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TMI Blog2025 (2) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... ose assessee's appeal merely by holding that AO's order is a self-speaking order which requires no interference.
It has also been held in the case Premkumar Arjundas Luthra (HUF) [2016 (5) TMI 290 - BOMBAY HIGH COURT] that the law does not empower the Ld. CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.
We deem it appropriate to remit the matter back to the Ld. CIT(A) for disposal of the grounds taken by the assessee on merits, by passing a speaking order. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of various grounds of appeal and the Ld. CIT(A) shall decide the appeal in accordance with law and after following Rule 46A of the Income-tax Rules, 1962, if required. Appeal filed by the assessee is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... AO') rejected the submission made and added a sum of Rs. 65,00,000/- as 'income from business or profession', out of which deduction u/s 80-IE of the Act was also allowed and the total income was computed at Rs. 'NIL'. However, the sum of Rs. 65,00,000/- was added while computing Adjusted Total Income and tax was charged accordingly. 3.1. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A). It is stated that though the assessee's case was fixed several times before the Ld. CIT(A) by issuing the notice of hearing on several dates but the same escaped the attention of the assessee as the notices were issued through e-mail and the assessee not being conversant with the electronic IT proceedings, had no knowledge about these notices. Due to non-compliance to the notices issued, the Ld. CIT(A) passed an ex-parte order on 25.01.2024 by dismissing the appeal and upheld the assessment order. Aggrieved with the appeal order, the assessee has filed appeal before us. 4. We have heard rival contentions and the written submission filed by the assessee were also examined. Ground no. 1 relates to the Ld. CIT(A) not being justified in passing the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required the assessee to explain the difference of Rs. 1,68,45,776/- between the valuation done at the time of survey and the closing stock estimated on the basis of recast trading account as per page 2 of the assessment order. It was also submitted before us that there was no adverse comment by the Ld. AO in para 3 and no fault was found with the books of accounts. In para 4 of the assessment order the submission made vide the reply dated 18.12.2019 by the partner of the firm has been reproduced which is as under: "4. Subsequently notices u/s 142(1) of the Income tax Act. 1961 was issued to the assessee on 16/12/2019 and asking from assessee why the amount of Rs. 65,00,000/- should not be added to the total income of M/ Laxmi Narayan Packaging Industries as disclosed during the survey proceeding. In its reply vide letter dated 18/12/2019 partner of assessee firm informed as under: "That Sir, the physical verification of Stock at my factory was done by ... come-Tax Department personnel on 15/09/2076 which was incorrect. While taking physical slock, the majority of the stock items are taken on estimate basis e.g. there are 3 entries of Rs. 40,00,000/-, Rs 30,00,000/- and Rs 20,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trips (P.) Ltd. Vs. A.C.I.T. (2006) 99 ITD 177 (Delhi) "Annexure - D" (at Pages 69 to 83). Further reliance was placed upon the decision of Hon'ble Madras High Court in the case of C.I.T. Vs. S. Khader Khan Son (2008) 300 ITR 157 (Madras) which was affirmed by the Hon'ble Supreme Court in the case of C.I.T. Vs. S. Khader Khan Son (2013) 352 ITR 480 (SC) and also upon the decision of the Hon'ble Delhi High Court in the case of P.C.I.T. Vs. ARN Infrastructure Ltd. 2023 (8) TMI 386 in support of the claim that the provisions of Section 133A of the Act do not empower any IT authority to examine any person on oath and that the addition made on the sole basis of statement recorded during survey, which later on was retracted and in the absence of any incriminating material to corroborate the same was liable to be deleted. The assessee has also relied upon (a) Circular No. F. No. 286/2/2003 - IT (Inv-II) dated 10.03.2003 and (b) Circular No. F. No. 286/98/2013-IT (Inv-II) dated 18.12.2014 in support of the claim that no addition should be made which are solely based on the statements recorded during the course of search and survey as these statements have no evidentiary value in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwal also acknowledged the discrepancy in his statement. The assessee reversed its stand during the assessment proceedings and retracted from the disclosure made during the survey. So, the AO was right in making the addition. It is clear that the profit was already booked on the day of survey since the disclosure itself was based on the issue of stock discrepancy. Since the assessee has not filed any submission in this office in spite of several opportunities, it is inferred that the assessee has nothing further to state in this matter. Hence, the addition of Rs. 65,00,000/- to business income made in the assessment order is hereby upheld. Ground No. 1 is dismissed accordingly." 4.5. The assessee has also submitted that the inventory was of a higher value than that which was valued at the time of survey and therefore, the same could not relied upon for making any addition nor the statement which was retracted subsequently could be relied upon. 4.6. We have gone through the submissions made. The Ld. CIT(A) has not given any finding on merits of the case and has dismissed the appeal primarily on account of non-compliance. We also note that while the Ld. CIT(A) has discussed non-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating that he is of the considered view that the Assessing Officer's order is a self speaking order and does not call for any interference. In my considered view, such single line finding of the Appellate Authority, cannot be sustained as a proper exercise of the Appellate Authority, while disposing the appeal. Therefore, it is apparent that the order impugned in this writ petition is an outcome of total non-application of mind. Consequently, the impugned order cannot be sustained. It is further contended that before passing the order, the petitioner was not heard." 5.1. It has also been held in the case of Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) that the law does not empower the Ld. CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. The relevant extract is as under: "7. An appeal is filed with the CIT(A) from appealable orders listed in Section 246A of the Act. We find that the procedure in appeal before the CIT(A) and the powers of the CIT(A) are governed by Sections 250 and 251 of the Act respectively. The relevant provisions for consideration are as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer 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 acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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