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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI INTURI RAMA RAO & SHRI PARTHA SARATHI CHAUDHURY
order of CIT(A) in National Faceless Appeal Centre, Delhi dated 26-07-2023 u/s.250 of the Income Tax Act, 1961 (‘the Act’) for the Assessment Year 2017-18.
When the appeal was called on, none appeared on behalf of the appellant despite due service of notice of hearing. After hearing the ld. DR and perusing the material on record, we proceed to dispose of the appeal ex parte qua the appellant.
Briefly, the facts of the case are that the appellant is an individual who filed the return of income on 29-09-2017 declaring total income at Rs.26,97,670/-. The return was processed u/s.143(1) of the Act. Thereafter, the case was selected for scrutiny under CASS. It was observed that the appellant had deposited an amount of Rs.37,50,000/- in the IDBI bank during the demonetization period. Statutory notices were issued calling for the sources of cash deposit of Rs.37,50,000/- made in IDBI bank during the demonetization period. The appellant furnished the copy of return of income, profit & loss account, balance sheet along with copy of bank statement. The AO observed that the appellant had failed to justify the sources of cash deposit made in his bank account.
Eventually, the AO in the assessment order dt. 22-12-2019 passed u/s.143(3) of the Act assessed the total income at Rs.64,47,670/-, thus making addition of Rs.37,50,000/- u/s.69A of the Act.
Being aggrieved by the above assessment order, an appeal was filed before the NFAC, who vide impugned order dismissed the appeal of the appellant for non-prosecution.
Heard the ld. DR and perused the relevant material on record.
We find that the approach of the ld.CIT(A) is totally unreasonable and unjustified. In the present case, the CIT(A) fell in serious error by not adjudicating the issues in appeal on merits. The settled position of law mandates the CIT(A) to dispose of the appeal by adjudicating the issue raised in appeal on merits. The findings of the CIT(A) are not based on the material on record, which means that the CIT(A) had not gone into the merits of the issue in appeal.
Therefore, considering the facts in entirety, we vacate the finding of the CIT(A). In the circumstances, we remand the matter back to the file of the CIT(A) and direct to dispose of the appeals on merits in accordance with law after affording due opportunity of being heard to the appellant.
In the result, the appeal of the assessee stands partly allowed for statistical purposes. Order pronounced on this 28th day of February, 2024.