PAUL AND COMPANY,ERNAKULAM vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, ALUVA

Brief facts of the case are that the assessee is a partnership firm incorporated under the provisions of the Partnership Act. The assessee is carrying on business as wholesale dealer of rice, sugar, provisions and other consumable items. The return of income of AY 2017-19 was filed on 30.01.2018 declaring total income of Rs.73,34,470/-. Against the said return of income, the assessment SA No. 216/Coch/2023 Paul and Company was completed by the Assessing Officer (AO) vide order dated 29.12.2019 vide order passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs.1,23,64,320/-. While doing so the AO made addition of Rs.50,29,847/- being the cash deposited during the demonetisation period, disbelieving the availability of cash as on the date of deposit.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution placing on the decision of the Hon'ble Bombay High Court in the case of M/s. Chemipol vs. Union of India in Excise Appeal No. 62 of 2009.

Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal. When the matter was called on the learned A.R. filed a letter seeking adjournment on the ground the he intends to file a paper book. The request for adjournment is declined, as the matter can be disposed of without entering into the merits, as the CIT(A) has disposed of the appeal without entering into the merits of the case.

We find that the learned CIT(A) dismissed the appeal in limine for non prosecution. 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 merits. 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 required to be remanded to the file of the CIT(A) with the direction to

Since the quantum of appeal of the assessee is disposed of by the order of remand to the CIT(A), the stay application becomes infructuous, hence dismissed.

In the result, the appeal filed by the assessee is allowed for statistical purposes and the stay application is dismissed as infructuous.