14 REELS Venkatboyanapalli JV Vs DCIT (ITAT Hyderabad)
CIT(A) Cannot Dismiss Appeal for Non-Prosecution – Ex-Parte Orders Set Aside & Matters Remanded for Fresh Adjudication
Tribunal dealt with two appeals where CIT(A) had dismissed Assessee’s appeals for both years solely for “non-prosecution,” despite multiple adjournment requests. Assessment orders themselves were framed ex-parte u/s 144 due to non-response. Tribunal relied on the Bombay HC judgment in Premkumar Arjundas Luthra (HUF), holding that CIT(A) has no power to dismiss an appeal for non-prosecution & must decide appeals on merits as mandated u/s 250(6) & 251.
Since neither AO nor CIT(A) examined the factual issues—additions of ₹1.10 crore, ₹3.10 crore, ₹40 lakh, estimation at 8%, & TDS interest-Tribunal held that the proper course is to remand the matters for full verification of facts, evidence, & explanations.
Accordingly, both CIT(A) orders were set aside, & the assessments for both years were remanded to AO for fresh adjudication after giving adequate opportunity to Assessee.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
These two appeals by the Assessee are directed against the two separate orders of the learned CIT(A), Hyderabad-11, Hyderabad, dated 08.02.2025 and 13.03.2025 for the assessment years 2018-2019 and 2017-2018, respectively.
2. The assessee has raised the following grounds for the assessment year 2018-2019 :
1. “On the facts and in the circumstances of the case, the order passed by the ld. Commissioner of Income Tax (Appeals)-11, Hyderabad, is erroneous and unsustainable on facts and in law apart from being passed in violation of principles of natural justice.
2. The ld. Commissioner of Income Tax (Appeals)-11, Hyderabad, erred in dismissing the appeal for want of prosecution. The ld. Commissioner (Appeals) failed to appreciate that as per the provisions of section 250/251 of the Act, the ld. Commissioner (Appeals) cannot dismiss the appeal for alleged ‘non-prosecution’.
3. Without prejudice to above grounds, the Id. Commissioner (Appeals) erred in sustaining the additions of Rs.1,10,00,000 and Rs.3,10,00,000 as unexplained income of the Appellant.
4. Without prejudice to the above grounds, the Id. Commissioner (Appeals) erred in sustaining the action of the AO in estimating the income of the Appellant at 8% on the bank credits in the absence of evidence to that effect.
5. For these and other grounds that may be urged, it is prayed that the Hon’ble Tribunal may be pleased to allow the appeal.”
3. The assessee has raised the following grounds for the assessment year 2017-2018 :
1. “On the facts and in the circumstances of the case, the order of the ld. CIT(A) is erroneous and unsustainable in law apart from being passed in violation of principles of natural justice. The ld. CIT(A) failed to appreciate that in response to notices issued the Appellant on couple of occasions sought adjournment and that the Id. CIT(A) without granting sufficient opportunity has dismissed the appeal for non-prosecution.
2. Without prejudice to the above, the Id. CIT(A) erred in sustaining the addition made by the AO of Rs.40,00,000 as unexplained income.
3. The authorities below failed to appreciate that once the Appellant denies the signature in the document, it is for the revenue to prove that the amount mentioned in the document is received by the Appellant.
4. The ld. CIT(A) erred in sustaining addition of interest on TDS of Rs.42,525.
5. Any other ground that may be urged at the time of hearing.”
4. At the time of hearing, the learned Authorised Representative of the Assessee has submitted that the learned CIT(A) has dismissed the appeals of the assessee for both the assessment years for want of prosecution. Thus, the learned Authorised Representative of the Assessee has submitted that the impugned orders passed by the learned CIT(A) are not sustainable and liable to be set-aside as the appeals of the assessee were not decided on merits as per the provisions of sec.250 and 251 of the Act. In support of her contentions, she has relied upon the Judgment of Hon’ble Bombay High Court in the case of CIT vs., Premkumar Arjundas Luthra (HUF) [2016] 240 Taxman 133 (Bom.) and submitted that the Hon’ble High Court has held that the learned CIT(A) cannot dismiss the appeals for non-prosecution, but, ought to decide and dispose of the appeals in writing after stating the points for determination and then render a decision on each of the point which arises for consideration with reasons in support. Thus, the learned Authorised Representative of the Assessee has pleaded that The impugned orders of the learned CIT(A) be set-aside and the matter may be remanded to the record of the Assessing Officer.
