Mangalam Developers Vs ITO (ITAT Mumbai)
ITAT Mumbai held that CIT(A) is not vested with any power to summarily dismiss the appeal on account of non prosecution. CIT(A) remains under statutory obligation to dismiss appeal on merits. Accordingly, matter remanded back to CIT(A) for denovo adjudication.
Facts- The present appeal is filed by the assessee mainly contesting that CIT(A) has erred in sustaining the addition of Rs 46,24,350/- made by the Learned Assessing Officer (A.O) u/s 43CA r.w.s56(2)(vii)(b) under the pretext of sale of flats below the market value without considering the fact that the agreements of those flats were made in earlier years against advance payment received through cheque, when the market value was lower than agreement value and accordingly the said transactions were covered by section 43CA(3), hence the addition was required to be deleted.
Notably, it is alleged that CIT(A) has dismissed the appeal in limine due to non-prosecution without dealing with merits of the case.
Conclusion- Held that the Ld.CIT(Appeals)/NFAC dismissed the appeal of the assessee in limine for non-prosecution without dealing with the merits of the case. 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 for want of prosecution. 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(Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per the mandate of law the CIT(Appeals)/NFAC is not vested with any power to summarily dismiss the appeal on account of non prosecution.
