ANKIT GARG,GHAZIABAD V. ITO, WARD 2(1)(1), GHAZIABAD

ITA 5159/DEL/2024

AI Insights

The case involves Ankit Garg, the appellant, who contested the order of the Commissioner of Income Tax (Appeals) regarding the assessment year 2021-22. The primary contention was the dismissal of his appeal by the CIT(A) due to non-prosecution without adjudicating on the merits of the case. The appellant argued that he had not received any notices under section 250, and thus, was unaware of the order until he checked the portal in August 2024. The Assessing Officer had previously made an addition under section 68 of the Income Tax Act, 1961, regarding unexplained cash credits, which the appellant claimed were unsecured loans recorded in his books. The Tribunal noted that the CIT(A) had not addressed the merits of the case and was not empowered to dismiss the appeal for non-prosecution, leading to the decision to remit the case back for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473115 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Other Referred Cases: CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.), MARC Laboratories Ltd. in ITA No.2731, 2732, 2733, 2730, 2734 & 2735/DEL/ 2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: AKHILESH KUMAR
• Keywords: Set aside
• Section: 144; 250; 68

Judgement Text

" Page 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.5159/Del/2024, A.Y. 2021-22 Ankit Garg, CH. No. 206-207, Ansal Satyam RDC, Rajnagar, Ghaziabad PAN: ARLPG0082G Vs. Income Tax officer, Ward-2(1)(1), CGO Complex, Hapur Chungi, Ghaziabad (Appellant) (Respondent) Appellant by Sh. Akhilesh Kumar, Advocate Respondent by Sh. Ashish Tripathi, Sr. DR Date of Hearing 27/02/2025 Date of Pronouncement 27/02/2025 ORDER PER AVDHESH KUMAR MISHRA, AM The appeal for the Assessment Year (hereinafter, the ‘AY’) 2021-22 filed by the assessee is directed against order dated 29.07.2024 of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [hereinafter, the ‘CIT(A)’]. 2. Assessee has raised following grounds of appeal : “1. Because, order of Ld. CIT(Appeals) is bad in law and against the facts and circumstances of the case.] ITA No. 5159/Del/2024 Ankit Garg, Ghaziabad Page 2 2. Because, Id. CIT (Appeals) inherently wrong in dismissing the appeal in limine as none of the notices issued u/s 250 were ever received by the assessee and even assessee could know the order only after visiting portal in Aug, 24, more so when the Id. AO. passed assessment order u/s 144 without any single hearing. Thus, assessee could not get proper opportunity to present his case before any of the authorities below. 3. Because, Id. CIT(A) further erred in not considering the fact that total liability is unilaterally imposed which is against the very purpose of justice. 4. Because, Id. CIT(A) further failed to appreciate that assessee had a strong case on the merit whereby alleged amount of unexplained cash credit are the unsecured loan duly recorded in books of accounts but AO made addition u/s 68 of Act against the said provision that too without proper opportunity to assessee. 5. The Appellant crave leave to add, amend, alter and/or modify the grounds with the leave of the Hon'ble Court.” 3. The relevant facts giving rise to this appeal are that the assessee filed his return of income for A.Y. 2021-22 on 15.03.2022 declaring income of Rs. 7,78,730/-. The case was picked up for scrutiny through CASS to examine his unsecured loans amounting to Rs. 62,37,500/-. The Assessing Officer (hereinafter ‘The AO’) issued statutory notices for explaining the said loans. However, no compliance was ever made; therefore, the sum of Rs. 62,37,500/- was held unexplained under section 68 r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter ‘the Act’). ITA No. 5159/Del/2024 Ankit Garg, Ghaziabad Page 3 3.1 Aggrieved, the assessee filed appeal before the Ld. CIT(A); but he did not succeed due to non-prosecution. 4. The Ld. Authorized Representative (hereinafter, the ‘AR’) drew our attention to the fact that neither the AO nor the Ld. CIT(A) had decided the case on merit. On the other hand, the Ld. Sr. DR, drawing our attention to various Paras of the assessment order and impugned appellate order, submitted that reasonable opportunities of being heard were provided to the appellant/assessee by the AO and the Ld. CIT(A). However, the appellant/assessee tactfully ensured noncompliance to avoid proper investigations. Hence, he prayed for upholding of orders of the lower authorities. On specific query by us, he admitted that the issue in dispute had not been decided on merit either by the AO or the Ld. CIT(A). 5. We have heard both the parties and have perused the material available on the record. We take note of the fact that the Ld. CIT(A) has dismissed the appeal ex parte due to non-prosecution and has not adjudicated the case on merits. Moreover, the Ld. CIT(A) has not decided each ground of appeal after discussing the issues in detail and his reasons for agreeing with the assessment order though he, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen ITA No. 5159/Del/2024 Ankit Garg, Ghaziabad Page 4 for his consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues which arise from the impugned order before him/her, whether or not these issues have been raised by the assessee before him/her. 6. Section 251(1)(a) of the Act provides that while disposing of an appeal against assessment order, the CIT(A) shall have the power to confirm, reduce, enhance or annul the assessment. Similarly, the section 251(1) (b) of the Act provides that in disposing of an appeal against an order imposing a penalty, the CIT(A) may confirm or cancel such orders or vary it so as to either to enhance or to reduce the penalty. On cumulative consideration of the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, it is concluded that the CIT is not empowered to dismiss the appeal for non-prosecution of appeal and is obliged to dispose of the appeal on merits. In this regard, the finding of the Delhi Bench in the case of MARC Laboratories Ltd. in ITA No.2731, 2732, 2733, 2730, 2734 & 2735/DEL/ 2022 is worth extracting as under: “5. We straightway refer to Section 250(6) of the Act which enjoins that the CIT(A) shall state the points for determination before it and the decision shall be rendered on such points along with reasons for ITA No. 5159/Del/2024 Ankit Garg, Ghaziabad Page 5 the decision. Thus, it is incumbent upon the CIT(A) to deal with the grounds on merits even in ex parte order. In view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution. This view is also taken by the Hon'ble Bombay High Court in case of CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.). A bare glance of the order of the CIT(A) shows that CIT(A) has not addressed itself on various points placed for its determination at all and dismissed the appeal of assessee for default in non-appearance. Needless to say, the CIT(A) plays role of both adjudicating authority as well as appellate authority. Thus, the CIT(A) could not have shunned the appeal for non- compliance without addressing the issue on merits. 6. In the totality of the circumstances, we consider it just and expedient to restore the matter back to the CIT(A) in the larger interest of justice with a view to enable the assessee to avail proper opportunity for disposal of appeal by the CIT(A) on various points. The assessee is cautioned to extend full co-operation to the CIT(A) without any demur, failing which, the CIT(A) shall be at liberty to conclude the appellate proceedings in accordance with law. Hence, the order of the CIT(A) appealed against, is set aside and all the issues raised in the impugned appeal are restored back to the file of the CIT(A) for fresh adjudication in accordance with law after giving reasonable opportunity of hearing to the assessee.” 7. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the AO for deciding the case afresh, in accordance with law, after providing adequate opportunity of being heard to the appellant/assessee. The appellant/assessee, no doubt, shall cooperate in remitted assessment proceedings. ITA No. 5159/Del/2024 Ankit Garg, Ghaziabad Page 6 8. In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in open Court on 27th February, 2025 Sd/- Sd/- (ANUBHAV SHARMA) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 28/02/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "