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Facts
The assessee appealed the CIT(A)'s order which dismissed their appeal without examining the merits. The CIT(A)'s order was passed ex-parte and lacked discussion on the grounds of appeal or statement of facts. The assessee contended that the CIT(A) erred in passing an ex-parte order and making an unreasonable addition without proper consideration.
Held
The Income Tax Appellate Tribunal held that the CIT(A)'s order was not sustainable in law because it was not decided on merits as required by Section 250 of the Act. The Tribunal noted that the CIT(A) failed to discuss the grounds of appeal and statement of facts. Therefore, the order was set aside, and the appeal was restored to the CIT(A) for denovo adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits and in passing an ex-parte order. Whether the addition made by the CIT(A) was unreasonable and lacked proper basis.
Sections Cited
Section 143(3), Section 254, Section 250, Section 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, D BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI MS. PADMAVATHY S, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Dilip Singh, 231 Quay Street Reay Road Mumbai - 400010 [PAN: AAJPS1145F] …………. Appellant Vs Income Tax Officer 20(1)(4) Lalbaug, Parel, Mumbai - 400012 …………. Respondent Appearance For the Appellant/Assessee : None For the Respondent/Department : Smt. Mahita Nair Date Conclusion of hearing : 15.07.2024 Pronouncement of order : 19.07.2024 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Assessee has challenged the order dated 29/06/2022, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as the ‘CIT(A)’] for the Assessment Year 2009-10, whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 22/12/2018, passed by the Income Tax Officer 20(1)(4), Mumbai under Section 143(3) r.w.s. 254 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The Assessee has raised following grounds of appeal in : “1. The learned CIT(A) erred in law and facts in passing the impugned order. Assessment Year: 2009-10
2. The learned CIT(A) erred in law and on facts that an ex– parte order should be based on the material available on record.
2.2. The learned CIT (A) erred in law and on facts in making addition of Rs. 1,07,27,183 without realising that its effect on the net profit and gross margin of the said addition is unrealistic and unreasonable.”
When the appeal was taken up for hearing none was present on behalf of the Appellant. On perusal of the order impugned we find that the CIT(A) has dismissed the appeal without examining the merits of the matter. As per provisions contained in Section 250 of the Act, it is the statutory obligation of the CIT(A) to dispose of an appeal on merits. Section 250(6) of the Act lays down that the order passed by the CIT(A) shall be in writing and shall state the points for determination; the decision thereon; and the reason for the decision. [Marvel Industries Limited Vs. Deputy Commissioner of Income Tax, Circle 2(2)(2), Mumbai, dated 19/07/2022, ITA No. 779/Mum/2022]. The scheme of Section 250 of the Act does not visualize any situation in which an appeal can be summarily dismissed by the CIT(A) disregarding the material on record. On perusal of the order passed by the CIT(A) we find that there is no discussion on the averments made in the Statement of Facts filed before the CIT(A) as well as the grounds of appeal raised. Therefore, in view of the aforesaid, the order, dated 11/09/2023, passed by the CIT(A) is not sustainable in law as the CIT(A) was required to decide the appeal on merits. Accordingly, order dated 29/06/2022, passed by the CIT(A) is set aside and the appeal is restored back to the file of CIT(A) for denovo adjudication as per law.
4. In terms of above, Ground No. 2 is allowed while all the other grounds raised in the appeal are dismissed as being infructuous.
2 Assessment Year: 2009-10 5. In result, in terms of paragraph 4 above, appeal preferred by the Assessee is allowed for statistical purposes.