HV Metal ARC Pvt. Ltd., Noida V. ACIT, Circle- 11(1), New Delhi

ITA 1912/DEL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9009 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 19-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M N KUMAR SATHE
• Assessee Lawyers: RAKESH JAIN
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C: NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER & SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 1912/DEL/2018 ( ASSESSMENT YEAR: 2013-14) HV METAL ARC PVT. LTD., NEW DELHI. VS. ACIT, CIRCLE 11(1), NEW DELHI. PAN NO: AABCH8468B APPELLANT RESPONDENT ASSESSEE BY : SH. RAKESH JAIN, ADV. & SH. GURJEET SINGH, ADV. REVENUE BY : SH. M.N. KUMAR SATHE, SR. DR ORDER PER: ANADEE NATH MISSHRA, AM THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE OR DER DATED 29.12.2017 OF LD. CIT(A)-22, NEW DELHI, FOR ASSESSMENT YEAR 2013-14. THE GROUNDS OF APPEAL ARE AS UNDER: I . BECAUSE THE ACTION IS UNDER CHALLENGE ON FACTS & LA W SINCE THE FINDINGS RECORDED QUA APPEAL DISMISSAL IS IN VIOLATION TO TH E PRINCIPLES OF NATURAL & SUBSTANTIAL JUSTICE FOR A DECISION IN ACCORDANCE WI TH LAW. ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 2 OF 12 II. BECAUSE THE ACTION IS BEING CHALLENGED ON ACTS & LAW, FOR MAKING THE ADDITION AMOUNTING RS. 75,80,669/- FOR DISALLOWANCE TO THE EXTENT OF THE 2% OF TOTAL EXPENSES AMOUNTING RS. 37,90,33,493/-. (2) AN EX PARTE ASSESSMENT ORDER WAS PASSED ON 17.03.2016 UNDER SEC TION 144 OF THE INCOME TAX ACT, 1961 (THE I.T. ACT, FOR SHORT ) WHEREIN ADHOC DISALLOWANCE OF 2% OUT OF THE TOTAL EXPENSES OF RS. 37,90,33,493/-, AM OUNTING TO RS. 75,80,669/-, WAS MADE. (2.1) AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFOR E LD. CIT(A), WHO, VIDE AFORESAID ORDER DATED 29.12.2017 DISMISSED THE ASSESSEES APP EAL, ON THE GROUND THAT NO COMPLIANCE WAS MADE TO NOTICES OF HEARINGS ISSUED B Y THE LD. CIT(A). THE LD. CIT(A) PRESUMED THAT THE ASSESSEE DID NOT WISH TO PURSUE T HE APPEAL, AND PASSED AN EX PARTE ORDER DISMISSING THE APPEAL. RELEVANT PORTION OF T HE ORDER OF LD. CIT(A) IS REPRODUCED AS UNDER: 4.1 FROM THE PERUSAL OF THE ABOVE, AS THERE HAS B EEN NO COMPLIANCE IN RESPECT OF ABOVE NOTICES, THEREFORE, IT IS PRESUMED THAT TH E APPELLANT DOES NOT WISH TO PURSUE THE APPEAL. 5. AS A RESULT, THE APPEAL IS DISMISSED. (2.1.1) IN EFFECT, THE LD. CIT(A) DISMISSED THE AP PEAL OF ASSESSEE IN LIMINE FOR THE REASON OF NON-PROSECUTION OF APPEAL BY ASSESSEE. (2.2) AGGRIEVED AGAIN, THE ASSESSEE IS NOW IN APPEA L BEFORE INCOME TAX APPELLATE TRIBUNAL (ITAT). AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR ASSESSEE STATED THAT THE ASSESSEE COULD NOT ATTEND THE HEARINGS FIX ED BY THE LD. CIT(A) BECAUSE NONE ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 3 OF 12 OF THE HEARING NOTICES WERE SERVED ON THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE WISHES TO PREFER APPEAL AGAINST THE ASSESSMENT ORDE R IN CASE THE ASSESSMENT ORDER IS NOT SET ASIDE BY ITAT. ON THE OTHER HAND, THE LD. D EPARTMENTAL REPRESENTATIVES (DR) SUPPORTED THE ORDER OF THE LD. CIT(A) POINTING OUT THAT DESPITE FOUR NOTICES OF HEARING ISSUED BY THE LD. CIT(A), THE ASSESSEE DID NOT APPE AR BEFORE HIM. (3) WE HAVE HEARD BOTH SIDES ATTENTIVELY AND PATIEN TLY. WE HAVE ALSO CAREFULLY PERUSED THE MATERIALS ON THE RECORD. WE FIND THAT THE ORDER OF LD. CIT(A) DOES MAKE A MENTION OF THE HEARING NOTICES ISSUED BY HIM, BUT T HE ORDER DOES NOT CONTAIN ANY REFERENCE OF THE ACTUAL SERVICE OF THESE NOTICES. THE LD. DR ALSO FAILED TO PRODUCE ANY EVIDENCE THAT THE NOTICES OF HEARINGS ISSUED BY THE LD. CIT(A) WERE ACTUALLY SERVED ON THE ASSESSEE. WE ALSO FIND THAT THE LD. CIT(A) HAS NOT PASSED SPEAKING ORDER ON MERITS OF THE ADDITIONS MADE BY THE AO, AND THE ONL Y BASIS FOR DISMISSING THE ASSESSEES APPEAL WAS NON-PROSECUTION OF THE APPEAL BY THE ASSESSEE IN APPELLATE PROCEEDINGS BEFORE LD. CIT(A) WHICH LED THE LD. CIT (A) TO THE PRESUMPTION THAT THE ASSESSEE DID NOT WISH TO PURSUE THE APPEAL. AS NOTE D EARLIER IN PARA (2.1.1), THE LD. CIT(A) DISMISSED ASSESSEES APPEAL IN LIMINE FOR NO N-PROSECUTION OF APPEAL BY ASSESSEE. (3.1) ON PERUSAL OF RECORDS BEFORE US, WE FIND THAT THE IMPUGNED APPELLATE ORDER OF LD. CIT(A) WAS RECEIVED BY THE ASSESSEE ON 08/03/20 18, AND THE ASSESSEE PROMPTLY FILED THIS APPEAL IN ITAT ON 19/03/2018. THE ASSES SEE ALSO FILED A PETITION FOR EARLY HEARING OF THIS APPEAL, WHICH WAS HEARD ON 27/7/201 8 BY A CO-ORDINATE BENCH OF ITAT AND EARLY HEARING WAS GRANTED, FIXING THE HEARING ON 10/10/2018. THE APPELLANT ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 4 OF 12 ASSESSEE ATTENDED THE HEARING ON THE FIRST DATE OF HEARING ITSELF I.E. ON 10/10/2018 AND THE APPEAL OF THE ASSESSEE WAS HEARD ON THAT DAY. FROM THESE FACTS WE CONCLUDE THAT THE ASSESSEE HAS NOT ONLY FILED THIS APPEAL PROMPTL Y, BUT ALSO HAS VIGOROUSLY PREFERRED THE APPEAL AND HAS SINCERELY PROSECUTED ITS APPEAL IN ITAT. (4) THE RELEVANT PROVISIONS UNDER I.T. ACT REGARDIN G PROCEDURE IN APPEAL, AND POWERS OF THE COMMISSIONER [APPEALS] ARE CONTAINED IN SECTIONS 250 AND 251 OF I.T. ACT, WHICH ARE REPRODUCED BELOW FOR READY REFERENCE : 250. (1) THE COMMISSIONER (APPEALS) SHALL FIX A DAY AND PLACE FOR THE HEARING OF THE APPEAL, AND SHALL GIVE NOTICE OF THE SAME TO TH E APPELLANT AND TO THE ASSESSING OFFICER AGAINST WHOSE ORDER THE APPEAL IS PREFERRED . (2) THE FOLLOWING SHALL HAVE THE RIGHT TO BE HEARD AT THE HEARING OF THE APPEAL (A) THE APPELLANT EITHER IN PERSON OR BY AN AUTHOR IZED REPRESENTATIVE; (B) THE ASSESSING OFFICER, EITHER IN PERSON OR BY A REPRESENTATIVE. (3) THE COMMISSIONER (APPEALS) SHALL HAVE THE POWER TO ADJOURN THE HEARING OF THE APPEAL FROM TIME TO TIME. (4) THE COMMISSIONER (APPEALS) MAY, BEFORE DISPOSIN G OF ANY APPEAL, MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT, OR MAY DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO THE CO MMISSIONER (APPEALS). (5) THE COMMISSIONER (APPEALS) MAY, AT THE HEARING OF AN APPEAL, ALLOW THE APPELLANT TO GO INTO ANY GROUND OF APPEAL NOT SPECI FIED IN THE GROUNDS OF APPEAL, IF THE COMMISSIONER (APPEALS) IS SATISFIED THAT THE OM ISSION OF THAT GROUND FROM THE FORM OF APPEAL WAS NOT WILFUL OR UNREASONABLE. (6) THE ORDER OF THE COMMISSIONER (APPEALS) DISPOSI NG OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATIO N, THE DECISION THEREON AND THE REASON FOR THE DECISION. [(6A) IN EVERY APPEAL, THE COMMISSIONER (APPEALS), WHERE IT IS POSSIBLE, MAY HEAR AND DECIDE SUCH APPEAL WITHIN A PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH SUCH APPEAL IS FILED BEFORE HIM UNDER SUB-SECTION (1) OF SECTION 246A ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 5 OF 12 (7) ON THE DISPOSAL OF THE APPEAL, THE COMMISSIONER (APPEALS) SHALL COMMUNICATE THE ORDER PASSED BY HIM TO THE ASSESSEE AND TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER. 251. ( 1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APP EALS) SHALL HAVE THE FOLLOWING POWERS (A) IN APPEAL AGAINST AN ORDER OF ASSESSMENT, MAY CONFI RM, REDUCE, ENHANCE OR ANNUAL THE ASSESSMENT (AA) IN APPEAL AGAINST THE ORDER OF ASSESSMENT IN R ESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABATES UNDER SECTI ON 245HA, HE MAY, AFTER TAKING INTO CONSIDERATION ALL THE MATERIAL AND OTHE R INFORMATION PRODUCED BY THE ASSESSEE BEFORE, OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDED BY, THE SETTLEMENT COMMISSION, IN THE COURSE OF THE PROCEED ING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD, CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT; (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALT Y, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHER TO ENHANCE OR TO REDUCE THE PENALTY; (C) IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN T HE APPEAL AS HE THINKS FIT. (2) THE COMMISSIONER (APPEALS) SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HA S HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT OR REDUCT ION. EXPLANATION.IN DISPOSING OF AN APPEAL, THE COMMISS IONER (APPEALS) MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF THE P ROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTANDING THAT S UCH MATTER WAS NOT RAISED BEFORE THE COMMISSIONER (APPEALS) BY THE APPELLANT. SE MORE (4.1) A PERUSAL OF THE ABOVE PROVISIONS OF LAW SHOW S THAT U/S 250(6) OF I.T. ACT THE LD. CIT(A) WAS OBLIGED TO DISPOSE OF THE APPEAL IN WRIT ING AFTER STATING THE POINTS FOR DETERMINATION AND TO THEN PASS AN ORDER ON EACH OF THE POINTS WHICH AROSE FOR CONSIDERATION; AND THE LD. CIT(A) WAS FURTHER OBLIG ED TO STATE THE REASONS FOR HIS DECISION ON EACH SUCH POINTS WHICH AROSE FOR DETERM INATION. THUS, THE LD. CIT(A) WAS DUTY BOUND TO DISPOSE OF THE APPEAL ON MERITS. MORE OVER, THE PERUSAL OF SECTION ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 6 OF 12 251(1)(A) AND (B) OF I.T. ACT AND THE FURTHER PERUS AL OF EXPLANATION OF SECTION 251(2) OF I.T. ACT SHOWS THAT THE LD. CIT(A) WAS REQUIRED TO APPLY HIS MIND TO ALL THE ISSUES WHICH AROSE FROM THE IMPUGNED ORDER BEFORE HIM, WHETHER O R NOT THESE ISSUES HAD BEEN RAISED BY THE ASSESSEE BEFORE HIM. ALSO, SECTION 25 1(1)(A) OF I.T. ACT PROVIDES THAT WHILE DISPOSING OF AN APPEAL AGAINST ASSESSMENT ORD ER, COMMISSIONER (APPEALS) SHALL HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. SIMILARLY, THE SECTION 251(1) (B) PROVIDES THAT IN DISPOSING OF AN APPEAL AGAINST AN ORDER IMPOSING A PENALTY, COMMISSIONER (APPEALS) MAY CONFIRM OR CANC EL SUCH ORDERS OR VARY IT SO AS TO EITHER TO ENHANCE OR TO REDUCE THE PENALTY. ON CUM ULATIVE CONSIDERATION THE PROVISIONS U/S 250(6) READ WITH SECTIONS 250(4), 250(5), 251(1 )(A), 251(1)(B) AND EXPLANATION OF SECTION 251(2) OF I.T. ACT , WE COME TO THE CONCLUS ION THAT THE LD. CIT(A) IS NOT EMPOWERED TO DISMISS THE APPEAL IN LIMINE FOR NON-P ROSECUTION OF APPEAL AND IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. ONC E THE ASSESSEE FILES AN APPEAL U/S 246A OF I.T. ACT, THE ASSESSEE SETS IN M OTION THE MACHINERY DESIGNED FOR DISPOSAL OF THE APPEAL UNDER SECTIONS 250 AND 251 OF I.T. ACT. IF THE APPEAL FILED BY THE ASSESSEE FULFILS THE REQUIR EMENTS OF MAINTAINABILITY AND ADMISSIBILITY PRESCRIBED UNDER SECTIONS 246, 24 6A, 248 AND 249 OF I.T. ACT; NEITHER THE ASSESSEE CAN STOP THE FURTHER WORK ING OF THAT MACHINERY AS A MATTER OF RIGHT BY WITHDRAWING THE APPEAL, OR BY NO T PRESSING THE APPEAL, OR BY NON-PROSECUTION OF THE APPEAL; NOR THE FIRST APP ELLATE AUTHORITY, CIT(A) IN THIS CASE, CAN HALT THIS MACHINERY BY IGNORING EITH ER THE PROCEDURE IN APPEAL ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 7 OF 12 PRESCRIBED U/S 250 OF I.T. ACT OR POWERS OF COMMISS IONER (APPEALS) PRESCRIBED U/S 251 OF I.T ACT. CIT(A), THE FIRST AP PELLATE AUTHORITY, CANNOT DISMISS ASSESSEES APPEAL IN LIMINE FOR NON- PROSEC UTION WITHOUT DECIDING THE APPEAL ON MERITS THROUGH AN ORDER IN WRITING, STATI NG THE POINTS OF DETERMINATION IN THE APPEAL, THE DECISION THEREON A ND THE REASON FOR THE DECISION . IT IS WELL-SETTLED THAT POWERS OF LD. CIT(A) ARE CO-TERMINUS WITH POWERS OF THE ASSESSING OFFICER. USEFUL REFERENCE MAY BE MAD E TO ORDER OF APEX COURT DECISION IN CIT VS. KANPUR COAL SYNDICATE 53 ITR 225 (SC) IN WHICH IT WAS HELD THAT AAC HAS PLENARY POWERS IN DISPOSING OFF AN APPEAL; THAT THE SCOPE OF HIS POWER IS CO-TERMINUS WITH THAT OF THE ITO, THAT HE CAN DO WHAT THE ITO C AN DO AND ALSO DIRECT HIM TO DO WHAT HE FAILED TO DO. IN THIS CONTEXT, USEFUL REFE RENCE MAY ALSO BE MADE TO APEX COURTS DECISIONS IN THE CASES OF CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA 66 ITR 443 AND CIT VS. B.N. BHATTACHARGEE 118 ITR 461 (SC) FOR THE PROPOSITION THAT AN ASSESSEE HAVING ONCE FILED AN APPEAL, CANNO T WITHDRAW IT AND EVEN IF THE ASSESSEE REFUSES TO APPEAR AT THE HEARING, THE FIRS T APPELLATE AUTHORITY CAN PROCEED WITH THE ENQUIRY AND IF HE FINDS THAT THERE HAS BEEN AN UNDER-ASSESSMENT, HE CAN ENHANCE THE ASSESSMENT. JUST AS, ONCE THE ASSESSMENT PROCEEDINGS ARE SET IN MOTION, IT IS NOT OPEN TO THE ASSESSING OFFICER TO NOT COMPLET E THE ASSESSMENT PROCEEDINGS BY ALLOWING THE ASSESSEE TO WITHDRAW RE TURN OF INCOME; IT IS SIMILARLY, BY ANALOGY, NOT OPEN FOR LD. CIT(A) TO NOT PASS ORDER ON MERITS BY DISMISSING THE APPEAL IN LIMINE WHETHER ON ACCOUNT OF NON-PROSECUTION OF ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 8 OF 12 APPEAL BY THE ASSESSEE OR IF THE ASSESSEE SEEKS TO WITHDRAW THE APPEAL OR IF THE ASSESSEE DOES NOT PRESS THE APPEAL. WHEN THE COMMISSIONER (APPEALS) DISMISSES THE APPEAL OF ASSESSEE IN LIMINE FOR NON- PROSECUTION OF APPEAL BY THE ASSESSEE; IN EFFECT, INDIRECTLY IT LEADS TO SAME RE SULTS AS WITHDRAWAL OF APPEAL BY ASSESSEE. WHEN THE ASSESSEE IS NOT PERMITTED TO WITHDRAW THE APPEAL FILED BEFORE THE FIRST APPELLATE AUTHORITY, THE FIRST APP ELLATE AUTHORITY IS DUTY BOUND TO NOT ALLOW A SITUATION TO ARISE, THROUGH DI SMISSAL OF APPEAL IN LIMINE FOR NON-PROSECUTION OF APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY; IN WHICH, IN EFFECT, INDIRECTLY THE SAME RESULTS ARE OBTAINE D AS ARISE FROM WITHDRAWAL OF APPEAL BY THE ASSESSEE. WHAT CANNOT BE PERMITTED IN LAW TO BE DONE DIRECTLY, CANNOT BE PERMITTED TO BE DONE INDIRECTLY EITHER, AS IS WELL SETTLED. IN VIEW OF THE FOREGOING DISCUSSION; AND ON CAREFUL PERUSAL OF SECTION 250(6) R.W.S. 250(4), 250(5), 251(1)(A), 251(1)(B) AND EXPLANATION TO SECTION 251(2) OF I.T. ACT; IT IS AMPLY CLEAR THAT LD. CIT(A) HAS NO POWER TO DISMISS APPEAL IN LIMINE FOR NON- PROSECUTION OF APPEAL BY THE ASSESSEE. WE DRAW SUP PORT FROM ORDER OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) [2016] 240 TAXMAN 133 FOR THE PROPOSITIONS THAT LD. CIT(A) IS REQUIRED TO APPLY HIS MIND TO ALL ISSUES WHICH ARISE FROM IMPUGNED ORDER BEFORE HIM W HETHER OR NOT SAME HAD BEEN RAISED BY APPELLANT BEFORE HIM; AND THAT CIT(A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN THIS CASE, IT WAS HELD AS UNDER: 8 IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED B EFORE THE CIT(A), THEN IN DISPOSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQU IRY THAT HE THINKS FIT OR DIRECT THE ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 9 OF 12 ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPOR T THE RESULT OF THE SAME TO HIM AS FOUND IN SECTION 250(4) OF THE ACT. FURTHER SECTION 250(6) OF THE ACT OBLIGES THE CIT(A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING TH E POINTS FOR DETERMINATION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WITH REASONS IN SUPPORT. SECTION 251(1)(A) AND (B) OF THE ACT PROVI DE THAT WHILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENH ANCE 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, T HE CIT(A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEE DINGS 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 TH E APPEAL. IN FACT THE CIT(A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT WITH EF FECT 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 O F 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 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 H AS BEEN RAISED BY THE APPELLANT BEFORE HIM. ACCORDINGLY, THE LAW DOES NOT EMPOWER T HE CIT(A) TO DISMISS THE APPEAL FOR NON-PROSECUTION AS IS EVIDENT FROM THE PROVISIONS O F THE ACT. (4.1.1.) WE HAVE ALREADY NOTED IN FOREGOING PARAGR APH (3.1) OF THIS ORDER, THAT THE ASSESSEE HAS NOT ONLY FILED THE APPEAL PROMPTLY, BU T ALSO HAS VIGOROUSLY PREFERRED THE APPEAL AND HAS SINCERELY PROSECUTED ITS APPEAL IN I TAT. AT THE TIME OF HEARING BEFORE US, THE ASSESSEES COUNSEL HAS EXPRESSED THE WISH T O PURSUE APPEAL AGAINST THE ASSESSMENT ORDER, IF THE ASSESSMENT ORDER IS NOT SE T ASIDE. THUS, THERE IS NOTHING IN THE SUBSEQUENT CONDUCT OF THE ASSESSEE, AFTER THE A SSESSEE RECEIVED THE IMPUGNED ORDER DATED 29.12.2017 OF LD. CIT(A), TO VALIDATE T HE PRESUMPTION OF LD. CIT(A) THAT THE ASSESSEE DID NOT WISH TO PURSUE THE APPEAL. FUR THER, WE HAVE ALSO NOTED THE FACTS, THAT THE ORDER OF LD. CIT(A) DOES NOT MAKE ANY MENT ION OF ACTUAL SERVICE OF NOTICES OF ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 10 OF 12 HEARING ON THE ASSESSEE; AND THAT THE LD. DR FAILED TO BRING ANY EVIDENCE FOR OUR CONSIDERATION TO PROVE ACTUAL SERVICE OF NOTICES OF HEARING ON THE ASSESSEE. IN THE ABSENCE OF PROOF OF SERVICE OF NOTICE OF HEARING ON THE ASSESSEE, REQUIREMENTS U/S 250(1) AND (2) IN PROCEDURE IN APPEAL PRESCRIBED U/ S 250 OF I.T. ACT CANNOT BE SAID TO HAVE BEEN FULFILLED . UNLESS THE HEARING NOTICE IS SERVED ON THE ASSES SEE, THE ASSESSEES RIGHT TO BE HEARD AT THE HEARING CANNOT BE EXERCISED BY THE ASSESSEE. COMMISSIONER (APPEALS) IS DUTY BOUND TO PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. VALID SERVICE OF NOTICE OF HEARING IS PART OF THAT DUTY. ON CUMULATIVE CONSIDERATION OF THESE FACTS AND CIRCUMSTANCES, AND THE LEGAL POSITION, THE PRESUMPTION OF LD. CIT( A), THAT THE ASSESSEE DID NOT WISH TO PURSUE THE APPEAL, STANDS DEMOLISHED AND THE IMPUGN ED ORDER OF LD. CIT(A) BASED ON THIS PRESUMPTION HAS NO LEGS TO STAND. IN ANY CASE , WHEN THE REQUIREMENT U/S 250(1) AND (2) OF I.T. ACT ARE NOT COMPLIED WITH AT THE END OF LD. CIT(A), THE APPELLATE ORDER PASSED U/S 250(6) OF I.T. ACT BY LD . CIT(A) SUFFERS FROM INFIRMITY AND CANNOT BE UPHELD. FOR THE REMOVAL OF THIS INFIRMITY, THE ORDER PASSED BY LD. CIT(A) NEEDS TO BE SET ASIDE FOR FRES H ORDER AT HIS END. (4.2) IN VIEW OF THE FOREGOING PARAGRAPHS (3.1), (4 ), (4.1) AND (4.1.1) OF THIS ORDER, WE HOLD THAT THE LD. CIT(A) ERRED IN DISMISSING THE AP PEAL OF THE ASSESSEE IN LIMINE FOR NON-PROSECUTION OF APPEAL BY ASSESSEE. WE SET ASID E THE IMPUGNED ORDER OF THE LD. CIT(A) AND WE DIRECT THE LD. CIT(A) TO PASS DENOVO ORDER AS PER LAW, IN ACCORDANCE WITH SECTIONS 250 AND 251 OF I.T. ACT; FOR FRESH DI SPOSAL OF APPEAL FILED BY THE ASSESSEE ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 11 OF 12 BEFORE LD. CIT(A) AGAINST THE AFORESAID ASSESSMENT ORDER DATED 17.03.2016. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/10/2018 SD/- SD/- (H.S. SIDHU) (ANADEE NATH MISSHRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16.10.2018 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.-1912/DEL/2018. HV METAL ARC PVT. LTD. PAGE 12 OF 12 DATE OF DICTATION 10/10/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12/10/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 12 /10/2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 12 /10/2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 16/12/2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 16/10/18 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER