JOLLY STEEL INDUSTRIES PVT. LTD.,PUNE vs. ITO WARD 14(1), PUNE, PUNE

This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre, Delhi (NFAC) dated 21.12.2023 for the assessment year 2013-14.

The appellant is a private domestic company engaged in the business of manufacturing of steel tubes. No return of income for the A.Y. 2013-14 was filed under the provisions of section 139(1) of the Act. The Assessing Officer (AO), on verification of details in the AIMS module under the Multiyear Non-filer Management System, noticed that the appellant made investments in mutual funds of Axis Mutual Fund and Reliance Mutual Fund amounting to Rs.32,50,000/-; received interest of Rs.39,50,447/- from South India Surgical Company Limited; and also received dividend from Axis Mutual Fund and Reliance Mutual Fund, formed an opinion that income escaped assessment of tax.

Accordingly, issued notice u/s.148 of the Act. However, the assessee had not made any compliance to the statutory notices issued. In the circumstances, the assessment was completed by the AO vide order dated 22.05.2023 u/s.144 r.w.s.147 of the Act making addition of the above sums aggregating to Rs.75,07,830/-.

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 had 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.