2024 (4) TMI 404 - AT - Income Tax

Dismissal of the appeal by the CIT(Appeals) for non-prosecution - HELD THAT - CIT(Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issues which did arise from the impugned order and was assailed by the assessee before him. 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 on account of non-prosecution of the same by the assessee. 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(A) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. As persuade myself to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution therefore set-aside his order with a direction to dispose off the same on merits. CIT(Appeals) in the course of the de novo appellate proceedings shall afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to raise the additional grounds of appeal which have been raised before us. Thus appeal filed by the assessee company is allowed for statistical purposes.

Summary

Issues Involved:
The appeal challenges the order passed by the Commissioner of Income-Tax (Appeals) regarding disallowance of depreciation, interest charges, and adjustment to book profit u/s 115JB for the assessment year 2013-14. Additionally, the validity of the notice u/s 148 of the IT Act is contested.

Depreciation Disallowance:
The appellant contested the disallowance of depreciation at a higher rate of 30% on JCB and Tata Hitachi vehicles. The Assessing Officer (A.O) rejected the claim citing that the vehicles were not eligible for higher depreciation as they were not used in the business of running them on hire. The appellant referred to a judgment supporting JCB's entitlement to higher depreciation. The issue was examined in light of relevant provisions and judicial decisions.

Interest Charges Disallowance:
The A.O disallowed interest charges of Rs. 14,01,072 under u/s 40(a)(ia) of the Act for non-deduction of TDS. The appellant argued that interest paid to nationalized banks was not subject to TDS as per Section 194A(3)(a) of the Act. Detailed submissions were made regarding the tax deducted at source and timely deposits. The issue was analyzed considering the provisions of the Act and the appellant's contentions.

Jurisdictional Validity of Notice u/s 148:
The appellant raised concerns about the validity of the notice u/s 148 dated 30/03/2021, contending that it was invalid as the jurisdiction lay with ITO, Bhatapara, not ITO 1(1), Raipur. The absence of evidence of transfer of jurisdiction as required by section 127 of the IT Act was highlighted. The jurisdictional aspect was examined in light of statutory provisions and legal requirements.

CIT(A) Dismissal for Non-Prosecution:
The CIT(A) dismissed the appeal for non-prosecution as the appellant failed to participate in the proceedings. The appellant's elaborate grounds of appeal were not considered, leading to the dismissal. The appellant challenged this dismissal citing statutory obligations of the CIT(A) to dispose of appeals on merit. The legal position regarding CIT(A)'s duty to consider all issues raised in the appeal was emphasized, leading to the setting aside of the dismissal order.

Conclusion:
The appeal filed by the appellant company is allowed for statistical purposes, directing the CIT(A) to reconsider the matter on merits. The CIT(A) is instructed to provide a fair opportunity for the appellant to present additional grounds of appeal. The judgment emphasizes the obligation of the CIT(A) to address all issues raised in the appeal and not dismiss it for non-prosecution.