CIT(A) can not dismiss appeal in limine by merely stating the assessment order passed by AO is upheld and that I donot want to interfere with the assessment order
In a recent judgment, the ITAT Agra observed that CIT(A) was not justified in dismissing appeal in limine without adjudicating issues on merits by merely stating the assessment order passed by AO is upheld and that I do not want to interfere with the assessment order and that the assessee has not submitted details/documents.
ABCAUS Case Law Citation:
4351 (2024) (12) abcaus.in ITAT Agra
In the instant case, the assessee had challenged the order passed by the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre in dismissing the appeal of the assessee in limine and not interfering with the assessment order making addition towards unexplained money under section 69A of the Income Tax Act, 1961 (the Act).
The assessee had deposited large amount of cash in her savings bank account in demonetized currency during demonetized period. The case of the assessee was selected for framing limited scrutiny through CASS for the reasons of cash deposits during the demonetization period as per SFT reporting.
The assessee explained that the cash deposited was available with her and was given as an advance for purchase of land and the source of cash was from her own earnings as well as gifts received in marriage from relatives and others. The assessee also filed Wealth Tax Return prior to demonetization period.
The Assessing Officer rejected the contention of the assessee, as on examination and verification, it was found that the assessee did not attach any documents except e-filing receipt of Wealth Tax to substantiate his claim. No evidence of advance given for purchase of land, own earnings and gifts received was attached in support of the claim.
The Assessing Officer further observed that Wealth Tax Act was already abolished and the details of the assets are now required to be filed in the Income-tax Return for the assessment year.
Considering marriage gifts received in cash and considering assessee’s earlier earnings as per ITRs and cash balance declared in immediately preceding Assessment Year, the AO granted relief of Rs.1,00,000/- as maximum savings in specified bank notes and made additions for the rest of the deposits made by the assessee in demonetized currency in SBN during the demonetization period by treating the same as unexplained money u/s. 69A of the Act, which was added by the AO to the income of the assessee, and taxed by the AO in the hands of the assessee u/s. 115BBE of the Act.
Before the Tribunal, the assessee submitted that the CIT(Appeals) had passed an ex-parte order, which was not in compliance with the provisions of section 250(6) of the Act, as the appeal had not been decided on merits by passing a speaking and reasoned order.
It was submitted that the due to chronic liver disease suffered by the Counsel for the assessee, response could not be submitted before CIT(A). It was prayed that the matter can be set aside back to the file of CIT(Appeals) for de novo adjudication.
The Tribunal observed that the CIT(Appeals) had simply dismissed the appeal of the assessee ex parte in limine without deciding the issues arising in appeal on merits. The CIT(A) had upheld the assessment order by holding that he does not want to interfere with the assessment order. There was no independent application of mind by CIT(A) and the appellate order passed was not a speaking and reasoned order.
The Tribunal further observed that the CIT(A) had not even dealt with the contentions of the assessee that cash deposited in the bank account were from earnings, gifts during marriage and from advance from land. There was no enquiry conducted by CIT(A), and even assessment records were not called by CIT(A) to verify the contentions/evidences submitted by the assessee during the course of assessment proceedings.
The Tribunal further observed that he CIT(A) has vast powers under the Act, which even include power of enhancement. The CIT(A) is required and obligated to pass order in compliance with the provisions of section 250(6) where he has to state point for determination, his decision and reasoning thereof, as CIT(A) is required to pass reasoned and speaking order on merits in accordance with law with independent application of mind on material on record as well collected by him during appellate proceedings.
The Tribunal further observed that the appellate order passed by CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issues are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of CIT(A) in deciding the issues.
The Tribunal opined that merely stating the assessment order passed by AO is upheld and that I donot want to interfere with the assessment order was not sufficient, and that the assessee had not submitted details/documents is not sufficient. The CIT(A) has to make independent enquiries, which were not done, not even assessment records were called for by the CIT(A). The CIT(A) is not toothless as his powers are co-terminus with the powers of the AO., which even includes power of enhancement.
The Tribunal opined that the appellate order of the CIT(A) was clearly in violation of section 250(6) of the Act and liable to be set aside.
Accordingly, the appellate order of CIT(A) was set aside and the matter was restored back to the file of CIT(A) for fresh adjudication.
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