Anuj Gupta vs JCIT Special Range-17: Dismissal for Non-Prosecution in AY 2015-16 Appeal

Case Overview: Anuj Gupta vs JCIT Special Range-17

Case Number: ITA 6215/DEL/2019

Appellant: Anuj Gupta, New Delhi

Respondent: JCIT, Special Range-17, New Delhi

Assessment Year: 2015-16

Case Filed On: 2019-07-22

Order Type: Final Tribunal Order

Date of Order: 2020-06-09

Pronounced On: 2020-06-09

Introduction

The case of Anuj Gupta vs JCIT Special Range-17 revolves around the dismissal of an appeal filed by the appellant, Anuj Gupta, for non-prosecution concerning the assessment year 2015-16. The appellant challenged the Joint Commissioner of Income Tax’s (JCIT) assessment, which had resulted in an upward revision of his income. The appeal was dismissed by the Commissioner of Income Tax (Appeals) [CIT(A)] due to the appellant’s repeated failure to appear for hearings.

Background

Anuj Gupta, a resident of New Delhi, filed his income tax return for the assessment year 2015-16, declaring an income of Rs. 31,92,700. However, the JCIT, Special Range-17, New Delhi, revised the assessment, increasing the total income to Rs. 47,13,570. The increase was primarily due to disallowances of interest expenditures and other adjustments made by the Assessing Officer (AO) under Sections 143(3) and 40A(3) of the Income Tax Act, 1961.

The appellant subsequently filed an appeal before the CIT(A), challenging the JCIT’s assessment order. However, due to the appellant’s failure to respond to multiple hearing notices, the CIT(A) dismissed the appeal for non-prosecution. The dismissal was based on the appellant’s repeated non-appearance, which was interpreted as a lack of interest in pursuing the appeal.

Grounds of Appeal

Anuj Gupta raised seven grounds of appeal against the CIT(A)’s order, which are summarized as follows:

• The CIT(A) erred in upholding the assessment order, which increased the income to Rs. 47,13,570 from the declared Rs. 31,92,700.
• The CIT(A) dismissed the appeal without granting a fair and proper opportunity of being heard, which was neither intentional nor deliberate on the appellant’s part.
• The CIT(A) failed to appreciate that the non-appearance was not due to a lack of interest but due to unavoidable circumstances.
• The disallowance of Rs. 10,19,555 as interest expenditure was erroneous and arbitrary.
• The addition of Rs. 4,21,718 as interest expenditure was also arbitrary and lacked a valid basis.
• The disallowance of Rs. 49,600 under Section 40A(3) was unjustified.
• The CIT(A) erred in upholding the levy of interest under Sections 234B and 234C of the Income Tax Act.

Proceedings Before the CIT(A)

The CIT(A) issued five notices to the appellant, none of which were complied with. The appellant’s non-appearance and failure to submit necessary documents led to the dismissal of the appeal for non-prosecution. The CIT(A) interpreted the appellant’s conduct as a lack of interest in pursuing the appeal, resulting in the dismissal without considering the merits of the case.

The appellant, represented by Shri Gautam Jain, Advocate, argued that the CIT(A) did not grant a fair opportunity to present the case. The appellant claimed that an adjournment petition was filed on May 28, 2019, but the CIT(A) passed the dismissal order on May 29, 2019, before the appellant could make a submission on May 31, 2019, as intended. The appellant asserted that this action deprived him of a fair hearing.

Tribunal’s Analysis

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, consisting of Judicial Member Shri Sudhanshu Srivastava and Accountant Member Shri Prashant Maharishi, reviewed the facts and circumstances of the case. The tribunal noted that the appellant failed to respond to multiple notices issued by the CIT(A), and the conduct of the appellant was indeed deplorable.

The tribunal highlighted that the appellant did not provide a satisfactory explanation for the repeated non-appearance and lack of response to the statutory notices. The tribunal expressed concern over the appellant’s negligent behavior, which caused unnecessary delays and wasted the resources of the tax authorities.

Tribunal’s Decision

While the tribunal acknowledged the appellant’s gross negligence, it also noted that the CIT(A) had dismissed the appeal without addressing the merits of the case. The tribunal emphasized that the CIT(A)’s order should have included a reasoned decision on the issues raised by the appellant, as required under Section 250(6) of the Income Tax Act.

The tribunal observed that the CIT(A) relied on the decision in the case of Multiplan India Ltd. [38 ITD 320] to dismiss the appeal for non-prosecution. However, the tribunal clarified that the CIT(A) should have provided a detailed order discussing the points raised in the appeal, even if the appellant failed to appear.

Given these circumstances, the tribunal set aside the CIT(A)’s order and remanded the case back to the CIT(A) for a fresh hearing. The tribunal directed the appellant to deposit Rs. 5,000 as a contribution to the Prime Minister’s National Relief Fund (PMNRF) by June 30, 2020, as a consequence of the negligent conduct displayed during the proceedings. The tribunal instructed the appellant to appear before the CIT(A) on July 6, 2020, with all necessary documents and proof of the deposit.

Conclusion

The Income Tax Appellate Tribunal’s decision in the case of Anuj Gupta vs JCIT Special Range-17 underscores the importance of adhering to statutory notices and the need for proper conduct during tax proceedings. While the tribunal recognized the appellant’s negligence, it also upheld the principle that appeals should be decided on their merits, with a detailed explanation of the issues involved.

The tribunal’s directive to remand the case for a fresh hearing provides the appellant with an opportunity to present his case, while also emphasizing the consequences of failing to engage responsibly in the legal process. This case serves as a reminder of the importance of timely and effective communication with tax authorities during appeals.

Final Tribunal Order

The final order, pronounced on June 9, 2020, by Judicial Member Shri Sudhanshu Srivastava and Accountant Member Shri Prashant Maharishi, allowed the appeal for statistical purposes and remanded the case to the CIT(A) for a decision on the merits.

Order Pronounced in the Open Court on 09/06/2020.

Judicial Member: Sudhanshu Srivastava

Accountant Member: Prashant Maharishi

Anuj Gupta vs JCIT Special Range-17: Dismissal for Non-Prosecution in AY 2015-16 Appeal