CIT Appeal has no power u/s 250 of Income Tax Act to dismiss Appeal on account of non prosecution without discussing Merit of Case: ITAT [Read Order]

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has held that CIT Appeal has no power under section 250 of the Income Tax Act, 1961 to dismiss an appeal on account of non-prosecution without discussing the merit of the case.

Shri Hemanshu Shah appeared for the petitioner and Shri Sanjay Jain appeared for the respondent.

Babubhai Ramanbhai Patel, the assessee filed return of income on 31.07.2012, declaring total income of Rs.1,20,000/-. Notice under Section 148 of the act. Act was issued on 28.03.2019. Assessment Order under Section 144 r.w.s. 147 of the Act was passed on 17.09.2019, in which the Assessing Officer disallowed short-term capital losses of Rs.3,25,511/- on the ground that the assessee was engaged in accommodation entries / bogus capital gains / losses, and Assessing Officer was of the view that the assessee had traded in a script, namely, Prerna Infrabuild Limited, which was a bogus company and did not exist at its address. Accordingly, the Assessing Officer was of the view that the assessee had incurred bogus short-term capital losses amount amounting to Rs.3,25,511/- which were required to be disallowed.

On appeal, the CIT(A) observed that the assessee had sought adornment on two occasions and accordingly, he passed an exparte order, upholding the order of the Assessing Officer.

The assessee is in appeal before us against the aforesaid order passed by CIT(A). Before us, the counsel for the assessee submitted that the CIT(A) had afforded three dates of hearing to the assessee, out of which two dates were falling in the Covid period and accordingly, the assessee could not cause appearance. Further, with respect to the third date of hearing, the assessee had sought adjournment, but the request of the assessee was denied by CIT(A), who proceeded to pass an ex-parte order, without giving a fair opportunity of hearing to the assessee.

Further, it was submitted before us that on two dates of hearing given by CIT, the assessee had sought an adjournment, which was not considered by CIT(A). It was further submitted that while passing the order, CIT(A) did not consider the facts of the case, the issues under consideration and nor did he discuss the individual Grounds of Appeal raised by the assessee nor the judicial precedents on the subject. The CIT(A) simply upheld the order passed by the Assessing Officer, without any discussion of the case on merits.

A two member bench comprising Smt Annapurna Gupta, Accountant Member & Shri Siddhartha Nautiyal, Judicial Member restored the matter to the file of CIT(A) for de Novo consideration. 

Assessing Officer nor CIT(A), the assessee is directly to promptly comply with all notices of hearing and in case of any further default on the part of the assessee to cause appearance, CIT(A) would be at liberty to pass orders based on materials available on record, under law. The appeals of the assessee are allowed for statistical purposes. 

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates