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2022 (4) TMI 1526 - AT - Income TaxCIT-A powers dismissing assessee's appeal in limine for non- prosecution - HELD THAT - As powers of Ld. CIT(A) are co-terminus with powers of the Assessing Officer. When the Commissioner (Appeals) dismisses the appeal of assessee in limine for non-prosecution of appeal by the assessee; in effect, indirectly it leads to same results as withdrawal of appeal by assessee. When the assessee is not permitted to withdraw the appeal filed before the first appellate authority, the first appellate authority is duty bound to not allow a situation to arise, through dismissal of appeal in limine for non-prosecution of appeal before the first appellate authority; in which, in effect, indirectly the same results are obtained as arise from withdrawal of appeal by the assessee. What cannot be permitted in law to be done directly, cannot be permitted to be done indirectly either, as is well settled. In view of the foregoing discussion; it is amply clear that Ld. CIT(A) was in error in dismissing the appeal in limine for non-prosecution of appeal by the assessee. We draw support from order of CIT vs. Premkumar Arjundas Luthra (HUF) 2016 (5) TMI 290 - BOMBAY HIGH COURT for the proposition that Ld. CIT(A) is required to apply her mind to all issues which arise from impugned order before her whether or not same had been raised by appellant before her; and further, that CIT(A) is obliged to dispose of the appeal on merits. We set aside the impugned order of the Ld. CIT(A) and we direct the Ld. CIT(A) to pass denovo order as per law, in accordance with Sections 250 and 251 - Assessee s appeal is partly allowed for statistical purposes.
Issues Involved:
1. Dismissal of the appeal by the CIT(A) without giving sufficient opportunity of being heard. 2. Addition of ?22,23,00,000/- under Section 68 of the Income Tax Act by treating share application money as unexplained credit. 3. Ignoring confirmations and documents provided by the nine investor companies. 4. Request for permission to amend grounds of appeal. 5. Assurance of cooperation in proceedings. Detailed Analysis: 1. Dismissal of the Appeal by the CIT(A) Without Giving Sufficient Opportunity of Being Heard: The appellant contended that the CIT(A) dismissed the appeal hurriedly without providing adequate opportunity to be heard. The ITAT noted that the CIT(A) dismissed the appeal in limine due to non-compliance with hearing notices. The CIT(A) recorded multiple instances of non-appearance or adjournment requests by the assessee. The ITAT emphasized that under Section 250(6) of the Income Tax Act, the CIT(A) is required to dispose of the appeal in writing, stating the points for determination and providing reasons for the decision. The CIT(A) was duty-bound to decide the appeal on merits rather than dismissing it for non-prosecution. 2. Addition of ?22,23,00,000/- Under Section 68 of the Income Tax Act by Treating Share Application Money as Unexplained Credit: The appellant argued that the addition of ?22,23,00,000/- under Section 68 was erroneous as the assessee had established the source of investment, identity, genuineness, and creditworthiness of the investor companies. The ITAT noted that the CIT(A) did not address the merits of the case due to the in limine dismissal. The tribunal highlighted that the CIT(A) has plenary powers co-terminus with those of the Assessing Officer and should have examined the merits of the case, including the evidence provided by the assessee. 3. Ignoring Confirmations and Documents Provided by the Nine Investor Companies: The appellant contended that the Assessing Officer ignored the confirmations, PAN details, income tax returns, balance sheets, and bank statements provided by the nine investor companies. The ITAT reiterated that the CIT(A) should have examined these documents and the merits of the case instead of dismissing the appeal for non-prosecution. The tribunal referenced the Supreme Court judgments in CIT vs. Orissa Corporation and Lovely Exports Pvt. Ltd., which support the assessee's contention. 4. Request for Permission to Amend Grounds of Appeal: The appellant sought permission to add, delete, or amend one or more grounds of appeal. The ITAT did not specifically address this issue in the judgment but focused on the procedural lapses by the CIT(A) in dismissing the appeal without examining the merits. 5. Assurance of Cooperation in Proceedings: The appellant assured cooperation in all proceedings. The ITAT noted the absence of representation from the assessee during the hearing but emphasized the CIT(A)'s duty to dispose of the appeal on merits. Conclusion: The ITAT concluded that the CIT(A) erred in dismissing the appeal in limine for non-prosecution. The tribunal set aside the impugned order and directed the CIT(A) to pass a de novo order as per law, in accordance with Sections 250 and 251 of the Income Tax Act. The appeal was partly allowed for statistical purposes. The written order was signed on 07.04.2022, following the oral pronouncement on 06.04.2022.
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