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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI AVDHESH KUMAR MISHRA
A.Y. 2014-15 Madan Mohan Gahtori Asstt. Commissioner of S/o JeewanandGahtori, Income Tax, Circle-2, Ward No.04, Railway Area, Vs. Income Tax Office, Tanakpur, Chanpawat, station Road, Kashipur Udham Udham Singh Nagar SinghNagar,Uttarakhand PAN: AHXPG3747N (Appellant) (Respondent) Appellantby None Respondent by Sh. Amarpal Singh, Sr. DR Date of Hearing 12/02/2025 Date of Pronouncement 12/02/2025 ORDER
PER AVDHESH KUMAR MISHRA, AM
This appeal for the Assessment Year (hereinafter, the ‘AY’) 2014-15 filed by the assessee is directed against the order dated 11.01.2023 passed by the Commissioner of Income Tax (Appeals)-3, Lucknow [hereinafter, the ‘CIT(A)’].
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The sole issue raised in this appeal challenges the impugned order of the Ld. CIT(A).
The relevant facts giving rise to this appeal are that the assessee was intercepted at the Terminal-3, I.G.I. Airport, New Delhi as he was having cash of Rs.13,00,000/- in his possession. Since he failed to explain; therefore, the same was seized by the Income Tax Department. Consequently, the assessment proceedings for AYs 2008-09 to 2013-14 were initiated under section 153A of the Income Tax Act, 1961 (hereinafter, the ‘Act’). During the assessment proceedings, the Assessee failed to ensure any compliance of statutory notices; therefore, the Assessing officer (hereinafter, the ‘AO’) had not any option except to complete the assessment ex parte under section 144A of the Act. As per the assessment order, it is evident that the assessee admitted the said cash of Rs.13,00,000/- as his accounted income derived from his consultancy profession and offered the same in two different years i.e. AY 2013-14 and 2014-15. Accordingly, the proportion cash of Rs.2,60,000/- was assessed in the relevant year under section 69A of the Act. Further, based on the information available in 26AS of the assessee, the AO noticed the assessee has received the sum of Rs.3,20,343/- from M/s. Skyline Engineering Contracts (India) Pvt. Ltd. and interest of Rs.17,006/- from the Income Tax Department under section 244A of the Act on the refund arisen to the assessee. Therefore, the AO
Page 2 taxed these sums. Besides, the AO also held that the assessee had incurredday-to-day household expenditure of Rs.6,00,000/-. Accordingly, he taxed Rs.6,00,000/- as unexplained expenditure under section 69C of the Act. Consequentially, the scrutiny assessment was completed at income of Rs.11,97,350/-.
3.1 Aggrieved, the assessee filed appeal before the CIT(A). However, he did not succeed as there was consistent non-compliance as detailed in Para 4.1 of the impugned order.Further, the Ld. CIT(A) also enhanced the income by Rs.24,00,000/- as per para 6.2 to 6.4 of the impugned order as under:-
“6.2 During the recording of statement on oath on 30.06.2013 u/s 131(1A) of the Act, by the investigation AIU New Delhi, while giving the answer of question no. 3 it has been stated by the appellant that, “I am drawing my salary as executive director of Rs. 2,00,000/- per month from M/s Skyline Engineering Contractors India Pvt. Ltd. and also having some interest income.” Thus, it is clear that minimum annual salary of the appellant is Rs. 24,00,000/- per annum, however it has been observed that during the year the appellant has not filed any Return of Income. Therefore, enhancement notice u/s 251(1)(a) of the Income Tax Act 1961 was issued on 12.04.2018. In response it has been submitted by the appellant that, “I had been appointed by Skyline Engineering Contracts India Pvt. Ltd., Saket (Delhi) on 01.04.2013 as an Madan Mohan Pandey, Executive Director (Projects). Before that being a Civil Engineer I was working as consultant for their project at Shimoga, Karnataka, with the name of Madan Mohan Gahtori as a verbal discussion held with the same organization. Though the work was completed in the February 2013 but my
Page 3 more than six months consultation fee was due with them which I was supposed to get in the month June/July 2013. In the mean time they have appointed me as Madan Mohan Pandey Executive Director for which I am enclosing the documents and affidavit for Madan Mohan Gahtori v/s Madan Mohan Pandey for your kind consideration.” 6.3 The above submission along with company appointment letter as Executive Director, copy of ITR for A.Y. 2014-15 filed having Pan No. CGRPP9231R and affidavit that Madan Mohan Gahtori and Madan Mohan Pandey are the same & one person have been examined. On perusal of PAN detail of AHXPG3747N it has been noted that here name of the Pan holder is found as Madan Mohan Gahtori, D.O.B. 25.01.1960 and Pan was allotted on 17.09.2004 having father’s name Sh. Jeewa Nand Gahtori. On perusal of PAN detail of CGRPP9231R it has been noted that here name of the Pan holder is found as Madan Mohan Pandey, D.O.B. 26.10.1960 and Pan was allotted on 24.04.2013 having father’s name Sh. Jeewa Nand. In these facts it is clear that Sh. Madan Mohan Gahtori and Sh. Madan Mohan Pandey are not the same and one person. 6.4 Further, vide this office notice dated 20.12.2022 appellant was granted another opportunity of being heard for the enhancement of income fixing the date of hearing on 04.01.2023, however no reply/submission has been made by the appellant. Therefore, I am satisfied that appellant failed to disclose the salary/remuneration received from M/s Skyline Engineering Contractors India Pvt. Ltd as claimed in the statement recorded at IGI Airport, New Delhi, therefore, it is a fit case for enhancement of income. Thus, income of the appellant for the year under consideration has been enhanced by Rs. 24,00,000/-. Therefore, the Assessing Officer is directed to re- compute the income accordingly.”
We have heard Sr. Departmental Representative (hereinafter, the ‘Sr. DR’) and have perused the material available on the record. We take note of Page 4 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. Further, the AO has also completed the assessment ex parte under section 144 of the Act. 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. As per provisions of section 250(6) of the Act, the CIT(A) is obliged to dispose of the appeal in writing after stating the points for determination and to then pass an order on each of the points which has arisen for his consideration. The CIT(A) is further obliged to state the reason for his/her decision on each such point of determination. The CIT(A) is duty-bound to dispose of the appeal through a speaking order on merits on all the points for determination including each ground of appeal. 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 arisen from the order before him/her, whether or not these issues have been raised by the assessee before him/her.
5. Section 251(1)(a) of the Act provides that while disposing of an appeal against assessment order, the 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 CIT(A) may confirm or cancel such orders or vary it so as to Page 5 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 CIT 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 Laboratories Ltd. in 2732, 2733, 2730, 2734 & 2735/DEL/ 2022 is worth mentioning here, wherein it has been held as under:
“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.
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-
Page 6 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.”
As far as the issue of enhancement is concerned, it is evident from the impugned order that the Ld. CIT(A) has enhanced the income after providing opportunity of being heard to the appellant assessee. However, the appellant assessee did not ensure the compliance. In another words, it is hereby inferred that the enhancement has also been done without hearing the appellant assessee. In the interest of justice, we are of the opinion that it would have been better on the part of the Ld. CIT(A) if he has provided some more opportunity of being heard to the appellant assessee.
In view the above facts, discussions, observations and in the interest of justice, we find it fit that this case requires to be decided afresh by the AO. Therefore, 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 AO for de-novo consideration and passing the assessment order afresh after providing adequate opportunity of being heard to the appellant assessee. The appellant assessee, no doubt, shall ensure compliance and cooperate in fresh assessment proceedings. Accordingly, we ordered so.
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In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in open Court on 12th February, 2025
Sd/- Sd/- (VIKAS AWASTHY) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12/02/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
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