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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI INTURI RAMA RAO
आदेश / ORDER
PER INTURI RAMA RAO, AM:
This is an appeal filed by the appellant directed against the order of National Faceless Appeal Centre, Delhi dated 27.09.2023 for the assessment year 2015-16.
Briefly, the facts of the case are that the appellant is an individual, filed the return of income for the A.Y. 2015-16 on 26.03.2017 disclosing income of Rs.2,66,750/-. The case was selected for limited scrutiny to examine whether the credit card payments were made from the disclosed sources or not. Statutory notices u/s.143(2)/142(1) were issued to the appellant. There was no compliance to the notices by the appellant. Based on the information available with the Department that the appellant made cash deposit of Rs.28,29,600/- with Sarjeraodada Naik Shirala Coop Bank Ltd. Kolhapur and Axis Bank, the Assessing Officer formed opinion that income escaped assessment to tax. While doing so, the AO vide order dated 18.12.2017 passed u/s.144 of the Act brought to tax the cash deposit of Rs.28,29,600/- as unexplained cash credit u/s.68 by holding that the business receipts and rent on vehicle receipts shown in the ITR as total income are not commensurate with the total credit in the accounts.
Being aggrieved by the above assessment order, an appeal was filed before the CIT(A)/NFAC who vide impugned order dismissed the appeal for non-prosecution, without going into merits of the addition.
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 after hearing the ld. Departmental Representative.
The ld. Sr. DR submits that despite providing ample opportunities there was no compliance from the side of the appellant to the notices/show cause notice issued. On failure of the appellant to provide any details substantiating the sources for the cash deposit, the authorities were justified in making addition. Therefore, no interference by this Tribunal is called for.
I heard the ld. Sr. DR and perused the material on record. Admittedly, the assessment order was passed u/s.144 of the Act. I find the CIT(A)/NFAC had also dismissed the appeal of the appellant in limine without going into the merits of the issues. Further, it is a trite law that the CIT(A)/NFAC should have dealt with the merits of the issues in appeal, even in the case of ex-parte order. From the perusal of the impugned order, it would reveal that the CIT(A)/NFAC had not gone into the merits of the issues in appeal, merely dismissed the appeal for non-prosecution, which is contrary to the settled position of law. The Hon’ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) has held as under :
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 CIT(A)/NFAC for de novo consideration in accordance with law after affording due opportunity of hearing to the appellant.
In the result, the appeal filed by the appellant stands partly allowed for statistical purposes.
Order pronounced on this 26th day of August, 2024.