YASHASVI PARAKH, DURG,DURG vs. INCOME TAX OFFICER, WARD-2(1), BHILAI, DURG
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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
आदेश / ORDER PER RAVISH SOOD, JM
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 27.02.2023, which in turn arises from the order passed by the A.O. under Sec. 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.12.2016 for the assessment year 2014-15. The assessee has assailed the impugned order on the following grounds of appeal before me:
“1) That order of CIT(A) is bad-in-law, illegal and void-ab-initio.
2) That order of CIT(A) is bad-in-law, illegal and void-ab-initio as ITO Ward-2(1), Bhilai, who had issued notice u/s 143(2) and passed assessment order u/s 143(3), had not assumed valid jurisdiction to pass assessment order. 3) Without prejudice to ground nos. 1 & 2, CIT(A) has erred in passing order on 27.02.2023 because while deciding the appeal he had not considered adjournment application filed on 23.02.2023 for adjourning hearing of the case upto 10.03.2023 with the reason "due to family function and compilation of information time upto 10.03.2023 requires". 4) Without prejudice to ground nos. 1 & 2, CIT(A) has erred in dismissing appeal without deciding appeal on merit of the case as both the issues were related to effect of accounting entries on determination of income. 5) Without prejudice to ground nos. 1 & 2, on the facts and in the circumstances of the case CIT(A) has erred in confirming addition of Rs.7,20,000/- made by the Assessing Officer u/s 68 for alleged unexplained credit in capital account by rejecting explanation of the assessee about sources of such credit without any cogent reason.
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The assessee prays that the addition of Rs.7,20,000/- made u/s 68 be deleted. 6) Without prejudice to ground nos. 1 & 2, on the facts and in the circumstances of the case CIT(A) has erred in confirming addition of Rs. 6,00,000/- made by the Assessing Officer u/s 68 for alleged unexplained credit in capital account by rejecting explanation of the assessee about sources of such credit without any cogent reason. The assessee prays that the addition of Rs. 6,00,000/- made u/s 68 be deleted. 7) The appellant reserves the right to add, amend, or alter or withdraw any ground or grounds of appeal at the time of hearing.”
Succinctly stated, the assessee who is engaged in the business of transportation had e-filed his return of income for A.Y.2014-15 on 07.08.2014, declaring an income of Rs.10,46,030/-. Case of the assessee was thereafter selected for scrutiny assessment u/s.143(2) of the Act. Original assessment was framed by the A.O vide his order passed u/s.143(3) dated 29.12.2016, wherein after making additions aggregating to Rs. 13,20,000/- u/s.68 of the Act, viz. (i) amount returned by Shri Ranjit Sharma on cancellation of agreement for purchase of land : Rs.7.20 lac; and (ii) recharacterizing of gift claimed by the assessee to have been received from Shri Yogesh Parakh, proprietor of M/s. Mahaveer Transport, as an unexplained cash credit : Rs.6 lac, the income of the assessee was assessed by the A.O vide his order passed u/s.143(3) dated 29.12.2016 at Rs.23,66,030/-.
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Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. As is discernible from the order of the CIT(Appeals), it transpires that as the assessee despite having been afforded sufficient opportunities had failed to put up an appearance nor filed any written submissions before the first appellate authority, therefore, the latter had for the said reason upheld the addition of Rs.13.20 lac made by the A.O u/s.68 of the Act.
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me.
Shri R.B Doshi, Ld. Authorized Representative (for short ‘AR’) for the assessee, at the very outset assailed the order of the CIT(Appeals) on the ground that he had grossly erred in disposing off the appeal on the basis of a non-speaking order. It was submitted by the Ld. AR that though the assessee had vide his letter dated 23.02.2023 due to certain pre-occupation requested for an adjournment of the hearing of the appeal upto 10.03.2023, but the CIT(Appeals) without taking any cognizance of his said request had proceeded with the matter. The Ld. AR in order to buttress his aforesaid claim had placed on record a copy of the letter requesting for the adjournment that was uploaded on 23.02.2023. At the same time, the Ld. AR candidly submitted that though the matter was fixed for hearing on 20.02.2023 but the said request letter was only uploaded on 23.02.2023. On
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the basis of the aforesaid facts, it was submitted by the Ld. AR that not only the CIT(Appeals) had erred in not taking cognizance of the assessee’s request for adjournment (though filed belatedly on 23.02.2023), but also there was no justification for him to have disposed off the appeal on the basis of a non-speaking order.
Shri Piyush Tripathi, Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities.
I have heard the ld. authorized representative of both the parties, perused the orders of the lower authorities as well as material available on record. Before proceeding any further, I shall first deal with the claim of the Ld. AR that the CIT(Appeals) had erred in not considering the asssessee’s letter for adjournment that was uploaded on 23.02.2023 (supra). I am of the considered view, that now when the hearing of the appeal as pointed out by the Ld. AR was fixed on 20.02.2023, therefore, there was no justification for the assessee to have filed the application for adjournment on 23.02.2023.
Be that as it may, I find substance in the claim of the Ld. AR that the CIT(Appeals) had disposed off the present appeal by way of a non-speaking ex-parte order. On a careful perusal of the order of the CIT(Appeals), I find that as the assessee had failed to put up an appearance in the course of proceedings before him, therefore, it was presumed that the assessee was
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not interested in pursuing his appeal. Having said so, in my considered view, the CIT(Appeals) ought not have culminated the proceedings on the basis of a non-speaking order, and was obligated to have dealt with the specific grounds of appeal on the basis of which the assessment order was assailed before him. I am unable to persuade myself to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). In my considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the CIT(A) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble High Court had observed as under:
"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
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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.”
I, thus, not being able to persuade myself to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the CIT(Appeals) shall afford a reasonable opportunity of being heard to the assessee in the course of the de novo appellate proceedings. The grounds of appeal raised by the assessee are disposed off in terms of the aforesaid observations.
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In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of the aforesaid observations.
Order pronounced in open court on 31st day of May, 2023
Sd/- (रवीश सूद /RAVISH SOOD) �या�यक सद�य/JUDICIAL MEMBER रायपुर / Raipur; �दनांक / Dated : 31st May, 2023. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. The Pr. CIT-1, Raipur (C.G.) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, रायपुर / DR, ITAT, “SMC” Bench, Raipur. गाड� फ़ाइल / Guard File. 6.
आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur
