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Income Tax Appellate Tribunal, DELHI BENCH “SMC-2” NEW DELHI
Before: SHRI S.V. MEHROTRA :
Date of hearing : 18/07/2016. Date of order : 25/07/2016. O R D E R
This is assessee’s appeal against the order dated 12.01.2015, passed by the ld. CIT(A)-41, New Delhi, relating to A.Y. 2010-11. 2. Grounds of appeal raised by the assessee in its appeal are as under:
“1) That the notice of hearing dated 15th December 2014 fixing the date for 12th January 2015 has not been received by the appellant and consequently the order of the CIT (Appeals) dismissing the appeal of the appellant ex-parte is arbitrary, unjust and bad in law. 2) That the CIT (Appeals) ought not to have-passed the order ex- parte on account of alleged non-appearance on 12th January 2015 for want of non-prosecution. On the contrary, he has to decide the appeal on merits and consequently the order of the CIT (Appeals) is arbitrary, unjust and untenable in law. 3) That the addition of Rs.19,98,000/- u/s 68 of the Income- tax Act, 1961 (the Act) is arbitrary, unjust and bad in law. 4) That the total income assessed at Rs.19,98,000/- and the income tax demand created thereon at Rs.8, 14,944/- which includes the interest charged u/s 2348 of the Act is arbitrary, unjust and at any rate very excessive. 5) That the assessee denies its liability to charge interest u/ s 234B of the Act at Rs.1,97,562/-. 6) That the above grounds of appeal are independent and without prejudice to one another.”
3. Ld. counsel for the assessee submitted that the ld. CIT(A) was not justified in dismissing the assessee’s appeal, ex pare, qua the assessee, in limine. In support of his contention, ld. counsel relied on the judgment of Hon’ble Bombay High Court in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2016) 240 Taxman 133/69 taxmann.com 407 (Bom.), wherein the Hon’ble Bombay High Court, while considering the powers of CIT(A), has observed in para 8 as under:
“8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit 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 :6f1 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 CIT(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 clear that while considering the appeal, the CIT(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 CIT(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 Ist June, 2001 the power of the CIT(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 i.e. 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 CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251( 1)( a) and (b) and Explanation to Section 251 (2) of the Act which requires the CIT(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”.
Ld. DR relied on the order of CIT(A).
Having heard rival contentions of the parties, I am of the considered opinion that the impugned ex parte order passed by the learned CIT(Appeals) cannot be accepted in the eye of law. The learned CIT(A) being first appellate authority, was duty bound to dispose off the issues raised before him on merits. Therefore, order of the learned CIT(A) is set aside and the matter is restored back to him with the direction to pass a reasoned order, on the grounds of appeal raised before him, in accordance with law, of course, after affording reasonable opportunity of being heard to the assessee. It is ordered accordingly.
In the result, assessee’s appeal stands allowed for statistical purposes only. Order pronouncement in open court on 25/07/2016.