Shuchi Varshney Vs ITO (ITAT Agra)
Conclusion: Where CIT(A) simply dismiss the appeal merely because assessee did not comply with the notices issued by CIT(A) , in limine without adjudicating issues arising in the appeal on merits , such order was not sustainable in the eyes of law keeping in view provisions of Section 250(6), and also higher appellate authorities would be deprived to see what weighed in the mind of CIT(A) while adjudicating appeal as it would be an order passed without reasoning on the issues on merits .
Held: The case of assessee was selected for framing limited scrutiny through CASS for the reasons cash deposits during the demonetization period’ as per SFT reporting. The statutory notices u/s 143(2) and 142(1) were issued by AO. Assessee explained that the cash deposited was available with her and was given as an advance for purchase of land and the source of cash was from her own earnings as well as gifts received in marriage from relatives and others. Assessee also filed Wealth Tax Return for A.Y. 2015-16 on 29.03.2016 i.e. prior to demonetization period. In the said Wealth Tax Return, assessee declared cash of Rs.5,56,700/- as well as loan advance of Rs.12,20,000/-. AO rejected the contention of assessee, as on examination and verification, it was found that assessee did not attach any documents except e-filing receipt of Wealth Tax to substantiate his claim. No evidence of advance given for purchase of land, own earnings and gifts received was attached in support of the claim. AO observed that Wealth Tax Act was already abolished from financial year 2015-16, and the details of the assets were now required to be filed in the Income-tax Return for the assessment year. AO made additions to the tune of balance amount of Rs.19,44,000/- deposited by assessee in demonetized currency of Rs.1000/- and Rs.500/- in SBN during the demonetization period of 9th November to 30th December, 2016, by treating the same as unexplained money u/s. 69A and taxed in the hands of the assessee u/s. 11 5BBE. CIT(A) simply dismissed the appeal of the assessee by upholding the assessment order passed by the AO by holding that it did not want to interfere with the assessment order passed by the AO. It was held that where CIT(A) simply dismiss the appeal merely because 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 was not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities would be deprived to see what weighed in the mind of CIT(A) while adjudicating appeal as it would be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) was clearly in violation of section 250(6) and liable to be set aside. CIT(A) had to make independent enquiries , which were not done , not even assessment records were called for by CIT(A). It was equally true that assessee also did not complied with the notices issued by CIT(A) and did not file the requisite details/documents to support his contentions. Thus, assessee was equally responsible for its woes. The appellate order of CIT(A) was set aside and the matter could go back to the file of CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties.
