SHRI ANKUSH SHARMA, KATHUA V. INCOME TAX OFFICER W2ARD-6, KATHUA

ITA 93/ASR/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2721 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-04-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 26-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVINDER PAL SINGH
• Section: 144; 250; 251; 69A; 246A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 Sh. Ankush Sharma S/o Sh. Dharam Chand, Raipur, Mahanpur, Kathua J& K. [PAN:-DYIPS7343H] (Appellant) Vs. ITO-Ward- 6, Kathua, J & K. (Respondent) Appellant by Sh. P. N. Arora, Adv. Respondent by Sh. Davinder Pal Singh, Sr. DR Date of Hearing 17.04.2024 Date of Pronouncement 30.04.2024 ORDER Per: Udayan Dasgupta, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), NFAC, Delhi,[in brevity the ‘CIT (A)’], The appeal transferred to Addl./JCIT(A)-2, Jaipur order dated 11.01.2024 passed u/s 250 of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y. 2017-18. The impugned order was emanated from the order of the ld. Income Tax Officer, Ward- Kathua, [in brevity ‘the AO’] order passed u/s 144 of the Act. I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 2 2. The assessee has taken the following grounds: - “1 That the order of the Assessing Officer as well as the order of Learned CIT(A) are both against the facts of the case and are untenable under the law 2 That the worthy CIT(A) has not appreciated the facts of the case and merely relied on order of the AO and without applying his mind and without any rhyme & reason, the Ld. CIT(A) has confirmed the addition of Rs. 12,46,856/- made by the AO. As such the order of Ld C1T(A) is liable to be cancelled and the addition made may be deleted 3 That the Ld. CIT(A) has grossly erred in confirming the addition vide CIT(A)’s order dated 11/01/2024 on the basis of the fact that the notice dated 26/12/2023 for hearing the case was fixed on 03/01/2024. The CIT(A) did not appreciate that the assessee has duly applied for adjournment on 02/01/2024 and this fact has not been considered in the order of the worthy CIT(A). The necessary proof is enclosed herewith which will speak for itself and the same is part & parcel of grounds of appeal. As such the CIT(A) was not justified in confirming the case ex-parte u/s 144. As such there was no reason and occasion for the CIT(A) thereby confirming the addition made by AO. The order of the CIT(A) is bad in the eyes of law and the same is liable to be cancelled. 4 That the CIT(A) did not appreciate that the notices were not served on the assessee. As such there was no reason and occasion for the AO to complete the assessment u/s 144 and I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 3 thereby determining the income at Rs. 12,46,856/- thereby making the addition of Rs.5,32,356/- on account of income under the head business and profession (calculated on the basis of total credits in the bank). The AO made further addition of Rs.7,14,500/- on account of so-called unexplained money from unexplained sources u/s 69A of the IT Act, 1961. Similarly the CIT(A) has grossly erred in confirming the same without applying his mind and without affording a reasonable opportunity of being heard before confirming the order of the AO and has not considered the request for adjournment made by the assessee on 02/01/2024 for which the necessary proof has been filed. As such the order of the CIT(A) is bad in the eyes of law and the same is liable to be cancelled. 5. That the Ld. CIT(A) has even not considered the case on merits. As such the order of the CIT(A) is bad in the eyes of law and the same is liable to be cancelled as the same suffers from many inherent defects. 6. That any other ground of appeal which may be argued at the time of hearing of the appeal.” 3. Brief fact of the case is that the main grievance of the assessee is that the ld. CIT(A) has passed ex parte order and has dismissed the appeal of the assessee for non-appearance instead of deciding the issue on merits. That non-compliance was made by the assessee during assessment proceeding also. As a result, the I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 4 assessment was framed U/s 144, ex parte. Aggrieved assessee filed an appeal before the ld. CIT(A) by challenging the order of the ld. AO. The ld. CIT(A) upheld the order of the ld. AO and passed the order ex parte. Aggrieved the assessee filed an appeal before us. 4. The contention of the ld. AR before the Bench is that ‘no notice’ of hearing has been received by the assessee in the E-mail ID as stated in Memorandum of Appeal in Form No. 35 at Sl. No. 17. 5. On the other hand, it is seen from the order of the appellate authority in page no. 4 para 6 that the notices were issued on E-mail available in the Module of Income Tax Deptt. Considering the submission and the factual aspect of the matter it seems that there has been a confusion regarding the service of notice of hearing. 6. In contention, the ld. DR could not explain, on which particular mail ID, the notice has been sent. The ld. DR further could not ascertain whether the notice of hearing has been served upon the assessee or not. 7. On this issue, the ld. AR further draw our attention to the judgment of Hon’ble Jurisdictional High Court in the case of MUNJAL BCU CENTRE OF INNOVATION AND ENTREPRENEURSHIP, LUDHIANA, V/s. COMMISSIONER OF INCOME TAX EXEMPTIONS, CHANDIGARH date of order 04.03.2024 CWP No. 21028 of 2023 (O & M) Punjab & Haryana High Court where the Hon’ble Jurisdictional High Court held that the service of notice should I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 5 be as per section 282 of the IT Act 1961. 7.1 The ld. AR submitted that both the assessment and appeal orders are passed ex parte. The ld. AR prayed to remand back the matter to the file of the ld. AO for de novo assessment. 8. We have heard the rival submission and considered the documents available on record. It is also seen that the first appellate authority has not decided the issue on merits on the grounds contained in Form 35, and dismissed the appeal of the assessee ex parte. 9. At this stage, we would like to reproduce the Section 250(4) and 250(6) of the Act: “(4) The Commissioner (Appeals) may, before disposing 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 Commissioner(Appeals).” “(6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state points for determination the decision thereon and the reason for the decision.” 10. A perusal of the language of the above provisions shows that it is incumbent on the Ld. CIT(A) to make necessary enquiry before passing the order. Further, Ld. CIT(A) is obliged to decide each of the points arising out of the appeal i.e. grounds on merits have to be discussed even in an ex parte order. In view of Section 250(4) I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 6 and 250(6) of the Act, Ld. CIT(A) has no power to dismiss an appeal on account of non-prosecution, without discussing the merits of the case. In the case of CIT v. Premkumar Arjunda (2107) 297 CTR 614 (Bombay), the Bombay High Court made the following observations: “8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report 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 the 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 provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance 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 I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 7 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 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.” 10.1 In our considered view the reasonable opportunity was denied to the assessee for submission of his evidence and the appeal has not been decided on merits. Respectfully following the judgment of Hon’ble Jurisdictional High Court in the case of Munjal BCU Centre and Entt, (supra), we remit the matter back to the CIT(A), with the opinion that notice of hearing has not been properly served in the email id specifically provided in the memorandum of appeal. Moreover, the appeal has also not been decided on merits, as is the requirement of law u/s 250(4) and 250(6) of the Act 1961, as observed by the Hon’ble Bombay High court in the case of CIT vs Pre Kumar Arjunda (2017) (supra). I.T.A. No.93/Asr/2024 Assessment Year: 2017-18 8 Therefore, in the interest of justice, we remit the matter back to CIT(A) to consider the matter afresh after affording proper and reasonable opportunity of hearing to the appellant and to decide on all the issues contained in the memorandum of appeal on merits. 10.2 We have not expressed any views on the merits of the case. 11. In the result, the appeal of the assessee bearing ITA No. 93/Asr/2024 is allowed for statistical purposes. Order pronounced in the open court on 30.04.2024 Sd/- Sd/- (Dr. M. L. Meena) (UDAYAN DASGUPTA) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order