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2024 (11) TMI 1159 - AT - Income TaxDismissal of the appeal by the CIT(Appeals) for non-prosecution - validity of assessment u/s 147 r.w.s.144B - HELD THAT - CIT(Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issue which did arise from the impugned order and was assailed by the assessee before him. Unable to persuade to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). 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(Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per the mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution - See PREMKUMAR ARJUNDAS LUTHRA (HUF) 2016 (5) TMI 290 - BOMBAY HIGH COURT Unable to persuade 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.
Issues:
Jurisdictional validity of assessment under Sec. 147 r.w.s.144B of the Income-tax Act, 1961. Admissibility of additional grounds of appeal challenging jurisdiction. Dismissal of appeal by CIT(Appeals) for non-prosecution. Analysis: Jurisdictional Validity of Assessment: The appeal challenged the order passed by the Commissioner of Income-Tax (Appeals) arising from the order under Sec. 147 r.w.s.144B of the Act for the assessment year 2018-19. The assessee contended that the assessment order was unjustified, lacked reasonable opportunity of being heard, and was not in accordance with the law. The Assessing Officer (A.O) initiated proceedings under Sec. 147 based on cash withdrawals and contract receipts. The A.O observed discrepancies in the income declared by the assessee and made an addition of Rs. 35,37,909. The CIT(Appeals) upheld this addition. The ITAT admitted the additional grounds challenging the jurisdiction assumed by the A.O. The ITAT considered the judgment in National Thermal Power Company Ltd. case, allowing admission of additional grounds involving questions of law without further verification of facts. Admissibility of Additional Grounds of Appeal: The assessee raised additional grounds challenging the jurisdiction of the A.O. The ITAT admitted these grounds as they pertained to a question of law and required no further verification of facts. The ITAT relied on legal precedent to support the admission of such additional grounds. The ITAT emphasized that the CIT(Appeals) is obligated to consider all issues arising from the impugned order, even if not raised by the appellant, and cannot summarily dismiss an appeal for non-prosecution. The ITAT set aside the order of the CIT(Appeals) and directed a de-novo disposal of the appeal on merits, ensuring a reasonable opportunity for the assessee to be heard. Dismissal of Appeal by CIT(Appeals) for Non-Prosecution: The CIT(Appeals) dismissed the appeal due to non-prosecution by the assessee. The ITAT found this dismissal improper, citing statutory obligations for the CIT(Appeals) to apply his mind to all issues arising from the order before him. The ITAT referenced a Bombay High Court judgment emphasizing that the CIT(Appeals) must dispose of appeals on merits, even if not pressed by the appellant. The ITAT allowed the appeal for statistical purposes, directing the CIT(Appeals) to reconsider the matter on its merits and provide a fair opportunity for the assessee to present their case. In conclusion, the ITAT allowed the appeal for statistical purposes, emphasizing the importance of due process and fair consideration of all issues in tax assessment appeals.
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