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Facts
The assessee's appeal was dismissed in-limine by the CIT(A) due to non-response to notices. The assessee's representative argued that additions were made for repayment of loans, which were not legally correct, and sought another opportunity. The tribunal noted the failure of the assessee to respond to notices.
Held
The tribunal held that the CIT(A) did not adjudicate the issues on merits. Considering the prima-facie case presented, the appeal was restored to the CIT(A) for adjudication on merits, subject to payment of costs.
Key Issues
Whether the CIT(A) erred in dismissing the appeal in-limine without adjudicating the issues on merits, and whether the additions made under Section 68 of the Act were justified.
Sections Cited
68
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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG, HON’BLE& SHRI B.R. BASKARAN
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the order dated 21/06/2023 passed by ld.CIT(A),NFAC, Delhi and it relates to the assessment year 2012-13.
At the outset, we notice that the ld.CIT(A) was constrained to pass an ex-parte order since the assessee did not respond to various notices issued by CIT(A). We also notice that the ld.CIT(A) has not adjudicated the issues on merits and has dismissed the appeal of assessee in-limine.
The ld.A.R. appearing on for the assessee submitted that the Assessing Officer has made addition u/s. 68 of the Act in respect of cash credits. The ld.A.R submitted that the assessee had taken loans, in most cases in the earlier year. During the year under consideration, the said loans have only been repaid. However, the Assessing Officer has added the repayment of loans as unexplained cash credit u/s. 68 of the Act, which is not legally correct. Accordingly, the ld. AR submitted that the assessee is having strong case and hence it may be provided with one more opportunity to present its case properly before ld.CIT(A). However, with regard to failure on the part of the assessee to respond to the notices issued by ld.CIT(A), the ld.A.R could not give convincing reasons.
We have heard ld. Departmental Representative and perused the record. We noticed earlier that the Ld.CIT(A) did not adjudicate the issues urged by the assessee before him. It is the submission of ld.A.R that there is a strong prima-facie case in favour of the assessee. Hence, we are of the view that this appeal may be restored to his file for adjudicating the issues on merits. However, since the assessee did not properly explain the reasons for not responding to the notices issued by Ld CIT(A), we are of the view that the assessee should be a cost in order to make him understand the seriousness of the income tax proceedings. Accordingly, we impose a cost of Rs.5,000/- (Rupees Five Thousand) upon the assessee, which shall be paid to the credit of Income Tax Department as ‘other fees’ within two months from the date of receipt of this order.
Subject to payment of above cost, which shall be verified by the ld.CIT(A), the order passed by ld.CIT(A) is set aside and all the issues are restored to his file for adjudicating them on merits. We also direct the assessee to fully co-operate with the ld.CIT(A) for expeditious disposal of the appeal.