SUNDARARAMAN JAYARAMAN IYER,NASHIK vs. ITO WARD 2(1), NASHIK

आदेश / ORDER

PER INTURI RAMA RAO, AM:

The appellant is an individual, filed the Return of Income for the A.Y. 2018-19 on 24.07.2018 showing total income of Rs.1,44,300/-. Subsequently, a notice u/s.148 was issued on 31.03.2022 based on the information provided by the Investigation Wing of the Department, New Delhi that appellant is a beneficiary of bogus long term capital gains u/s.10(38) in respect of transaction of sale of shares of M/s.Anuh Pharma Ltd. In response to notice u/s.148, the appellant filed the return of income on 20.04.2022 showing income of Rs.1,70,140/- and claiming exemption of long term capital gain of Rs.21,19,859/- arising on sale of shares of M/s. Anuh Pharma Ltd. However, the appellant had not complied with notices issued u/s.142(1) or 143(2). In the circumstances, the Assessing Officer vide order dated 25.03.2023 passed u/s.147 r.w.s.144B of the Act inferred that the transaction of sale of shares of M/s. Anuh Pharma Ltd. is sham one undertaken with the purpose of availing exemption of bogus capital gains by bringing unaccounted money into the book in the form of sale consideration of shares of M/s. Anuh Pharma Ltd.

Quote, “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.” Unquote. Thus, the Hon’ble Bombay 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. Considering the entirety of the facts and circumstances, I am of the considered opinion that it is a fit case for remand of the matter to the file of the NFAC for de novo consideration in accordance with law after affording due opportunity of hearing to the appellant.

Order pronounced on this 28th day of August, 2024.