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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI RATHOD KAMLESH JAYANTBHAI
आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-II, Raipur (C.G.) dated 25.04.2018, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’), dated 23.03.2016 for assessment year 2013-14. Before us the assessee has assailed the impugned order on the following grounds of appeal:
“1. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals) has erred in dismissing the appeal on the ground of non-compliance without effecting service of notice and without following the procedure laid down in section 250 of the Income-tax Act, 1961. 2. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals) has erred in confirming the disallowance of Rs.5,19,030/- made u/ s.40a(ia) of the Income-tax Act, 1961 without applying the legal position settled on this issue. 3. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals) has erred in confirming the addition of Rs.7,00,000/- as unexplained cash credit u/s.68 of the Income-tax Act, 1961. 4. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals) has erred in confirming addition of Rs.4,12,610/- made u/s.68 on account of purported non-disclosure of contract receipts in Profit and Loss Account. 5. The impugned order is bad in law and on facts. 6. The Appellant reserves right to add, alter, amend, omit any of the grounds of appeal.”
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Succinctly stated, the assessee had e-filed his return of income for the assessment year 2013-14 on 30.03.2014 declaring an income of Rs.11,85,030/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. Original assessment was framed by the A.O u/s.143(3) dated 23.03.2016 determining the income of the assessee at Rs.28,16,670/- after inter alia, making the following additions/ disallowances:
Sr. Particulars Amount No. 1. Disallowance made u/s.40a(ia) of the Rs.5,19,030/- Act. Disallowance u/s.68 of the Act on 2. Rs.7,00,000/- account of unexplained cash credit 3. Disallowance u/s.68 of the Act on Rs.4,12,610/- account of purported non-disclosure of contract receipts in profit & loss account
Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). Observing, that the assessee despite having been put to notice had neither participated in the appellate proceedings nor placed on record any written submissions, the CIT(Appeals) dismissed the appeal for non-prosecution on the part of the assessee.
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The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. As observed by us hereinabove, the CIT(Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issue which did arise from the impugned order and has been assailed by the assessee before him. We are unable to persuade ourselves to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). In our 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. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble jurisdictional 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
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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.” 5. We, thus, not being persuaded 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
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de novo appellate proceedings. The grounds of appeal raised by the assessee are disposed off in terms of our aforesaid observations.
In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in open court on 31st day of May, 2022.
Sd/- Sd/- RATHOD KAMLESH JAYANTBHAI RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 31st May, 2022 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent. 3. The CIT(Appeals)-II, Raipur (C.G) 4. The Pr. CIT-II, Raipur (C.G) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,रायपुर ब�च, रायपुर / DR, ITAT, Raipur 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.
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Date 1 Draft dictated on 31.05.2022 Sr.PS/PS 2 Draft placed before author 31.05.2022 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr. Sr.PS/PS PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order