SYEDALI EBRAHIM,NEYYATTINKARA vs. ACIT, CIRCLE 1(2), TRIVANDRUM

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ITA 57/COCH/2024Status: DisposedITAT Cochin09 December 2024AY 2017-2018Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI PRAKASH CHAND YADAV (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT held that the CIT(A) erred by dismissing the appeal for non-prosecution without deciding the issues on merits. The tribunal directed the CIT(A) to re-adjudicate the appeal on merits after providing a hearing opportunity to the assessee.

What were the facts?

The assessee declared an income of Rs. 22,69,140, but the AO made an addition of Rs. 1,53,50,000, increasing the total income to Rs. 1,76,19,140. The assessee contended that part of the addition was loan proceeds and another part was a reclassification of sundry creditors.

What were the issues?

Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding the merits of the case. The proper procedure for disposing of an appeal ex-parte.

Which sections of the Income-tax Act were involved?

Section 143(3)

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Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM

For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 20.11.2024Pronounced: 09.12.2024

O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 29.11.2023 for Assessment Year (AY) 2017-18.

1.

Syedali Ebrahim 2. Brief facts of the case are that the assessee, an individual, filed the return of income for AY 2017-18 on 31.10.2017 declaring total income of Rs. 22,69,140/-. Against the said return of income assessment was completed by ACIT, Circle – 1(2), Thiruvananthapuram (hereinafter “the AO”) vide order dated 21.11.2019 u/s. 143(3) of the Income Tax Act, 1961 (the Act) at total income of Rs.1,76,19,140/-. While doing so the AO made addition of Rs.1,53,50,000/-.

3.

Being aggrieved, an appeal was filed before the CIT(A), contending that part of the addition represents the loan proceeds from Axis Bank introduced as capital in the business and also contending that the addition of Rs. 1,25,000/- represents the amount received from one M/s. United Steels during the earlier assessment year classified under “sundry creditors”. However, the same was re- classified as addition to capital account during the year under consideration. However, the CIT(A) dismissed the appeal for non prosecution placing reliance on various judicial precedents.

4.

At the outset we find that the CIT(A) has dismissed the appeal in limine for non prosecution without dealing with the issues in the appeal on merits. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merit even in the absence of the appellant. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position we are of the considered view that the matter is required to be remanded to the file

5.

In the result, the appeal of the assessee is allowed for statistical purposes.

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