Avinash Guptas Godavarthi Vs ITO (ITAT Visakhapatnam)
CIT(A) Cannot Dismiss Appeal for Non-Prosecution; Estimation Section 69A Additions Remanded: ITAT Visakhapatnam Restores Case for Fresh Decision
The Visakhapatnam Division Bench of the Income Tax Appellate Tribunal, Visakhapatnam Bench allowed the appeal of Avinash Guptas Godavarthi for AY 2017-18 for statistical purposes and remanded the entire matter to the CIT(A) for fresh adjudication on merits.
The Assessing Officer had completed assessment u/s 143(3) by:
- estimating business profit @15% on a turnover of ₹2.38 crore,
- making a separate addition of ₹77.78 lakh on other bank credits, and
- treating ₹2.62 crore as unexplained money u/s 69A.
The assessee contended that the cash deposits belonged to M/s Mangalam Enterprises Pvt. Ltd., where he was a Director, and filed an affidavit stating that the income was already offered in that company’s hands. However, due to non-compliance, the CIT(A) dismissed the appeal without adjudicating the grounds on merits.
The ITAT held that, even where the assessee is non-responsive, the CIT(A) is statutorily bound to decide the appeal on merits and cannot dismiss it simpliciter for non-prosecution, relying on the Bombay High Court decision in Premkumar Arjundas (HUF). The Tribunal noted that the CIT(A) should also examine the outcome of the assessment in Mangalam Enterprises Pvt. Ltd. and, if necessary, call for a remand report from the AO.
Accordingly, the ITAT set aside the CIT(A)’s order and restored all issues—profit estimation, bank credit additions, and section 69A addition—for de-novo adjudication, directing the assessee to cooperate fully. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
