Facts of the Case

The assessee was subjected to reassessment proceedings under Sections 147/148, resulting in determination of income at ₹21,59,640. The Assessing Officer made an addition of ₹20,10,000 on the allegation that the assessee had paid “on-money” or donation for admission of his son to a medical college.

The CIT(A) issued multiple notices during appellate proceedings, but due to non-appearance and absence of submissions from the assessee, dismissed the appeal ex-parte and upheld the assessment order.

The assessee challenged the ex-parte dismissal before the Tribunal.

Issues Involved

  1. Whether reassessment proceedings under Sections 147/148 were valid.
  2. Whether addition for alleged on-money payment without supporting evidence was justified.
  3. Whether CIT(A) could dismiss the appeal for non-appearance without deciding issues on merits.

Petitioner’s Arguments (Assessee)

  • No donation or on-money payment was made for admission.
  • The addition was based merely on suspicion without verification from the institution.
  • No material evidence existed to support the allegation.
  • The reassessment notice was issued without valid reasons.
  • The appeal was dismissed ex-parte without proper opportunity.

Respondent’s Arguments (Revenue)

  • The assessee failed to appear or file submissions despite several notices.
  • Therefore, the appellate authority proceeded to decide the appeal in absence of the assessee.
  • The assessment order was confirmed based on available records.

Court Order / Findings (ITAT Allahabad)

The Tribunal observed that the CIT(A) dismissed the appeal solely due to absence of the assessee without examining the merits of the grounds raised. Such dismissal in limine was not in accordance with the statutory provisions governing appellate proceedings.

It held that the appellate authority is required to adjudicate issues on merits even in absence of the appellant. Failure to do so rendered the order a non-speaking order contrary to Sections 250 and 251.

  • Set aside the impugned order of the CIT(A)
  • Remanded the matter for fresh adjudication on merits
  • Directed that proper opportunity of hearing be granted to the assessee
  • Declared other grounds as infructuous due to remand
  • Allowed the appeal for statistical purposes

Important Clarification

  • CIT(A) cannot dismiss an appeal merely for non-appearance of the appellant.
  • Appeals must be decided on merits in accordance with law.
  • Additions based on suspicion without evidence require proper examination.
  • Reassessment validity must also be adjudicated on legal grounds.
  • The assessee is required to cooperate in remand proceedings.

Link to download the order -  https://itat.gov.in/public/files/upload/1674554765-Kuldeep%20Darbari.pdf

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