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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Waseem Ahmed & Shri Siddhartha Nautiyal
आदेश/ORDER PER BENCH:- This assessee’s appeal for A.Y. 2015-16, arises from order of the CIT(A)-2, Rajkot dated 18-10-2018, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
The assessee has taken the following grounds of appeal:-
I.T.A No. 455/Rjt/2018 A.Y. 2015-16 Page No 2 Tricot Impex Pvt. Ltd. vs. Dy. CIT
“1. The Assessment Order under section 143(3) of the Act, is bad in law as well as facts. 2. The Order of the learned Commissioner of Income Tax (Appeals) is bad in law as well as facts. 3. The learned Commissioner of Income Tax (Appeals) erred on facts as well as in law by in confirming the addition in respect of unproved sundry credits u/s 68 amounting to Rs.10,80,342/-. 4. The learned Commissioner of Income Tax (Appeals ) erred on facts as well as in law in confirming the charging of interest u/s. 234A 234B, and 234C of the Act, when addition itself not sustainable. Your Honour's appellant craves leave to add, amend, alter or withdraw any one or more grounds of appeal on/or before hearing of appeal.”
The brief facts of the case are that during the year under consideration, the assessee has shown sundry creditors at � 1,08,03,429/-. The AO, during the course of assessment proceedings for the impugned assessment year, issued various notices asking the assessee to file required details/documents to prove the genuineness of the sundry creditors. But no details/supporting documents were filed by the assessee. The assessee did not provide names, address, PAN of creditors, confirmation of account, neither detail of nature of transactions were provided. Therefore, the AO observed that genuineness of the transaction and outstanding amount of creditors cannot be verified in absence of details. Accordingly, in absence of details, the AO disallowed 10% of the sundry creditors of � 1,08,03,429/- i.e. AO made disallowance of � 10,80,342/- and added the same to the total of the assessee under section 68 of the Act.
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In appeal, despite several notices, none appeared on behalf of the assessee. Accordingly, Ld. CIT(Appeals) dismissed the assessee’s appeal with the following observations:
“5. During the appeal proceedings, various notices were issued to the assessee as under.
Sr. Date of notice Date fixed Remarks No. for hearing
05/04/2018 20/04/2018 An application for adjournment was filed
20/04/2018 07/05/2018 An application for adjournment was filed
07/05/2018 28/05/2018 No one attended adjournment not filed
04/06/2018 19/06/2018 No one attended adjournment not filed
25/06/2018 10/07/2018 An application for adjournment was filed on 17/07/2018
17/07/2018 02/08/2018 An application for adjournment was filed
02/08/2018 13/08/2018 No one attended adjournment not filed
06/09/2018 28/09/2018 No one attended adjournment not filed
09/10/2018 16/10/2018 No one attended adjournment not filed
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In view of above, the appeal is liable to be dismissed for non- prosecution. I find support from the following decisions:- (i) In the case of C1T Vs. B.N. Bhattachargee & Another 118ITR 461 (relevant pages 477 & 478) wherein their Lordships have held that "the appeal does not mean merely filing of appeal but effectively pursuing it."
(ii) In the case of Estate of Late Tukoji Rao Holker Vs. CWT 223 1R 480 (MP) while dismissing the reference made at the instance of assessee in default made following observations in their order.
"if the partly at whose instance the reference is made falls to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, this court is not bound to answer the reference.
(iii) In the case of CIT Vs. Multplan India Pvt. Ltd. 38ITD 320 (Del). The appeal filed by the revenue before the Tribunal which was fixed hearing but on the date of hearing nobody represented the revenue applicant, nor any communication for adjournment received. There was no communication or information as to why revenue choose to remain absent on that date. The Tribunal on the basis of inherent power treated the appeal filed by the revenue as un- admitted in view of Rule 19 of the Appellate Tribunal Rules, 1963.
Coming to the merits of addition I find that the addition of Rs. 10,80,3427- u/s 68 in respect of unproved sundry credits is justified as assesses despite due opportunity did not furnish evidence as to the genuineness of such credits.
Thus on the merits also I find that the contested additions are justified. The additions are therefore confirmed on merits as well.
For statistical purpose, the appeal of the assessee is to be treated as dismissed.”
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The assessee is in appeal before us against the aforesaid order of the Ld. CIT(Appeals). Before us, the assessee has submitted that the Ld. CIT(Appeals) has erred in facts and in law in dismissing the appeal ex parte, without discussing the merits of the case. Accordingly, the assessee requested that in the interest of justice, another opportunity may be provided so that the assessee is able to produce sufficient documentary evidence in support of its case. The counsel for the assessee submitted that it is a well- settled law that Ld. CIT(Appeals) cannot dismiss assessee’s appeal for non- prosecution, without discussing the merits of the case. In response, DR submitted that despite numerous opportunities to the assessee, he did not cause appearance deliberately and hence in absence of any documents whatsoever being furnished by the assessee, the AO and CIT had no option but to dismiss the appeal ex parte, for non-prosecution. The DR submitted that as many as 6 opportunities of hearing were given by the AO during the course of assessment and as many as 9 opportunities were afforded to the assessee by Ld. CIT(Appeals) during the course of appellate proceedings, but the assessee did not appear and neither furnished any documents. In response, the counsel for the assessee submitted that he did not receive any notice of hearing, and therefore he was unable to cause appearance before the Revenue authorities.
We have heard the rival contentions and perused the material on record. In the case of Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay), the Mumbai High Court has held that Commissioner(Appeals) is required to apply his mind to all issues which arise from impugned order before him whether or not same had been raised
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by appellant before him. Further, law does not empower Commissioner (Appeals) to dismiss appeal for non-prosecution (non-appearance). The Delhi the case of Ms. Swati Pawa [2019] 103 taxmann.com 300 (Delhi - Trib.)has held that in terms of section 250, Commissioner (Appeals) is not empowered to dismiss appeal for non-prosecution and is obliged to dispose of appeal on merits by passing a speaking order. The Delhi Tribunal in the case of Pawan Kumar Singhal [2019] 108 taxmann.com 548 (Delhi - Trib.) has held that Commissioner (Appeals) cannot dismiss assessee's appeal in limine for non-prosecution without deciding same on merits through an order in writing, stating points of determination in appeal, decision thereon and reason for decision.
6.1 In the present case, we note that the Ld. CIT(Appeals) passed a non- speaking order and dismissed the appeal of the assessee summarily without discussing the merits of the case and the issues for consideration and the grounds of appeal raised by the assessee. However, we also note that adequate opportunity was given to the assessee to present his case in merits (as many as 9 opportunities were provided by Ld. CIT(Appeals) and 6 opportunities of hearing were provided by the AO). Therefore, in the interests of justice, we are restoring the file to the Ld. Assessing Officer to decide the appeal afresh, after giving due opportunity of hearing to the assessee to present his case on merits. However, in the instant case we have also noted that despite several opportunities, the assessee neither caused appearance before the AO, nor did he appear before Ld. CIT(Appeals) and for which assessee has not been able to produce any convincing reason for non-appearance and non-cooperation at all stages. Therefore, in the interests
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of justice we are setting this matter back to the file of the AO subject to the condition that the assessee shall deposit cost of � 2000/-with the Department within 60 days from receipt of this order. Accordingly, the case is being set aside to the file of the Ld. Assessing Officer with the above directions.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21-09-2022
Sd/- Sd/- (WASEEM AHMED) (SIDHHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 21/09/2022 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot