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Income Tax Appellate Tribunal, DEHRADUN BENCH ‘SMC’: DEHRADUN
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA
Date of Hearing 08/05/2025 Date of Pronouncement 28/07/2025 ORDER
PER AVDHESH KUMAR MISHRA, AM
This appeal for the Assessment Year (‘AY’) 2017-18 filed by the assessee is directed against the order dated 08.04.2024 of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [‘CIT(A)’].
The assessee has raised following grounds of appeal: -
1. That in any case and in any view of the matter, the learned CIT(A), NPAC has erred in law and on facts in confirming the action of the Learned AO by dismissing the Appeal due to non-submission in the Appeal, by not passing a speaking order on the merits of the case.
Sudesh Verma, Dehradun 2. That in any case and in any view of the matter, the Learned CIT(A), NFAC has erred in law and on facts in not communicating the Notices under Section 250 to the email address as per Section 282 of the Income Tax Act, 1961 read with Rule 127 of the income Tax Rules, 1962.
That in any case and any view of the matter, the Learned CIT(A), NPAC has erred in law and on facts in not correctly computing the income of the Appellant under the head "Income from Business or Profession” and "Income from Other Sources".
That the Appellant craves leave add, alter, delete, amend or modify any ground of appeal
during the course of appeal proceedings.”
3. The relevant facts giving rise to this appeal are that the assessee filed his Income Tax Return (‘ITR’) on 31.10.2017 declaring income of Rs.11,02,010/- for the relevant year. The case was picked up for scrutiny on the reasoning that the assessee has deposited substantial cash during the demonetization period. During the course of assessment proceedings, the Assessing Officer (‘AO’) issued various notices seeking explanation of source of cash deposits in the bank accounts. The assessee filed his explanation; however, the AO was not satisfied with the said explanation. Therefore, the AO treated the deposits of Rs.24,75,000/- in bank accounts as unexplained and taxed the same under section 69A of the Income Tax Act, 1961 (‘Act’). Further, the AO disallowed 50% of the expenses debited in the Profit & Loss Account on the reasoning that the assessee has not filed any evidence thereof during the course of assessment proceedings. Consequently, the AO disallowed the expenses of Rs.7,31,340/-. Further, the AO, on verification under section 133(6) of the Act, made an addition of Rs.14,502/- on account Sudesh Verma, Dehradun of bogus liability shown in the name of M/s. Dehradun Medicine Centre. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal on the reasoning of non-prosecution. The relevant findings of the Ld. CIT(A) is reproduced as hereunder: - “5.1. Details of opportunities given to the appellant during the appellate proceedings are as under Sl. Date of Compliance Whether No. Notice Date Compliance received 1. 23.01.2021 28.01.2021 No Compliance No Compliance 2. 11.10.2022 26.10.2022 No Compliance 3. 27.02.2024 08.03.2024 5.2. As has been brought out above, it is evident and clear that the appellant is not interested in filing any details during the appellate proceedings and avail the opportunity under the principle of natural justice. Neither any written submissions were filed nor any adjournment sought. In such situation, the only conclusion which can be drawn is that the assessee is not interested in pursuing the appeal. 5.3. It has been held by the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another (118 ITR 461) (at pages 477 & 478) that appeal does not mean merely filing of memo of appeal but also pursuing it effectively, In cases where the appellant does not want to pursue the appeal, appellate authorities have inherent power to dismiss the appeal the appeal for non-prosecution as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009. 5.4. Furthermore, this appeal has been filed by the appellant claiming that the action of the Assessing Officer is not supported by facts and laws and that it is unjust. In such a situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, if any, to Sudesh Verma, Dehradun support the claim. The "burden of proof is always on the person who makes the claim. In this case, it is the appellant who has made the claim by filing the appeal. Thus, in cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where, however, the assessee claims exemption, the burden is on the assessee to prove it to be exempt. Same is the position in case of all allowances, deductions, claims or loss, etc, since an appeal is nothing but the claim of the appellant that he has been unduly/unjustifiably taxed/penalized, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so. 5.5 It is, thus, evident that the appellant has no evidence to substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to, therefore, go through the extremely brief non- speaking submission appearing in the grounds of appeal and statement of facts filed along with the impugned appeal to decide on the merits while adjudicating the same. But the narrative submission/contention made vide the statement of facts/grounds of appeal is by and large on the very same made at the time of instant assessment which the AO after considering, has duly rejected or found without much merit leading him/her to add the same le., the disallowance/additions made in the said assessment order and enumerated in the impugned grounds against which I am constrained to concur with the AO's findings of fact and decisions thereof, more particularly in the absence of any meaningful and worthwhile submissions/ documentations even during the instant appellate proceedings in this case to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order. 5.6 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions/disallowances made by the AO is sustained in terms of the observations herein-above.”
Sudesh Verma, Dehradun 4. Before us, the Ld. Authorized Representative (‘AR’) submitted that the entire sale consideration shown in the books of account deposited in the bank account had been shown as sale in the books of account of the assessee, which had been accepted by the Assessing Officer (‘AO’). Since the AO had not rejected the books of account of the assessee; hence, the same should be treated as explained. As far as the disallowance of expenses were concerned, the Ld. AR contended that the disallowance was made on surmises and conjectures as the AO had not pointed out any discrepancy in the books of accounts.
On the other hand, the Ld. DR, placing reliance on orders of the authorities below, prayed for dismissal of the appeal.
We have heard both parties and have perused the material available on the record. We find that neither the AO nor the Ld. CIT(A) has given any reasoning for the addition of Rs.24,75,000/- under section 69A of the Act and disallowance of expenses of Rs.7,31,340/-. The AO has not mentioned the details of assessee’s submission and reason for his dissatisfaction on the submission of the assessee. The addition of Rs.24,75,000/- under section 69A of the Act and disallowance of expenses of Rs.7,31,340/- have been made mainly due to non-compliance on the part of the assessee. As the assessee has failed to produce his books of account etc. before the AO and any compliance before the Ld. CIT(A).
Sudesh Verma, Dehradun 7. We take note of the fact that the Ld. CIT(A) has dismissed the appeal ex-parte due to non-prosecution and has not adjudicated the case on merits. Moreover, the Ld. CIT(A) has not decided each ground of appeal after discussing the issues in detail and his reasons for agreeing with the assessment order though he, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen for his consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues which arise from the impugned order before him/her, whether or not these issues have been raised by the assessee before him/her.
8. Section 251(1)(a) of the Act provides that while disposing of an appeal against assessment order, the Ld. CIT(A) shall have the power to confirm, reduce, enhance or annul the assessment. Similarly, the section 251(1) (b) of the Act provides that in disposing of an appeal against an order imposing a penalty, the Ld. CIT(A) may confirm or cancel such orders or vary it so as to either to enhance or to reduce the penalty. On cumulative consideration of the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, it is concluded that the Ld. CIT(A) is not empowered to dismiss the appeal for non-prosecution of appeal and is obliged to dispose of the appeal on merits. In this regard, the finding of the Delhi Bench in the case of MARC “5. We straightway refer to Section 250(6) of the Act which enjoins that the CIT(A) shall state the points for determination before it and the decision shall be rendered on such points along with reasons for the decision. Thus, it is incumbent upon the CIT(A) to deal with the grounds on merits even in ex parte order. In view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution. This view is also taken by the Hon'ble Bombay High Court in case of CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.). A bare glance of the order of the CIT(A) shows that CIT(A) has not addressed itself on various points placed for its determination at all and dismissed the appeal of assessee for default in non-appearance. Needless to say, the CIT(A) plays role of both adjudicating authority as well as appellate authority. Thus, the CIT(A) could not have shunned the appeal for non-compliance without addressing the issue on merits.
6. In the totality of the circumstances, we consider it just and expedient to restore the matter back to the CIT(A) in the larger interest of justice with a view to enable the assessee to avail proper opportunity for disposal of appeal by the CIT(A) on various points. The assessee is cautioned to extend full co-operation to the CIT(A) without any demur, failing which, the CIT(A) shall be at liberty to conclude the appellate proceedings in accordance with law. Hence, the order of the CIT(A) appealed against, is set aside and all the issues raised in the impugned appeal are restored back to the file of the CIT(A) for fresh adjudication in accordance with law after giving reasonable opportunity of hearing to the assessee.”
9. In view the above, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) for deciding the case afresh, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee.
In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open Court on 28th July, 2025