CIT(A) Can’t Dismiss Appeal for Non-Prosecution Without Applying Mind to Issues Raised in Appeal | ITAT

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Non-Prosecution Dismissal

Case Details: Vijay Krishna Bhandari vs. Income-tax Officer - [2025] 171 taxmann.com 102 (Raipur-Trib.)

Judiciary and Counsel Details

  • Ravish Sood, Judicial Member & Arun Khodpia, Accountant Member
  • Sunil Kumar Agrawal, CA for the Appellant.
  • Dr. Priyanka Patel, Sr. DR for the Respondent.

Facts of the Case

Assessing Officer (AO) initiated reassessment under section 147 after noting that the assessee sold property for Rs. 73.65 lakh but didn’t file a return. Investigation revealed the sale deed mentioned Rs. 19.06 lakh, while the market value (stamp duty) was Rs. 73.65 lakh.

With no explanation for the Rs. 54.59 lakh discrepancy, the entire Rs. 73.65 lakh was treated as unexplained capital gains under section 45. An order under section 147 read with section 144, dated 26-03-2022, determined the assessee’s income at Rs. 73.65 lakh.

The Commissioner (Appeals) dismissed the case for non-prosecution due to the assessee’s absence. The assessee appealed before the Tribunal, challenging both the dismissal and the addition made by the AO.

ITAT Held

The Tribunal held that the assessee’s failure to appear before the lower authorities was unwarranted. While the Commissioner (Appeals) was correct that appeal cannot be delayed due to non-prosecution, dismissing it without examining the merits was improper.

The assessee had contested the addition under section 45, claiming the Assessing Officer erred in treating the entire sale consideration as undisclosed capital gains. The Commissioner (Appeals) should have addressed these arguments instead of dismissing the appeal outright.

As per section 251(1)(a) and (b) and the Explanation to section 251(2), the Commissioner (Appeals) is obligated to review all relevant issues. He does not have the power to reject an appeal solely for non-prosecution. Therefore, the dismissal is set aside, and the Commissioner (Appeals) is directed to decide the case on its merits.

List of Cases Referred to

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