2024 (11) TMI 635 - AT - Income Tax

Appeal restored after dismissal without reasonable opportunity to present case on merits

Mayursinh Jayandrasinh Jadeja Versus Income Tax Officer, Ward-1 (2) (3), Ahmedabad

ITAT Ahmedabad allowed assessee's appeal against CIT(A)'s dismissal without reasonable opportunity to present case on merits. The tribunal held that ... CIT(A) dismissal of appeal without giving a reasonable opportunity to the assessee to present it’s case on merits - HELD THAT:- CIT(A) erred in facts and in law in not giving opportunity to the assessee to cure the defect, if any, in the filing of appeal form and dismissing the appeal of the assessee in limine, against the principles of natural justice. Accordingly, the appeal of the assessee is restored to the file of CIT(A) for de-novo consideration, after giving an opportunity to the assessee to cure defects in filing of appeal, if any, and thereafter, decide the appeal of the assessee on merits, in accordance with law. Issues:1. Dismissal of appeal by Ld. CIT(A) in limine without considering merits.2. Jurisdictional issues related to notice under section 148 and 143(2) of the Act.3. Addition of unexplained investment and cash credits.4. Procedural irregularities in filing the appeal.Analysis:Issue 1: Dismissal of appeal in limineThe appeal was filed by the Assessee against the order of the Ld. CIT(A) dismissing the appeal in limine without considering the merits. The Assessee contended that the dismissal was unjust as the appeal was filed manually due to the option to file a paper appeal for the relevant assessment year. However, Ld. CIT(A) held that electronic filing was mandatory as per CBDT Rules, and the manual filing was defective. The Tribunal, citing precedents, found the dismissal unjustifiable and against the principles of natural justice. The appeal was restored to Ld. CIT(A) for de novo consideration after allowing the Assessee to rectify any filing defects.Issue 2: Jurisdictional issuesThe Assessee raised jurisdictional issues regarding the notice under section 148 not being served and the absence of a valid notice under section 143(2) of the Act. The AO had made additions of unexplained investment and cash credits during assessment. The Assessee argued that these additions should be deleted due to procedural irregularities. However, Ld. CIT(A) did not address these substantive grounds due to the procedural dismissal of the appeal. The Tribunal's decision to allow the appeal for statistical purposes implies that these jurisdictional issues need to be considered on merit.Issue 3: Addition of unexplained investment and cash creditsThe AO had made additions of Rs. 48,35,282/- as unexplained investment and Rs. 11,50,736/- as unexplained cash credits. The Assessee disputed these additions, claiming the investment was related to losses in share transactions and the cash credits were legitimate. These contentions were not addressed on merits by Ld. CIT(A) due to the procedural dismissal. The Tribunal's decision to restore the appeal indicates that these additions require further examination.Issue 4: Procedural irregularitiesThe Assessee faced procedural challenges in filing the appeal manually, leading to its dismissal by Ld. CIT(A). Despite the Assessee's arguments for the validity of manual filing, Ld. CIT(A) upheld the dismissal based on CBDT Rules mandating electronic filing. The Tribunal found this approach erroneous and ordered the appeal to be reconsidered after rectifying any filing defects, emphasizing the importance of adhering to principles of natural justice.In conclusion, the Tribunal's decision to restore the appeal for de novo consideration highlights the significance of addressing both procedural and substantive issues in tax assessments, ensuring fair treatment and adherence to legal requirements.