LOKMANGAL COOPERATIVE BANK LIMITED,SOLAPUR vs. COMMISSIONER OF INCOME TAX, NFAC DELHI

(A.Y. 2009-10) Lokmangal Cooperative Bank vs ITO, Ward-2(1), Ltd., 128, Murarji Peth, Solapur. Opp. Sevasdan High School, Solapur-413001 (MH) PAN: AAAAL 0119 J Appellant Respondent Assessee by : Shri Pramod S. Shingte, CA Revenue by : Shri Ramnath P. Murkunde,DR Date of hearing : 01/04/2024 Date of pronouncement : 03/04/2024 ORDER

Per PARTHA SARATHI CHAUDHURY, JM:

Lokmangal Co-op. Bank Ltd. Court in the case of CIT v. Prem Kumar Arjundas Luthra (HUF) [2017] 297 CTR 614 (Bom.) has held as follows:- "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 AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 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. Sec. 251(1)(a) and (h) 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-s. (2) of s. 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 s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO 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 s. 251(1)(a) and (b) and Explanation to Sec. 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.”

Lokmangal Co-op. Bank Ltd. final opportunity should be given to the assessee to represent its case on merits. In view thereof, we set aside the order of NFAC and remit the matter back to its file for de novo adjudication. The assessee is also directed to file written submissions with evidences/documents before the NFAC to present its case on merits before the NFAC and it shall adjudicate the same by passing a speaking order while complying with the principles of natural justice. In view of the aforesaid directions, we set aside the order of the NFAC and remand the matter back to its file.

Order pronounced in open Court on 03rd April, 2024.