CIT(A) can not dismiss appeal in limine for non filing of written submissions by assessee
In a recent judgment, the Agra ITAT has held that CIT(A) can not dismiss appeal in limine for not filing written submissions without deciding the issues on merits as per law in terms of section 250(6) of the Income Tax Act, 1961 (the Act).
ABCAUS Case Law Citation:
ABCAUS 4024 (2024) (05) ITAT
Important Case Laws relied upon:
CIT vs B.N. Bhattacharya (1977) 118 ITR 461 (SC)
Shahbad Cooperative Sugar Mills Ltd., 38 taxman.com 204 (P&H
In the instant case, the assessee had filed appeal before the ITAT for two Assessment Years challenging the ex-parte order passed by the CIT(A), National Faceless Appeal Centre (NFAC) in limine for not filing written submissions by the assessee.
In one of the Assessment years, as per Annual Information Report (AIR), the assessee had deposited large amount of cash in his bank account. The case was reopened by the Assessing Officer by issuing notice u/s. 148 of the Act. The assessee did not comply with the said notice. Further notices were issued by the Assessing Officer u/s. 142(1) and 144 and none was responded by the assessee. As a result, addition was made to the returned income of the assessee.
For another assessment year, the case of the assessee was selected for limited scrutiny through Computer Assisted Scrutiny Selection (CASS) on the issue that receipts u/s 194C and 194J as per 26AS are more than the receipts shown in ITR. For this year also, the assessee did not enter appearance before the Assessing Officer despite several notices issued during e-assessment proceedings. The Assessing Officer framed assessment ex parte by applying net profit rate of 8% on the total receipts.
Third appeal was filed by the assessee against the order of penalty passed by the Assessing Officer u/s 271(1)(c) of the Act for one of the abve Assessment Years.
All the three appeals were dismissed by the CIT(Appeals) in limine ex parte without deciding the issues on merits by holding that no written submissions were made by the assessee in response to the notices issued. The Appeal cannot be kept pending for indefinite period without reasonable cause. It is observed that the appellant is not interested in prosecuting the appeal filed by him.
Interestingly, even before the Tribunal no one appeared on behalf of the assessee despite notice issued.
The Tribunal observed that the CIT(Appeals) had dismissed the appeal of the assessee ex parte in limine without deciding the issues on merits as per law in terms of section 250(6) of the Act. The CIT(Appeals) is required to decide the issues on merits arising in appeal in accordance with law, which had not been done in the case and the appeal of the assessee was dismissed in limine ex parte.
Accordingly, the Tribunal set aside the orders of CIT(Appeals) and restored the matter back to the file of CIT(Appeals) to decide the appeal of the assessee afresh on merits in accordance with law after providing opportunities to both the parties.
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