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Income Tax Appellate Tribunal, S M C BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN
आदेश /O R D E R
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-12, Chennai, dated 19.02.2015. The only issue arises for consideration is with regard to addition of `9 lakhs to the returned income.
Shri G. Baskar, the Ld.counsel for the assessee, submitted that there was a survey in the premises of the assessee under Section 133A of the Income-tax Act, 1961 (in short 'the Act'). The survey team found cash of `52,030/-. However, as per the books of account, the available cash was `85,409/-. The available stock as
per the inventory was arrived at `14,36,279/-. However, as per the computerized statement, the stock was found to be `4,51,568/-.
There was a bank balance as on 31.03.2004 to the extent of `4,51.568/-. The assessee admitted during the year under consideration an income of `2,91,971/-. When the assessee was asked to reconcile the difference, the assessee admitted to offer a sum of `9 lakhs for the assessment year 2005-06. According to the Ld. counsel, other than the statement recorded from the assessee, no other material is there to support the addition of `9 lakhs made by the Assessing Officer, therefore, the Assessing Officer cannot place any reliance on the statement recorded from the assessee. On appeal by the assessee, the CIT(Appeals) without going into the merit of the case, dismissed the appeal of the assessee on the ground that the assessee did not appear before him. According to the Ld. counsel, the CIT(Appeals) has no power to dismiss the appeal for non-prosecution. The Ld.counsel pointed out that irrespective of appearance of the assessee, the CIT(Appeals) is expected to call for details from the Assessing Officer and dispose of the appeal. Since the appeal has not been disposed of, according to the Ld. counsel, the matter may be remitted back to the file of the CIT(Appeals) with a direction to dispose of the appeal on merit.
I have heard Shri A.V. Sreekanth, the Ld. Departmental Representative also. The Ld. D.R. submitted that inspite of sufficient opportunity given by the CIT(Appeals), the assessee had not appeared before the CIT(Appeals). Therefore, by placing reliance on the decision of Delhi Bench of this Tribunal in CIT v.
Multiplan (India) Ltd. (38 ITD 320), the CIT(Appeals) has dismissed the appeal of the assessee.
I have considered the rival submissions on either side and perused the relevant material on record. In fact, the CIT(Appeals) has not disposed of the appeal on merit and the appeal was dismissed only on the ground that the assessee failed to appear before him. Under the scheme of Income-tax Act, the CIT(Appeals) is empowered to enhance the assessment in case any particular income was omitted to be considered by the Assessing Officer in the assessment proceedings. The CIT(Appeals) has co-terminus power as that of the Assessing Officer. Therefore, under the scheme of Income-tax Act, the onus lies upon the CIT(Appeals) to examine the issue and find out if any particular income was omitted to be considered. The CIT(Appeals) has to examine the income which was omitted to be considered by the Assessing Officer and frame the assessment. By dismissing the appeal for non- prosecution, the CIT(Appeals) has disowned his responsibility cast upon him under the scheme of the Income-tax Act. Once an appeal is filed before him, this Tribunal is of the considered opinion that the CIT(Appeals) has to consider the same on merit. If the CIT(Appeals) dismissed the appeal for non-prosecution, then he may not have any occasion to enhance the assessment by assessing the income which was omitted to be considered by the Assessing Officer. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has no authority/power to dismiss the appeal for non-prosecution. The CIT(Appeals), being the senior most officer of the Department, has to call for record from the Assessing Officer and examine the same thoroughly on the basis of the grounds of appeal raised before him and thereafter dispose on merit in one way or other. If necessary, the CIT(Appeals) is expected to enhance the assessment by including the income, which was omitted by the Assessing Officer. Therefore, the CIT(Appeals) is not justified in dismissing the appeal for non- prosecution.
In view of the foregoing discussion, this Tribunal is unable to uphold the view taken by the CIT(Appeals). Therefore, the entire issue is remitted back to the file of the CIT(Appeals). The CIT(Appeals) shall reconsider the issue afresh in the light of the grounds of appeal filed by the assessee and thereafter decide the issue in accordance with law after giving reasonable opportunity to the assessee. It is made clear that in case the assessee fails to appear before the CIT(Appeals) after issuing notice, it is open to the CIT(Appeals) to dispose on merit on the basis of the material available on record.
With the above observation, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 13th November, 2015 at Chennai.