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www.taxpublishers.in Income Tax Act, 1961, Section 251 Order of CIT(A)--*Validity--Appeal dismissed on account of non-prosecution* *Conclusion:* Once an appeal is preferred before CIT(A), it becomes obligatory on his part to dispose of the same on merits and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by assessee. AO made certain additions/disallowances. Assessee carried matter in appeal before CIT(A). Despite being afforded sufficient opportunity, assessee failed to participate in proceedings before CIT(A), therefore, the CIT(A) holding a conviction that assessee was not interested in prosecuting the matter, dismissed the appeal. *Held:* CIT (A) disposed off assessee's appeal for non-prosecution and failed to apply his mind to the issues, which arose from impugned order and assailed by assessee before him. Once an appeal is preferred before CIT(A), it becomes obligatory on his part to dispose of the same on merits and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by assessee. In fact, a perusal of section 251(1)(a) and (b), as well as "Explanation" to section 251(2), revealed that CIT(A) remains under a statutory obligation to apply his mind to all the issues, which arises from impugned order before him. As per mandate of law, CIT (A) is not vested with any power to summarily dismiss the appeal for non-prosecution. Hence, order of CIT(A) was set-aside and matter was remanded with a direction to dispose of the same on merits after affording a reasonable opportunity of being heard to assessee. *Decision:* In assessee's favour *Relied:* Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom) : 2016 TaxPub(DT) 3496 (Bom-HC) IN THE ITAT RAIPUR BENCH RAVISH SOOD, J.M. Pramod Infrastructure (P) Ltd. v. ITO ITA No. 82/RPR/2024 8 April, 2024 Assessee by: Sakshi Gopal Agrawal and Siddharth Parakh, CAs Revenue by: Satya Prakash Sharma, Sr. DR ORDER *Ravish Sood, J.M.* The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 12-1-2024, which in turn arises from the order passed by the assessing officer under section 147 read with section 144 read with section 144B of the Income-tax Act, 1961 (in short 'the Act') dated 19-3-2022 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal: "1. That on fact and circumstances of case of appellant. Learned assessing officer, NFAC has erred for disallowing depreciation at higher rate of 30% on JCB and Tata Hitachi as the appellant was very much eligible for claiming higher depreciation and Commissioner (Appeals), NFAC has erred for confirming the same. 2. That on fact and circumstances of case of appellant. Learned assessing officer, NFAC has erred for disallowing interest of Rs. 14,01,072 on hire charges under section 40(a)(ia) of Income Tax Act on account of non-deduction of TDS as well as Commissioner (Appeals), NFAC has erred for confirming the same. 3. That on the fact and circumstances of the case, learned assessing officer, NFAC and has been erred for making addition/adjustment to book profit under section 115JB which is beyond the scope of addition/adjustment given under section 115JB and Commissioner (Appeals), NFAC has erred for confirming the same. 4. That on the fact and circumstances of the case, the honorable Commissioner (Appeals) has erred for confirming the order of learned assessing officer without properly appreciating the fact of the case. 5. That, assessee reserves the right to add, amend, alter or withdraw any ground/grounds of appeal at the time of hearing." Also the assessee has raised additional grounds of appeal which reads as under: "That your honour, the notice under section 148 of the Income Tax Act, 1961 dated 30-3-2021 for the assessment year 2013-14 issued by ITO, Ward 1(1), Raipur is invalid. The jurisdiction of the appellant company lies with ITO, Bhatapara and not with ITO 1(1), Raipur, who had issued the notice under section 148 without assuming the jurisdiction over the appellant company as there is no evidence of transfer of case of the appellant from ITO, Bhatapara to the ITO 1(1), Raipur as required in terms of section 127 of Income Tax Act 1961. Accordingly, without a valid notice under section 148 the whole proceeding as well as the assessment order under section 147 read with section 144B will become null and void." 2. Succinctly stated, the assessee company which is engaged in the business of executing electrical and civil contracts had filed its return of income for assessment year 2013-14 on 28-9-2013, declaring a loss of Rs. (-) 17,02,395. Subsequently, the case of the assessee company was selected for scrutiny assessment under section 143(2) of the Act. 3. As the assessee company had failed to put up an appearance in the course of the proceedings before the assessing officer, therefore, the latter proceeded with the assessment on an ex-parte basis and after, inter alia, making certain additions/ disallowances, viz. (i) disallowance of the assessee's claim for higher rate of depreciation on JCB and Tata Hitachi vehicles i.e., @30%; (ii) disallowance under section 40(a)(ia) of the Act of the assessee's claim for deduction of interest charges; and (iii) carrying out adjustment to the "book profit" disclosed by the assessee company under section 115JB of the Act of the addition/disallowance made while framing the assessment, vide his order passed under section 147 read with section 144 read with section 144B of the Act dated 19-3-2022 determined its income at Rs. 4,40,470 (under the normal provisions) and further reworked out the "book profit" under section 115JB at Rs. 26,23,092. 4. Aggrieved the assessee company carried the matter in appeal before the Commissioner (Appeals). As the assessee company despite having been afforded sufficient opportunity on two occasions had failed to participate in the proceedings before the Commissioner (Appeals), therefore, the latter holding a conviction that it was not interested in prosecuting the matter dismissed the appeal. 5. The assessee being aggrieved with the order of the Commissioner (Appeals) has carried the matter in appeal. 6. I have heard the learned Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record as well as considered the judicial pronouncements that have been pressed into service by the learned Authorised Representative to drive home his contentions. 7. Shri Sakshi Gopal Aggrawal, learned Authorized Representative (for short 'AR') for the assessee company assailed the addition/disallowance a/w the adjustment to the "book profit" made by the assessing officer, which, thereafter, had been upheld by the Commissioner (Appeals). Apropos the declining by the assessing officer of the assessee's claim for higher depreciation i.e., @ 30% on the JCB/Tata Hitachi vehicles, the learned Authorised Representative submitted that the assessing officer had given two-fold reasons for not accepting the same, viz. (i) that as the subject vehicles were not motor lorries/motor taxies used in the business of running them on hire as provided in Rule 5, Appendix-I (effective from assessment year 2006-07 onwards), thus, they were not eligible for higher rate of depreciation; and (ii) the subject vehicles unlike motor lorries, motor truck could not have been used in the business of running it on hire. Rebutting the aforesaid observations of the assessing officer, the learned Authorised Representative had drawn support from the judgment of the Hon'ble High Court of Kerala in the case of CIT v. Gaylord Constructions, ITA No. 1255 of 2009, dt. 19-8-2009 : 2010 TaxPub(DT) 0718 (Ker-HC), wherein it was held that JCB is entitled to higher rate of depreciation. 8. Apropos the disallowance under section 40(a)(ia) of the Act of the assessee's claim for deduction of interest charges of Rs. 14,01,072, the learned Authorised Representative submitted that the same was comprised of interest on hire charges paid to HDFC bank Ltd : Rs. 6,01,178.40 and interest paid to NBFCs : Rs. 8,95,534.73. Elaborating on his contention, the learned Authorised Representative submitted that the interest charges paid to nationalized banks were not liable for deduction of tax at source as per the mandate of Section 194A(3)(a) of the Act. The learned Authorised Representative in support of his aforesaid contention had taken me through the bifurcated details of interest paid/tax deducted at source, Page 33 of APB. As regards the balance amount of interest charges of Rs. 8,95,534, the learned Authorised Representative submitted that tax at source of Rs. 1,23,843 was deposited by the assessee on 29-4-2013, i.e. within the stipulated time period, Page 34 of APB. 9. Alternatively, the learned Authorised Representative had assailed the validity of the jurisdiction assumed by the ITO, Ward-1(1), Raipur who had issued notice under section 148 of the Act dated 30-3-2021 on the ground that as the jurisdiction over the case of the assessee company was vested with the ITO, Bhatapara, therefore, the assessment framed in absence of valid assumption of jurisdiction could not be sustained and was liable to be struck down on the said count itself. Also, the learned Authorised Representative had assailed the assumption of jurisdiction by the ITO, Ward-1(1), Raipur de-hors any order of transfer of jurisdiction under section 127 of the Act. 10. Per contra, the learned Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was vehemently submitted by him that as the assessee company by adopting a lackadaisical approach had not only failed to participate in the assessment proceedings, but had also failed to prosecute the matter before the Commissioner (Appeals), therefore, the said appeal had rightly been dismissed by the first appellate authority. 11. As is discernible from the written submissions filed by the assessee company, it transpires that it had in the "Form 35" based on exhaustive grounds of appeal assailed the subject addition/disallowance as well as adjustment made by the assessing officer to the "book profit" disclosed by the assessee under section 115JB of the Act. Admittedly, the assessee had not only failed to participate in the proceedings before the assessing officer but had also failed to prosecute the matter before the Commissioner (Appeals). However, I am of the view that now when the assessee company had raised before the Commissioner (Appeals) elaborate grounds of appeal, based on which, the order of the assessing officer was assailed before him, it was incumbent on the part of the Commissioner (Appeals) to have disposed off the appeal by way of a well-reasoned and speaking order after considering the aforesaid claim of the assessee. I am unable to concur with the manner in which the Commissioner (Appeals) had summarily dismissed the appeal of the assessee for want of prosecution. 12. As observed hereinabove, the Commissioner (Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issues which did arise from the impugned order and was assailed by the assessee before him. In my considered view, once an appeal is preferred before the Commissioner (Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. In fact, a perusal of section 251(1)(a) and (b), as well as the "Explanation" to section 251(2) of the Act reveals that the Commissioner (Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per mandate of law the Commissioner (Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT v. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom) : 2016 TaxPub(DT) 3496 (Bom-HC). In the aforementioned case the Hon'ble High Court had observed as under: "8. From the aforesaid provisions, it is very clear once an appeal is preferred before the Commissioner (Appeals), 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 of the Act. Further, Section 250(6) of the Act obliges the Commissioner (Appeals) 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 (h) of the Act provide that while disposing of appeal the Commissioner (Appeals) 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 Commissioner (Appeals) 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 Commissioner (Appeals). 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 Commissioner (Appeals) is obliged to dispose of the appeal on merits. In fact w.e.f. 1-6-2001 the power of the Commissioner (Appeals) 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 Commissioner (Appeals) are 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 Commissioner (Appeals) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the section 251(1)(a) and (b) and Explanation to section 251(2) of the Act which requires the Commissioner (Appeals) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the Commissioner (Appeals) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act." 13. I, thus, not being able to persuade myself to subscribe to the dismissal of the appeal by the Commissioner (Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the Commissioner (Appeals) in the course of the de novo appellate proceedings shall afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to raise the additional grounds of appeal which have been raised before me. Thus, the grounds of appeal/additional ground of appeal raised by the assessee are allowed for statistical purposes in terms of the aforesaid observations. 14. In the result, the appeal filed by the assessee company is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 8-4-2024.

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Income Tax Act, 1961, Section 251

Order of CIT(A)--Validity--Appeal dismissed on account of non-prosecution

Conclusion: Once an appeal is preferred before CIT(A), it becomes obligatory on his part to dispose of the same on merits and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by assessee.

AO made certain additions/disallowances. Assessee carried matter in appeal before CIT(A). Despite being afforded sufficient opportunity, assessee failed to participate in proceedings before CIT(A), therefore, the CIT(A) holding a conviction that assessee was not interested in prosecuting the matter, dismissed the appeal. Held: CIT (A) disposed off assessee's appeal for non-prosecution and failed to apply his mind to the issues, which arose from impugned order and assailed by assessee before him. Once an appeal is preferred before CIT(A), it becomes obligatory on his part to dispose of the same on merits and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by assessee. In fact, a perusal of section 251(1)(a) and (b), as well as "Explanation" to section 251(2), revealed that CIT(A) remains under a statutory obligation to apply his mind to all the issues, which arises from impugned order before him. As per mandate of law, CIT (A) is not vested with any power to summarily dismiss the appeal for non-prosecution. Hence, order of CIT(A) was set-aside and matter was remanded with a direction to dispose of the same on merits after affording a reasonable opportunity of being heard to assessee.

Decision: In assessee's favour

Relied: Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom) : 2016 TaxPub(DT) 3496 (Bom-HC)

IN THE ITAT RAIPUR BENCH

RAVISH SOOD, J.M.

Pramod Infrastructure (P) Ltd. v. ITO

ITA No. 82/RPR/2024

8 April, 2024

Assessee by: Sakshi Gopal Agrawal and Siddharth Parakh, CAs

Revenue by: Satya Prakash Sharma, Sr. DR

ORDER

Ravish Sood, J.M.

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 12-1-2024, which in turn arises from the order passed by the assessing officer under section 147 read with section 144 read with section 144B of the Income-tax Act, 1961 (in short 'the Act') dated 19-3-2022 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal:

"1. That on fact and circumstances of case of appellant. Learned assessing officer, NFAC has erred for disallowing depreciation at higher rate of 30% on JCB and Tata Hitachi as the appellant was very much eligible for claiming higher depreciation and Commissioner (Appeals), NFAC has erred for confirming the same.

2. That on fact and circumstances of case of appellant. Learned assessing officer, NFAC has erred for disallowing interest of Rs. 14,01,072 on hire charges under section 40(a)(ia) of Income Tax Act on account of non-deduction of TDS as well as Commissioner (Appeals), NFAC has erred for confirming the same.

3. That on the fact and circumstances of the case, learned assessing officer, NFAC and has been erred for making addition/adjustment to book profit under section 115JB which is beyond the scope of addition/adjustment given under section 115JB and Commissioner (Appeals), NFAC has erred for confirming the same.

4. That on the fact and circumstances of the case, the honorable Commissioner (Appeals) has erred for confirming the order of learned assessing officer without properly appreciating the fact of the case.

5. That, assessee reserves the right to add, amend, alter or withdraw any ground/grounds of appeal at the time of hearing."

Also the assessee has raised additional grounds of appeal which reads as under:

"That your honour, the notice under section 148 of the Income Tax Act, 1961 dated 30-3-2021 for the assessment year 2013-14 issued by ITO, Ward 1(1), Raipur is invalid. The jurisdiction of the appellant company lies with ITO, Bhatapara and not with ITO 1(1), Raipur, who had issued the notice under section 148 without assuming the jurisdiction over the appellant company as there is no evidence of transfer of case of the appellant from ITO, Bhatapara to the ITO 1(1), Raipur as required in terms of section 127 of Income Tax Act 1961. Accordingly, without a valid notice under section 148 the whole proceeding as well as the assessment order under section 147 read with section 144B will become null and void."

2. Succinctly stated, the assessee company which is engaged in the business of executing electrical and civil contracts had filed its return of income for assessment year 2013-14 on 28-9-2013, declaring a loss of Rs. (-) 17,02,395. Subsequently, the case of the assessee company was selected for scrutiny assessment under section 143(2) of the Act.

3. As the assessee company had failed to put up an appearance in the course of the proceedings before the assessing officer, therefore, the latter proceeded with the assessment on an ex-parte basis and after, inter alia, making certain additions/ disallowances, viz. (i) disallowance of the assessee's claim for higher rate of depreciation on JCB and Tata Hitachi vehicles i.e., @30%; (ii) disallowance under section 40(a)(ia) of the Act of the assessee's claim for deduction of interest charges; and (iii) carrying out adjustment to the "book profit" disclosed by the assessee company under section 115JB of the Act of the addition/disallowance made while framing the assessment, vide his order passed under section 147 read with section 144 read with section 144B of the Act dated 19-3-2022 determined its income at Rs. 4,40,470 (under the normal provisions) and further reworked out the "book profit" under section 115JB at Rs. 26,23,092.

4. Aggrieved the assessee company carried the matter in appeal before the Commissioner (Appeals). As the assessee company despite having been afforded sufficient opportunity on two occasions had failed to participate in the proceedings before the Commissioner (Appeals), therefore, the latter holding a conviction that it was not interested in prosecuting the matter dismissed the appeal.

5. The assessee being aggrieved with the order of the Commissioner (Appeals) has carried the matter in appeal.

6. I have heard the learned Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record as well as considered the judicial pronouncements that have been pressed into service by the learned Authorised Representative to drive home his contentions.

7. Shri Sakshi Gopal Aggrawal, learned Authorized Representative (for short 'AR') for the assessee company assailed the addition/disallowance a/w the adjustment to the "book profit" made by the assessing officer, which, thereafter, had been upheld by the Commissioner (Appeals). Apropos the declining by the assessing officer of the assessee's claim for higher depreciation i.e., @ 30% on the JCB/Tata Hitachi vehicles, the learned Authorised Representative submitted that the assessing officer had given two-fold reasons for not accepting the same, viz. (i) that as the subject vehicles were not motor lorries/motor taxies used in the business of running them on hire as provided in Rule 5, Appendix-I (effective from assessment year 2006-07 onwards), thus, they were not eligible for higher rate of depreciation; and (ii) the subject vehicles unlike motor lorries, motor truck could not have been used in the business of running it on hire. Rebutting the aforesaid observations of the assessing officer, the learned Authorised Representative had drawn support from the judgment of the Hon'ble High Court of Kerala in the case of CIT v. Gaylord Constructions, ITA No. 1255 of 2009, dt. 19-8-2009 : 2010 TaxPub(DT) 0718 (Ker-HC), wherein it was held that JCB is entitled to higher rate of depreciation.

8. Apropos the disallowance under section 40(a)(ia) of the Act of the assessee's claim for deduction of interest charges of Rs. 14,01,072, the learned Authorised Representative submitted that the same was comprised of interest on hire charges paid to HDFC bank Ltd : Rs. 6,01,178.40 and interest paid to NBFCs : Rs. 8,95,534.73. Elaborating on his contention, the learned Authorised Representative submitted that the interest charges paid to nationalized banks were not liable for deduction of tax at source as per the mandate of Section 194A(3)(a) of the Act. The learned Authorised Representative in support of his aforesaid contention had taken me through the bifurcated details of interest paid/tax deducted at source, Page 33 of APB. As regards the balance amount of interest charges of Rs. 8,95,534, the learned Authorised Representative submitted that tax at source of Rs. 1,23,843 was deposited by the assessee on 29-4-2013, i.e. within the stipulated time period, Page 34 of APB.

9. Alternatively, the learned Authorised Representative had assailed the validity of the jurisdiction assumed by the ITO, Ward-1(1), Raipur who had issued notice under section 148 of the Act dated 30-3-2021 on the ground that as the jurisdiction over the case of the assessee company was vested with the ITO, Bhatapara, therefore, the assessment framed in absence of valid assumption of jurisdiction could not be sustained and was liable to be struck down on the said count itself. Also, the learned Authorised Representative had assailed the assumption of jurisdiction by the ITO, Ward-1(1), Raipur de-hors any order of transfer of jurisdiction under section 127 of the Act.

10. Per contra, the learned Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was vehemently submitted by him that as the assessee company by adopting a lackadaisical approach had not only failed to participate in the assessment proceedings, but had also failed to prosecute the matter before the Commissioner (Appeals), therefore, the said appeal had rightly been dismissed by the first appellate authority.

11. As is discernible from the written submissions filed by the assessee company, it transpires that it had in the "Form 35" based on exhaustive grounds of appeal assailed the subject addition/disallowance as well as adjustment made by the assessing officer to the "book profit" disclosed by the assessee under section 115JB of the Act. Admittedly, the assessee had not only failed to participate in the proceedings before the assessing officer but had also failed to prosecute the matter before the Commissioner (Appeals). However, I am of the view that now when the assessee company had raised before the Commissioner (Appeals) elaborate grounds of appeal, based on which, the order of the assessing officer was assailed before him, it was incumbent on the part of the Commissioner (Appeals) to have disposed off the appeal by way of a well-reasoned and speaking order after considering the aforesaid claim of the assessee. I am unable to concur with the manner in which the Commissioner (Appeals) had summarily dismissed the appeal of the assessee for want of prosecution.

12. As observed hereinabove, the Commissioner (Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the issues which did arise from the impugned order and was assailed by the assessee before him. In my considered view, once an appeal is preferred before the Commissioner (Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. In fact, a perusal of section 251(1)(a) and (b), as well as the "Explanation" to section 251(2) of the Act reveals that the Commissioner (Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per mandate of law the Commissioner (Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT v. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom) : 2016 TaxPub(DT) 3496 (Bom-HC). In the aforementioned case the Hon'ble High Court had observed as under:

"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the Commissioner (Appeals), 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 of the Act. Further, Section 250(6) of the Act obliges the Commissioner (Appeals) 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 (h) of the Act provide that while disposing of appeal the Commissioner (Appeals) 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 Commissioner (Appeals) 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 Commissioner (Appeals). 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 Commissioner (Appeals) is obliged to dispose of the appeal on merits. In fact w.e.f. 1-6-2001 the power of the Commissioner (Appeals) 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 Commissioner (Appeals) are 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 Commissioner (Appeals) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the section 251(1)(a) and (b) and Explanation to section 251(2) of the Act which requires the Commissioner (Appeals) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the Commissioner (Appeals) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act."

13. I, thus, not being able to persuade myself to subscribe to the dismissal of the appeal by the Commissioner (Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the Commissioner (Appeals) in the course of the de novo appellate proceedings shall afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to raise the additional grounds of appeal which have been raised before me. Thus, the grounds of appeal/additional ground of appeal raised by the assessee are allowed for statistical purposes in terms of the aforesaid observations.

14. In the result, the appeal filed by the assessee company is allowed for statistical purposes in terms of the aforesaid observations.

Order pronounced in open court on 8-4-2024.