TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1132
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....,41,000/- claimed for the year. 4. Briefly stated, facts of the case are that the original assessment order passed in this case by the AO on 19.12.2011 against the return of income filed by the assessee on 24.09.2009 declaring total income of Rs.1,15,94,328/-. The AO in the original assessment noted that the assessee claimed provision for leave encashment and provision for gratuity which has been considered by him as disallowable u/s. 43B following the decision of Hon'ble Calcutta High Court in the case of Exide Industries Ltd. Vs. Union of India (2007) 292 ITR 470 (Cal). Thereafter, the AO also noted from the accounts that various expenses in the nature of brokerage & commission, travelling, electricity charges, property development expenses, printing & stationery, gifts, communication expenses, legal & professional charges, service & maintenance charges, security charges, MYSAP Implementation charges, consultancy charges, miscellaneous expenses etc. which have been debited to the P&L Account and claimed as revenue expenditure which have been dealt with by the AO separately and allowed some of the expenses fully and some of the expenses partly except dealing with the Security Exp....
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....hat the decision of the Hon'ble ITAT is awaited. This explanation of the assessee was found untenable by the AO who proceeded to make disallowance as made in the earlier year @ 75% of Rs.73,41,000/- amounting to Rs.55,05,750/-. He also submitted that the Ld. CIT(A) dismissed the appeal of the assessee merely on non-prosecution, even though the order of the coordinate bench of ITAT, Kolkata was available. Ld. Counsel also referred to the provisions of section 250 of the Act which contains 'Procedure in Appeal' to be followed by the ld. CIT(A) while disposing of the appeal. 9. Per contra, the Ld. DR heavily relied on the order of the Ld. CIT(A) and urged before the bench not to interfere with the order of the Ld. CIT(A) and the same may be confirmed as assessee failed to attend the hearings despite several opportunities given by the authority. 10. We have heard rival submissions and gone through the facts and circumstances of the case. We find that the appeal of the assessee is against the action of Ld. CIT(A) in confirming the ad-hoc disallowance of a sum of Rs.55,05,750/- being 75% of the Security Expenses of Rs.73,41,000/- claimed for the year. The Ld. CIT(A) dismissed the appea....
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....ore disposing the appeal, Ld. CIT(A) may make such inquiry as he thinks fit or direct the AO to make further inquiry and report the result of the same to Ld. CIT(A). Further, sub-section (6) requires that disposal of appeal shall be in writing and shall state the points for determination to arrive at a decision thereon and most importantly the reasons for the decision. The fact of appeal by department in assessee's own case on the same issue pending before the ITAT is on record as noted by the AO in his order which ought to have been inquired upon by the Ld. CIT(A). Principles governing the exercise of powers by the First Appellate Authority are contemplated under sections 250 and 251 of the Act, breach of which has far reaching consequences on the administration of justice culminating in the litigant approaching the higher appellate authority. It is required that the first appellate authority viz. CIT(A) will appreciate the evidence, consider the arguments and apply the law on the given set of facts and circumstances and arrive at findings. 13. The Ld. CIT(A) ought to have disposed of the appeal of the assessee by a speaking order after affording reasonable opportunity of being h....
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....ised before the Commissioner (Appeals) by the appellant.' 8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246....
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....ting the points of determination in the appeal, the decision thereon and the reason for the decision. It is well-settled that powers of Ld. CIT(A) are co-terminus with powers of the Assessing Officer. Useful reference may be made to order of Apex Court decision in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 in which it was held that AAC has plenary powers in disposing off an appeal; that the scope of his power is co-terminus with that of the ITO, that he can do what the ITO can do and also direct him to do what he failed to do. In this context, useful reference may also be made to Apex Court's decisions in the cases of CIT v. Rai Bahadur Hardutroy Motilal Chamaria [1967] 66 ITR 443 and CIT v. B.N. Bhattachargee [1979] 118 ITR 461 for the proposition that an assessee having once filed an appeal, cannot withdraw it and even if the assessee refuses to appear at the hearing, the first appellate authority can proceed with the enquiry and if he finds that there has been an under-assessment, he can enhance the assessment. Just as, once the assessment proceedings are set in motion, it is not open to the Assessing Officer to not complete the Assessment Proceedings by allowing the Ass....
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....ection 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of nonprosecution of the appeal by the assessee. This is amply clear from the Section....