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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: HON’BLE SHRI S. S. GODARA & SHRI G. D. PADMAHSHALI
बिधम / V/s Income Tax Officer Ward-4(4), Nagpur. . . . . . . . प्रत्यर्थी / Respondent द्वधरध/ Appearances Assessee by : Smt Veena Agrawal [‘Ld. AR’] Revenue by : Mr K C Kanojiya [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 22/03/2024 घोषणा की तारीख / Date of Pronouncement : 22/03/2024 आदेश/ ORDER PER G. D. PADMAHSHALI, AM; This appeal impugns the DIN & order No. ITBA/NFAC/S/250/2023- 24/1057602841(1) dt. 01/11/2023 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] by the National Faceless Appellate Centre [‘NFAC’ hereinafter] for assessment year 2020-21 [‘AY’ hereinafter].
Briefly stated facts of the case are that; 2.1 the assessee is an individual engaged in the business of mining & quarrying and other allied activities. The return of income filed by him declaring total income of ₹NIL with carried forward of current business loss ₹10,76,783/- was subjected ITAT-Nagpur Page 1 of 4
Anirudha Harihar Mandal Vs ITO. for complete scrutiny. In the event of non-compliance with notices and no representation the assessment finally culminated u/s 144 of the Act by making addition of ₹6,72,64,097/- owning to various disallowances made and resultantly as against the returned income the taxable income determined at ₹6,61,87,314/-.
2.2 Aggrieved assessee carried the matter in appeal before first appellate authority u/s 246A(1)(a) of the Act. While dealing with assessee’s appeal the Ld. NFAC provided as much as six opportunities commencing from July 2023 to October, 2023. However, the assessee was indifferent, he did neither comply with any notice nor he could place any cogent material in support of his claims. In the absence of any response forthcoming from the assessee or the written submission in support of grounds raised by it, the Ld. NFAC after reiterating the findings of Ld. AO, has culminated the proceedings ex-parte and confirmed the additions by pressing into service the Hon’ble Apex Court’s decision in ‘CIT Vs B. N. Bhattacharjee’ reported in [1997] 118 ITR 461 (SC) and other equivalent decisions.
2.3 Aggrieved by the aforestated ex-parte adjudication of first appellate forum, the appellant assessee set-up this appeal alleging the violation of principle of natural justice in the former to the merits thereof.
We have heard rival contentions, perused the material placed on record in light of rule 18 of ITAT-Rules 1963. We note that, appellant’s failure to attend scrutiny notices and furnish required details called for, the Ld. AO after putting the assessee to show cause notice [‘SCN’ hereinafter] proceeded to assess total income to the best of his judgement u/s 144 of the Act. While assessing the income the ITAT-Nagpur Page 2 of 4
Anirudha Harihar Mandal Vs ITO.
Ld. AO made various disallowance owning to absence of evidences in support of claims made by the assessee, which inter alia includes (i) disallowance of depreciation claimed against additions to plant & machinery (ii) unexplained unsecured loans/credits (iii) unexplained additions to sundry creditors (iv) disallowance of expenses of payment on which TCS claimed (v) disallowance of other expense etc. Whereas, in an appeal, the Ld. NFAC confirmed these additions ex-parte for non-prosecution of appeal by the appellant assessee.
Without going into the merits of the case, at the outset we note that, in absence of cogent evidential material, submission and non-compliance by the appellant, in the evince of restriction placed by 251(1)(a) of the Act, the Ld. NFAC had to culminate the proceedings ex-parte for non-prosecution.
We are heedful to the restriction placed by clause (a) of sub-section (1) of section 251 of the Act which obligates the Ld. CIT(A) to adjudicate the issue either by confirming or annulling the addition or reducing or enhancing the addition made by the assessing officer without the right to remand the matter back. However, while exercising the jurisdiction u/s 251(1)(a) of the Act, the Ld. CIT(A) was required to state point of determination, its decision thereon and clear reasons therefore in terms of section 250(6) of the Act.
A plain reading of section 250 of the Act reveals that, it is incumbent upon the Ld. CIT(A) to make necessary enquiries before passing an order and while doing so it demands it to decide each of the points arising out of the appeal i.e. grounds on merits even in an ex-parte order. In view of Section 250(4) r.w.s.
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250(6) of the Act, Ld. CIT(A) has no power to dismiss an appeal for non- prosecution, without discussing the merits of the case, and this proposition finds supported in the decision of ‘CIT Vs Premkumar Arjunda’ [(2016) 240 TAXMAN 0133 (Bom)].
Per contra in the instant case, we find that the Ld. NFAC in the event of non- prosecution, confirmed the addition in line with the assessment without adjudicating it in terms of sub-section (6) of section 250 of the Act, thus the rights & liabilities of the rival parties remain undetermined effectively. This adjudication in our considered view is not in consonance with the provision of sub-section (6) of section 250 of the Act. For the reasons, without commenting on merits, we deem it proper to set-aside the impugned order and remit the matter back to the file of Ld. CIT(A) for de-nova adjudication in accordance with law with a direction to accord not more than three effective opportunities and pass a speaking order in terms of section 250(6) of the Act, ergo ordered accordingly.
In result, the appeal of the assessee is allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Friday, 22nd day of March, 2024.
-S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; ददनाांक / Dated : 22nd day of March, 2024. आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The Pr.CIT Concerned. 4. The NFAC Delhi 5. DR, ITAT, Nagpur Bench, Nagpur 6.गार्डफ़ाइल / Guard File. आदेशानुसार / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, पुणे / ITAT, Pune.
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