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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
PER DR.MANISH BORAD, ACCOUNTANT MEMBER:
This appeal filed by the assessee pertaining to the Assessment Year (in short "AY") 2013-14 is directed against the order passed u/s.250 of the Income Tax Act, 1961 [in short “the Act"] by the National Faceless Appeal Centre, Delhi [in short ‘ld.CIT(A)’], dated 09.05.2023 arising out of the Assessment order passed u/s.143(3) of the Act, dated 04.03.2016.
Assessee has raised following grounds of appeal :
“1. The assessee submits that the appellate order passed by CIT(A) in limine without passing any speaking order on merits is not justified in view of the law laid down by Hon'ble ITAT, Pune in Pudhari
Publications Pvt. Ltd. v. ITO in to 12/PUNE/2024 dated 20.02.2024 and hence, the said appeal may be restored to the file of the CIT(A) for passing a speaking order on merits afresh.
The learned CIT(A), NFAC, Delhi erred in confirming the additions made by the A.O. in the ex-parte asst. order u/s.144 without taking cognizance of the detailed written submissions running into 210 pages filed on 25.04.2017 before CIT(A), Nashik 1 and thus, the appellate order passed by the CIT(A) was not justified.
The learned CIT(A), NFAC, Delhi erred in confirming the additions made by the A.O. in the ex-parte asst. order u/s.144 without appreciating that his predecessor had admitted the additional evidences furnished by the appellant and had called for a remand report from the A.O. and thus, the appellate order u/s.250 passed without taking into consideration any of the said additional evidences and remand report was apparently unjustified on facts and in law.
The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal
.”
3. When the matter was called for, none appeared on behalf of the assessee despite due service of notice of hearing. We therefore proceed to dispose of this appeal exparte qua the assessee after hearing the ld. Departmental Representative.
4. At the outset, we find the appeal is time barred by limitation by 407 days before the Tribunal. The assessee filed an affidavit explaining the reasons which led to delay in filing the appeal. We have gone through the averments made in the affidavit. We find the Hon’ble Supreme Court in the case of Collector of Land Acquisition vs. Mst. Katiji, 167 ITR 471 (SC) held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. The Hon’ble Jurisdictional High Court in the case of Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.) held that in the matter of condonation of delay an overall view in the larger interest of justice has to be taken. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bonafides.
5. Applying the principles enunciated in the decisions referred hereinabove, in the facts of the present case, we deem it a fit case to condone the delay of 407 days in filing the appeal. We therefore condone the delay of 407 days and proceed for adjudication of appeal on merits.
Brief facts of the case emanating from the record are that the assessee is an individual engaged in the business of Builder and Land Developers. The assessee filed the return of income for the A.Y. 2013-14 on 30.09.2013 disclosing total income of Rs.8,70,000/-. Return was processed u/s.143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS. Statutory notices u/s.143(2) and 142(1) were issued to the assessee calling for information. There was no compliance from the side of assessee to such notices. However, in response to notice u/s.142(1) dated 20.10.2014 and 19.11.2015, the assessee submitted his written submissions. Based on the written submissions, the Assessing Officer observed that in the Audit Report it was stated that the assessee is in the business of Civil Contractor whereas in the written submission it is stated that he is in the business of Builders and Developers. It was found noticed that the assessee in receipt of sale receipts at Rs.1,28,98,100/- and Commission of Rs.9,000/- aggregating to Rs.1,29,07,100/- whereas the Gross Profit is Rs.16,49,231/- and Net Profit is shown at Rs.8,89,241/-.
Based on the AIR information available with the department that the assessee made cash deposits in various banks to the tune of Rs.62,91,000/-, the Assessing Officer obtained bank statements from the banks by issuance of notices u/s.133(6). The AO issued letters dated 01.01.2016 and 17.02.2016 calling upon the assessee to furnish the sources for these cash deposits to which there was no compliance from assessee. In the absence of any explanation putforth by the assessee, the AO invoking the provisions of section 69 of the Act treated the cash deposits of Rs.62,91,000/- as unexplained investment in the hands of assessee.
The Assessing Officer further observed that the assessee made payment of Rs.77,90,935/- to the contractors. The AO asked the assessee to give the list and payments to the contractors along with details of TDS etc. It was also found by the AO that in the Audit Report (Column No.27a) it was stated that previous year the assessee is not in Audit so the provisions regarding Chapter XVIIB is not applicable. Considering this, the assessee has not made TDS. The assessee has not provided the details of these payments whether paid in cash or by cheque. Hence, the AO made addition of Rs.7,79,000/- being 10% on these payments u/so.40A(3) of the Act.
The AO also made addition of Rs.36,48,685/- on account of variation in the opening and closing stock shown by the assessee as unexplained investment u/s.69 of the Act. Thus, the AO assessed the income of assessee at Rs.1,15,88,690/- as against the returned income of Rs.8,70,000/-.
Being aggrieved by the above assessment order, assessee preferred an appeal before the ld. CIT(A) who vide impugned order dismissed the appeal in limine for non- prosecution, without discussing anything on merits.
We have heard the ld. Departmental Representative and perused the record placed before us. We find the impugned order passed by the ld. CIT(A)/NFAC is exparte. On perusal of Para No.7.2 of the impugned order, the ld. CIT(A)/NFAC dismissed the assessee’s appeal without dealing with the merits even when the assessment records were available with him. Ld. CIT(A)/NFAC is required to pass a speaking order dealing with the merits of the case as contemplated u/s.250(6) of the Act which provides that for adjudicating the appeal, the ld. CIT(A)/NFAC should dispose of the same in writing and shall state the points for determination, the decision thereon and the reason for that decision. The settled position of law mandates the CIT(A) NFAC to dispose of the appeal by adjudicating the issue raised in appeal on merits. In this regard, reference is being made to a decision of the Hon’ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) wherein it was held that NFAC is obliged to dispose of the appeal on merits. The observation of the Hon’ble High Court is reproduced below :
“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 of 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. Infact the CIT(A) is obliged to dispose of the appeal on merits. Infact with effect from 1st 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 coterminous 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.”
Thus, the Jurisdictional High Court has categorically held that CIT(A) has to decide the appeal on merit and CIT(A) does not have any power to dismiss appeal for non-prosecution.
Since the ld. CIT(A) has not adhered to the provisions of section 250(6) of the Act and has not passed a speaking order, we are of the considered view that, in the interest of natural justice, the issue raised in the instant appeal deserves to be restored to the file of ld. CIT(A)/NFAC for denovo adjudication. For doing the needful reasonable opportunity has to be granted to the assessee to furnish submissions and other evidences if needed. On due consideration of the same, ld. CIT(A)/NFAC shall pass a speaking order in accordance with law. The assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld. CIT(A)/NFAC shall be free to proceed in accordance with law. Finding of the CIT(A)/NFAC is set aside and Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 12th day of November, 2024.
Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 12th November, 2024. Satish