Mere Dismissal Of Appeal For Want Of Prosecution Is Not In Accordance With Mandate Of Sec 250(6): Kolkata ITAT
Pankaj Bajpai
17 March 2024 11:30 AM GMT
Since the AO as well as the CIT(A) has not examined the issue with the angle of section 69, rather they took the conditions of section 68 where unexplained cash credit is required to be explained by the assessee and applied on the issue of investment, the Kolkata ITAT remanded the matter for re-adjudication.Finding that the CIT(A) has merely followed the decision of the ITAT, whereby appeals...
Since the AO as well as the CIT(A) has not examined the issue with the angle of section 69, rather they took the conditions of section 68 where unexplained cash credit is required to be explained by the assessee and applied on the issue of investment, the Kolkata ITAT remanded the matter for re-adjudication.
Finding that the CIT(A) has merely followed the decision of the ITAT, whereby appeals were dismissed for want of Prosecution, the Bench of Rajpal Yadav (Vice President) and Manish Board (Accountant Member) observed that “this procedure of disposal of appeal is not in accordance with the mandate given under subsection (6) of section 250”. (Para 7)
As per the brief facts of the case, the return was filed declaring 'NIL' income and the case was selected for scrutiny assessment. The AO observed on perusal of accounts that there is a substantiate increase of Rs.47,00,000/- and Rs.25,00,000/- under the head “Current Investments” in unlisted equities and investment in preference shares respectively. The AO further recorded a finding that the assessee failed to substantiate the source of such investments and, therefore, these investments are to be treated as unexplained cash credit, though he made addition under section 69 instead of section 68. The 1st Appellate Authority has dismissed the appeal for want of prosecution.
The Bench observed that sub-section (6) of section 250 contemplates that 1st Appellate Authority would state the points in dispute and thereafter record reasons on such points.
In the present case, the Bench found that the CIT(Appeals) has reproduced the assessment order and thereafter observed that he has issued number of notices to the assessee, which remained un-complied with and thus it be concluded that assessee failed to substantiate the appeal with any new material.
Since an irregularity crept in the proceeding of the CIT(Appeals), the ITAT set aside the issue to the file of Assessing Officer for re-examination and re-adjudication.
Counsel for Appellant/ Assessee: Miraj D. Shah
Counsel for Respondent/ Revenue: P.P Barman
Case Title: Aryavrat Vintrade Pvt Ltd verses ITO
Case Number: I.T.A. No. 1261/KOL/2023
