SHIVAJS CORPORATION PVT. LTD. ,JODHPUR vs. ITO, WARD-1(4), JODHPUR

At the outset, the Id. counsel for the assessee submitted that the Id. JCIT (A) Delhi has rejected the appeal of the assessee without giving sufficient opportunity of being heard and rejected the appeal by passing an order ex-parte qua the assessee, without considering the submission & documentary evidence filed on record and recorded incorrect finding in arbitrary manner that no compliance of notice were made by assessee whereas the submission and complete evidence were available on online portal. She contended that the JCIT has passed a non-speaking, and non-reasoned order, which is not sustainable under law as the IT Act does not provide power to the Id. JCIT(A) to dismiss the appeal exparte. In support, She placed reliance on the judgment delivered by the Hon'ble ITAT Delhi Bench in the case of Corporate International Finance Service Ltd. v. ITO in ITA No. 2147/Del/2017 (APB pgs. 36 to 38) which reads as under: "What cannot be permitted in law to be done directly, cannot be permitted to be done indirectly either, as is well settled. In view of the foregoing discussion; it is amply clear that Ld. CIT(A) was in error in dismissing the appeal in limine for non-prosecution of appeal by the assessee. We draw support from order of Hon'ble Bombay High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) [2016] 240 taxman 133 for the proposition that Ld. CIT(A) is required to apply her mind to all issues which arise from impugned order before her whether or not same had been raised by appellant before her; and further, that CIT(A) is obliged to dispose of the appeal on merits. In this case, it was held as under:

It is very dear once an appeal is preferred before the GT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks it or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CITT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it dear that while considering the appeal, the CTT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the OT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the OT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co- terminus with that of the Assessing Officer ie. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CTT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply dear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the OT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT (A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act." (C.2.1). In view of the foregoing, we hold that the Ld. CIT(A) erred in dismissing the appeal of the Assessee in limine for non-prosecution of appeal by assessee. We set aside the impugned order of the Ld. CIT(A) and we direct the Ld. CIT(A) to pass denovo order as per law, in accordance with Sections 250 and 251 of I.T. Act.

1 The Ld. AR for the assessee prayed that the matter may be restored to the file of the Ld. JCIT Appeal in view of natural justice to adjudicate the appeal afresh after granting adequate opportunity to the assessee.

Per contra, the Ld. Addl. CIT DR stands by the impugned order.

We heard both the sides, perused the record, impugned order and case law cited before us. It is undisputed fact that the Id. JCIT (A) has rejected the appeal of the assessee by passing an order ex-parte qua the assessee, merely stating that no submission was made by the appellant and that the appellant has not pursued the appeal despite being granted several opportunities without stating the facts regarding service of the notices on the appellant assessee. Meaning thereby that the Ld. JCIT(A) has rejected the appeal without granting sufficient opportunity of being heard in violation of principles of natural justice.

We know that as per provisions of the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act, the JCIT(A) is required to apply his mind to all the issues which arise from the impugned order before him whether the same has been raised by the appellant before him. Accordingly, the law does not empower the JCIT (A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. In our view, the Ld. JCIT(A) erred in dismissing the appeal of the Assessee exparte qua the assessee.

In the judgment delivered by the ITAT Delhi Bench in the case of Corporate International Finance Service Ltd. v. ITO (supra) following Hon'ble Bombay High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) [2016] 240 taxman 133 for the proposition that Ld. CIT(A) is required to apply her mind to all issues which arise from impugned order before her, whether or not same had been raised by appellant before her; and further, that CIT(A) is obliged to dispose of the appeal on merits, held that the Ld. CIT(A) erred in dismissing the appeal of the Assessee in limine for non-prosecution.

In the present case, the Ld. JCIT (A) has dismissed the appeal exparte qua the assessee for non-prosecution. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the JCIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT (A)/ADDL/JCIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. The matter is, therefore, remanded to the Ld. CIT(A)/ADDL/JCIT(A) as applicable to adjudicate the matter de novo after granting adequate opportunity of being heard to the appellant who shall cooperate before the CIT(A).

Accordingly, we set aside the impugned order of the Ld. ADDL/JCIT(A) who shall pass de novo order as per law, in accordance with Sections 250 and 251 of I.T. Act.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 24/03/2024 under Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. (DR. MITHA LAL MEENA) ACCOUNTANT MEMBER Dated: 24/03/2025 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By Oder