2024 (11) TMI 232 - AT - Income Tax

CIT(A) dismissing the appeal of the assessee ex-parte - there was non compliance on the part of the assessee to the various notices issued by him - HELD THAT - It is a fact that there was a non-compliance before the CIT(A). However, there was a reasonable sufficient cause for non-compliance. Also, as per Section 250(6) of the Act, CIT(A) has to state the points for determination and the reasons for his decision, meaning thereby CIT(A) has to discuss the merits of the addition. In this case, assessee has raised the issue that Specified Domestic Transactions u/sec.92BA were excluded by Finance Act, 2017. Admittedly, TPA are only with reference to Specified Domestic Transactions. This issue has not been discussed by the ld.CIT(A). As held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra 2016 (5) TMI 290 - BOMBAY HIGH COURT as noticed that the powers of the CIT(A) is coterminous with that of the AO i.e. he can do all that AO could do. Therefore just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. The order of the CIT(A) NFAC is set-aside to CIT(A) for denovo adjudication. The ld.CIT(A) shall provide opportunity of hearing to the assessee. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.

Summary

Issues:
Appeals against orders of Commissioner of Income Tax(Appeal) for A.Y. 2013-14 and 2014-15, non-compliance with notices, Transfer Pricing addition, exclusion of Specified Domestic Transactions u/sec.92BA by Finance Act 2017, dismissal of appeal for non-prosecution, denovo adjudication by CIT(A).

Analysis:
The Assessee filed two appeals against separate orders of the Commissioner of Income Tax(Appeal) for A.Y. 2013-14 and 2014-15. The appeals were consolidated due to a common issue. The Assessee raised various grounds of appeal, including non-compliance with notices issued by the CIT(A) and Transfer Pricing additions. The Assessee contended that they did not receive the notices as the business had closed down, and there was no malafide intention in non-compliance. The Assessee requested an opportunity to present their case. The Departmental Representative agreed that the CIT(A) did not discuss the merits of the additions.

The Tribunal noted the non-compliance before the CIT(A) but found a reasonable cause for it. The CIT(A) failed to discuss the merits of the case, as required by Section 250(6) of the Act. The Assessee argued that Specified Domestic Transactions were excluded by the Finance Act 2017, which was not considered by the CIT(A). Citing a Bombay High Court case, the Tribunal emphasized that the CIT(A) must decide appeals on merit and cannot dismiss appeals for non-prosecution. Therefore, the Tribunal set aside the CIT(A)'s order for denovo adjudication, directing a fresh hearing and consideration of the Assessee's case.

Consequently, the Tribunal allowed the Assessee's appeals for statistical purposes, granting relief in both cases. The Tribunal applied the decision from the lead case to a related appeal, allowing the grounds raised by the Assessee. The orders were pronounced in open court on 22nd October 2024, providing a comprehensive resolution to the issues raised in the appeals.