaged in the business of trading of tractor spare parts, accessories, pesticides, oil, generators, etc. For AY 2

The order continues below.

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