LATABAI VIJAY JADHAV,SHAHADA vs. INCOME TAX OFFICER NFAC DELHI, DELHI

This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre (NFAC), Delhi dated 22.05.2024 for the assessment year 2018-19.

Brief facts of the case are as under : The appellant is an individual deriving income from Dairy farming and Agricultural income etc. The Return of Income for the A.Y. 2018-19 was filed on 31.08.2018 declaring total income of Rs.4,19,870/- and Agricultural income of Rs.47,31,935/-. Subsequently, the case was selected for Limited Scrutiny for verification of Large Agricultural income in comparison to total income. Statutory notices u/s.143(2)/142(1) were issued to the appellant asking the appellant to substantiate the claim of Agricultural income declared in the Income-tax Return. In response, the appellant filed submissions before the AO. Not convinced with the submissions filed by the appellant, the AO treated 50% of the Agricultural income as unexplained on the ground the appellant had not furnished adequate evidence to substantiate the quantum of agricultural income. It was also held that the appellant had failed to furnished correct details in regard to the expenses incurred. Thus, the AO vide order dated 26.08.2021 passed u/s.143(3) r.w.s.144B of the Act brought to tax the 50% of Agricultural income claimed as unexplained credit u/s.68 of the Act.

Being aggrieved by the above assessment, an appeal was filed before the CIT(A)/NFAC who vide impugned order dismissed the appeal in limine for non prosecution, without discussing anything on merits of the disallowance.

Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal.

When the appeal was called on, none appeared on behalf of the appellant despite due service of notice of hearing. I therefore proceed to dispose of the appeal ex parte after hearing the ld. Departmental Representative.

I heard the ld. Sr. DR and perused the material on record. It is an admitted position that the NFAC has dismissed the appeal of the appellant ex parte for non-prosecution. Further, it is a trite law that the NFAC should have dealt with the merits of the issue in appeal, even in the case of ex parte order. From the perusal of para 5.5 of the impugned order, it would reveal that the NFAC had not gone into the merits of the issue in appeal, merely dismissed the appeal for non- prosecution, which is contrary to the settled position of law. 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 CIT(A) is obliged to dispose of the appeal on merits. Therefore, I deem it proper to remit the matter to the file of CIT(A)/NFAC for de novo disposal of the issue in appeal on merits afresh after allowing reasonable opportunity to the appellant, in accordance with law. I order accordingly.

In the result, the appeal filed by the assessee stands partly allowed.