Case Law Details
Bhav Singh Vs ITO (ITAT Agra)
ITAT Agra held that dismissal of appeal by CIT(A) merely because the assessee did not comply with the notices issued by CIT(A), without adjudicating issues arising in the appeal on merits, is not sustainable in the eyes of law keeping in view provisions of Section 250(6).
Facts- AO made addition of Rs.18,29,000/- on account of cash deposits during the impugned assessment year by the assessee in the Savings Bank account of the assessee, by invoking provisions of Section 69A of the Act.
CIT(Appeals) dismissed the appeal of the assesseeon the grounds that the assessee is not willing to persuethe appeal. On merits also , the ld. CIT(A) dismissed the appeal of the assessee by confirming the assessment order of the AO, as no response/evidence was received from the assessee.
Conclusion- Held that CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes. Under these circumstances and fairness to both the parties, in the interest of justice, the appellate order of CIT(A) is set aside and the matter can go back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties.
FULL TEXT OF THE ORDER OF ITAT AGRA
This appeal in ITA No.169 /Agr/2023 for the assessment year 2011-12 has arisen from the appellate order dated 12.09.2023(DIN& Order No. ITBA/NFAC/S/250/2023-24/1055972046(1)) passed by learned Commissioner of Income-tax(Appeals), NFAC, Delhi, which appeal before ld. CIT(A) in turn, has arisen from the assessment order dated 08.12.2018 passed by Assessing Officer u/s. 143(3)/144 of the Income-tax Act, 1961.
2. The AO received AIR information wrt cash deposits in State Bank of India. The AO asked from the SBI from which AIR information was received , to which SBI replied and gave details.The notice u/s 148 dated 09.03.2018 was issued by the AO to the assessee. There was no response from the assessee. Further, statutory notices were issued by the AO u/s 142(1) during assessment proceedings, but again there was no response from the assessee as no details/submissions were submitted. However, the assessee entered appearance before the AO but did not filed any response/submissions. The Assessing Officer made addition of Rs.18,29,000/- on account of cash deposits during the impugned assessment year by the assesseein the Savings Bank account of the assessee, by invoking provisions of Section69A of the Act.
3. Aggrieved, the assessee filed first appeal with the ld. CIT(Appeals). The assessee stated in statement of fact filed with ld. CIT(A) along with Form No. 35 that the assessee has sold some asset(Agricultural Land) in the own name and along with family members. These amount related to the receipt of sale of agricultural land. The balance amount of the assessee was accumulated income agriculture income of the family for the further purchase of assessee and part of which was deposited in the bank. In the grounds of appeal filed with ld. CIT(A), the assessee raised the ground that the sum of amount Rs. 18,29,000/- was part of the sale of agriculture land. Ld. CIT(Appeals) issued as many as six notices to the assessee, but there was no response from the assessee. Ld. CIT(Appeals) dismissed the appeal of the assesseeon the grounds that the assessee is not willing to persuethe appeal.On merits also , the ld. CIT(A) dismissed the appeal of the assessee by confirming the assessment order of the AO, as no response/evidence was received from the assessee.
4. Still aggrieved, the assessee has filed second appeal with the Tribunal and has raised as many as seven grounds of appeal in Memo of appeal filed with ITAT. None appeared on behalf of the assessee when this appeal was called for hearing. However, an adjournment application was filed by the assessee, which is rejected. Ld. Sr. DR fairly submitted that the appellate order of ld. CIT(Appeals) has not been passed as per provisions of section 250(6) of the Act and the matter can be restored back to the file of ld. CIT(Appeals) for fresh adjudication on merits.
5. I have perused the material on record and have heard the contentions of the ld. Sr. DR. I have observed that the ld. CIT(Appeals) has passed non-speaking cryptic order, in which the ld. CIT(Appeals) has dismissed the appeal ex parte in limine without deciding the issues arising in appeal on merits, mainly on non prosecution of appeal by the assessee and lack of evidence submitted by the assessee to substantiate its stand. Though ld. CIT(Appeals) has issued as many as 6 notices, there was no compliance on the part of the assessee. I further observe that the ld. CIT(Appeals) is required and obligated to pass appellate order in compliance with the provisions of section 250(6), as ld CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. The ld. CIT(A) has to state point for determination, his decision and reasoning thereof, which in the instant case has not been done. The ld. CIT(A) did not even called for the assessment records nor made any enquiry . Reference is drawn to provisions of Section 250(4). The ld. CIT(A) has been vested with vast substantial powers under the 1961 Act, which even include power of enhancement. The ld. CIT(A) is obligated to state point for determination, his decisions and reasoning thereof, as is required u/s 250(6). The assessee has claimed in statement of fact and grounds of appeal filed with ld. CIT(A) that he and his family sold agricultural land , and proceed thereof were deposited with SBI in cash. The ld. CIT(A) did not make any enquiry to unravel the truth. Even assessment records were not called for by ld. CIT(A). The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issues are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld, and that the assessee has not submitted details/documents is not sufficient. The ld. CIT(A) is not toothless as his powers are co-terminus with the powers of the AO, which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes. Under these circumstances and fairness to both the parties, in the interest of justice, the appellate order of CIT(A) is set aside and the matter can go back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties. I have observed that in statement of fact filed with ITAT, the assessee has stated that he is an individual, working as insurance agent for general insurance companies as well as LIC , and in the course of insurance business, it serves a lot of clients from the rural area of Gwalior and adjoining areas of districts of Bhind& Morena, the nature of its clients and business is such in which many of the clients deposit cash in its account for further deposit with insurance companies against the premiums payable on their behalf. Thus, in the course of its regular insurance business , lot of cash is being deposited in its accounts by third parties which is further deposited as premium on their behalf with insurance companies. This plea of the assessee requires verification by the authorities. The object and purpose is to compute income chargeable to tax within the four corner of the mandate of 1961 Act. The ld. CIT(A) shall admit evidences filed by the assessee and shall adjudicate appeal of the assessee on merit in accordance with law.I clarify that I have not commented on the merits of the issues in the appeal. Thus, the matter is set aside and restored to the file of ld. CIT(A) for denovo adjudication of the appeal of the assessee on merits in accordance with law, after giving proper opportunity to both the parties. The assessee is also directed to comply with notices issued by ld. CIT(A). Thus, the appeal of the assessee is allowed for statistical purposes. I order accordingly.
6. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 03.12.2024
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