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Facts
The assessee's declared long-term capital gains from the sale of listed shares were treated as bogus and unexplained cash credit under Section 68 and Section 10(38) of the Income Tax Act by the Assessing Officer, citing share price manipulation and accommodation entries. The Ld. CIT(A) upheld this addition, relying on a Supreme Court judgment that the assessee contended was factually distinguishable and without addressing the detailed documentary evidence provided by the assessee.
Held
The Income Tax Appellate Tribunal (ITAT) held that the CIT(A)'s order was non-speaking, lacked reasoned findings, and failed to consider the assessee's submissions and evidence, thereby violating Section 250(6) of the Income Tax Act and principles of natural justice. The ITAT set aside the CIT(A)'s order and remanded the matter for fresh adjudication, directing the CIT(A) to pass a reasoned order after considering all relevant material and providing adequate opportunity of hearing.
Key Issues
The key issues were the confirmation of addition for bogus long-term capital gain/unexplained cash credit, the CIT(A)'s failure to pass a reasoned and speaking order, and the condonation of delay in filing the appeal.
Sections Cited
68, 10(38), 133(6), 250(6), 5 (Limitation Act)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT (ACCOUNTANT & SHRI RAJ KUMAR CHAUHAN
ORDER Per Bench:
These three appeals by the Assessee are directed against three separate orders dated 24th March, 2023; 13th September, 2023 and 23rd January, 2024, passed by the Ld. Commissioner of Income-tax(Appeals)-National Faceless Appeal Centre [(in short Ld.CIT (A)] for AY 2014-15, 2015-16 and 2016-17 respectively.
In appeals for AY 2014-15 and 2015-16, the Assessing In appeals for AY 2014 16, the Assessing Officer made addition of sale proceeds of shares of Officer made addition of sale proceeds of shares of M/s. Officer made addition of sale proceeds of shares of Lifeline Drugs & Pharma Ltd. as unexplained Lifeline Drugs unexplained cash credit in terms of Section 68 of the Income-tax in terms of Section 68 of the tax Act, 1961 (in short the Act). In AY 2016-17, the AO considered the sale short the Act) 17, the AO considered the sale proceeds of shares Toyam Industries Limited/ proceeds of shares Toyam Industries Limited/Ojas Asset Reconstruction Company Ltd. as unexplained cash credit Reconstruction as unexplained cash credit under Section 68 of the Act. As an issues- under Section 68 of the Act. As a -in-dispute in all the appeals are identical ls are identical, therefore, same were heard therefore, same were heard together and dispose and disposed off by way of this this consolidated orders for the sake of convenience. orders for the sake of convenience.
Firstly, we take the appeal for AY 2014 Firstly, we take the appeal for AY 2014-15. Both the parties agreed that the decision on the grounds decided parties agreed that the decision on the grounds decided parties agreed that the decision on the grounds decided in AY 2014 4-15 may be applied mutatis mutandis mutatis mutandis on the grounds raised
in the said assessment order. grounds raised in the said assessment order. grounds raised in the said assessment order.
4. Grounds for AY 2014-15 are reproduced as Grounds for AY 2014 15 are reproduced as under: “1. BECAUSE, the CIT(A) has erred in law and on facts BECAUSE, the CIT(A) has erred in law and on facts BECAUSE, the CIT(A) has erred in law and on facts in confirming the order of the AO in treating long term in confirming the order of the AO in treating long term in confirming the order of the AO in treating long term capital gain of Rs.61,49,000/ capital gain of Rs.61,49,000/-from sale of listed shares of from sale of listed shares of M/s. Lifeline Drugs and Pharma Ltd. as unexplained cash M/s. Lifeline Drugs and Pharma Ltd. as unexplained cash M/s. Lifeline Drugs and Pharma Ltd. as unexplained cash credit u/s 68 of the Act. credit u/s 68 of the Act.
2. BECAUSE, the CIT(A) has given a go by to the direct BECAUSE, the CIT(A) has given a go by to the direct BECAUSE, the CIT(A) has given a go by to the direct and clinching evidence in support of the transaction and clinching evidence in support of the transaction and clinching evidence in support of the transaction presented by the Appellant thereby discharging its onus. presented by the Appellant thereby discharging its onus. presented by the Appellant thereby discharging its onus.
3. BECAUSE, the CIT(A) and the AO has failed to BECAUSE, the CIT(A) and the AO has failed to BECAUSE, the CIT(A) and the AO has failed to produce any material/evidence to dislodge or c produce any material/evidence to dislodge or c produce any material/evidence to dislodge or controvert the genuineness of documentary evidences produced by the genuineness of documentary evidences produced by the genuineness of documentary evidences produced by the assessee in support of his claim and has rather placed the assessee in support of his claim and has rather placed the assessee in support of his claim and has rather placed reliance upon some untested and uncorroborated report of reliance upon some untested and uncorroborated report of reliance upon some untested and uncorroborated report of investigation wing where the Appellant is not even named. investigation wing where the Appellant is not even named. investigation wing where the Appellant is not even named.
BECAUSE, the CIT BECAUSE, the CIT(A) failed to consider the decision (A) failed to consider the decision of hon'ble Delhi ITAT in the case of hon'ble Delhi ITAT in the case Shri Anoop Jain v. ACIT Shri Anoop Jain v. ACIT (2020) 186 DTR (Del) (Trib) 57 (2020) 186 DTR (Del) (Trib) 57 squarely applicable in the squarely applicable in the present case wherein the Court has held that financials of present case wherein the Court has held that financials of present case wherein the Court has held that financials of M/s. Lifeline Drugs and Pharma Ltd. goes to s M/s. Lifeline Drugs and Pharma Ltd. goes to s M/s. Lifeline Drugs and Pharma Ltd. goes to show that it is not a paper company nor a shell company. is not a paper company nor a shell company.
5. BECAUSE, the CIT(A) and AO both have erred both BECAUSE, the CIT(A) and AO both have erred both BECAUSE, the CIT(A) and AO both have erred both in law and in fact by failing to provide copies of the in law and in fact by failing to provide copies of the in law and in fact by failing to provide copies of the statements relied upon by the department and by denying statements relied upon by the department and by denying statements relied upon by the department and by denying an opportunity to cross an opportunity to cross-examine the individuals whose dividuals whose statements have been used as the basis for the addition statements have been used as the basis for the addition statements have been used as the basis for the addition made, even on specific request. made, even on specific request.
6. BECAUSE, the CIT(A) has erred in law and on facts BECAUSE, the CIT(A) has erred in law and on facts BECAUSE, the CIT(A) has erred in law and on facts in confirming the addition of commission @7% amounting in confirming the addition of commission @7% amounting in confirming the addition of commission @7% amounting to Rs.433,370/ to Rs.433,370/-unexplained cash credit u/s 6 unexplained cash credit u/s 68 of the Act purely on assumption and presumption without bringing purely on assumption and presumption without bringing purely on assumption and presumption without bringing
on record any document that the Appellant had incurred on record any document that the Appellant had incurred on record any document that the Appellant had incurred said expenditure. said expenditure.
At the outset, the learned Counsel for the assessee drew At the outset, the learned Counsel for the assessee drew At the outset, the learned Counsel for the assessee drew our attention to the application seeking condonation of our attention to the application seeking condonation of a our attention to the application seeking condonation of delay of 392 days 392 days in filing the appeal. It was submitted in filing the appeal. It was submitted that the delay occurred solely due to an inadvertent lapse that the delay occurred solely due to an inadvertent lapse that the delay occurred solely due to an inadvertent lapse on the part of the accountant, who failed to notice the on the part of the accountant, who failed to notice the on the part of the accountant, who failed to notice the appellate order dated 30.09.2023 delivered to the appellate order dated delivered to the assessee’s registered e-mail ID. The assessee became assessee’s registered e The assessee became aware of the order only upon receipt of the subsequent aware of the order only upon receipt of the subsequent aware of the order only upon receipt of the subsequent penalty notice. It was emphasized that the assessee has penalty notice. It was emphasized that the assessee has penalty notice. It was emphasized that the assessee has otherwise been diligent in all tax proceedings, and this otherwise been diligent in all tax proceedings, and this otherwise been diligent in all tax proceedings, and this lapse is an isolated, bona fide error. lapse is an isolated, bona fide error.
5.1 The written submissions highlight that (i) no benefit The written submissions highlight that (i) no benefit accrued to the assessee as a result of the delay, (ii) no accrued to the assessee as a result of the delay, (ii) no accrued to the assessee as a result of the delay, (ii) no prejudice will be caused to the Department if the delay is prejudice will be caused to the Department if the delay is prejudice will be caused to the Department if the delay is condoned, and (iii) substantial issues arising in the condoned, and (iii) substantial issues arising in the condoned, and (iii) substantial issues arising in the appeal merit adjudication on merits rather than being appeal merit adjudication on merits rather than being appeal merit adjudication on merits rather than being defeated on a technical lapse. efeated on a technical lapse.
5.2 We have considered the rival submissions, examined the We have considered the rival submissions, examined the We have considered the rival submissions, examined the affidavits, and perused the material on record. In our affidavits, and perused the material on record. In our affidavits, and perused the material on record. In our view, the explanation furnished constitutes a view, the explanation furnished constitutes a “sufficient view, the explanation furnished constitutes a cause” within the meaning of section 5 of the Limitati within the meaning of section 5 of the Limitation within the meaning of section 5 of the Limitati Act, as expounded by the Hon’ble Supreme Court in Act, as expounded by the Hon’ble Supreme Court in Act, as expounded by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (1987) 167 ITR Collector, Land Acquisition v. Mst. Katiji 471 (SC), wherein it was held that courts should adopt a 471 (SC), wherein it was held that courts should adopt a 471 (SC), wherein it was held that courts should adopt a liberal approach in condoning delays where substantial liberal approach in condoning delays where substantial liberal approach in condoning delays where substantial justice is at stake. The Supreme Court in N. Balakrishnan justice is at stake. The Supreme Court in N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 further held that (1998) 7 SCC 123 further held that v. M. Krishnamurthy length of delay is immaterial so long as the explanation is length of delay is immaterial so long as the explanation is satisfactory and the conduct bona fide. satisfactory and the conduct bona fide.
5.3 Applying these principles, we find that the delay is Applying these principles, we find that the delay is Applying these principles, we find that the delay is neither deliberate nor motivated, but attributable to a neither deliberate nor motivated, but attributable to a neither deliberate nor motivated, but attributable to a genuine inadvertent error. No mala fide can be imputed, genuine inadvertent error. No mala fide can be imputed, genuine inadvertent error. No mala fide can be imputed, and no prejudice is shown to have been caused to the d no prejudice is shown to have been caused to the d no prejudice is shown to have been caused to the Revenue. In the interest of substantial justice, the Revenue. In the interest of substantial justice, the Revenue. In the interest of substantial justice, the explanation merits acceptance. explanation merits acceptance.
5.4 Accordingly, the delay of 392 days in filing the appeal is Accordingly, the delay of 392 days in filing the appeal is Accordingly, the delay of 392 days in filing the appeal is condoned, and the appeal is admitted for adjudication on , and the appeal is admitted for adjudication on , and the appeal is admitted for adjudication on merits.
Briefly stated, the assessee is an individual engaged Briefly stated, the assessee is an individual engaged Briefly stated, the assessee is an individual engaged in the business of building and construction as a in the business of building and construction as a in the business of building and construction as a partner in the firm M/s SSD Buildtech. He filed his partner in the firm M/s SSD Buildtech. He filed his partner in the firm M/s SSD Buildtech. He filed his return of income on 30.09.2014, declaring a total return of income on , declaring a total
income of Rs. 28,90,820/-. The return wa income of . The return was selected for scrutiny, and statutory notices issued under the for scrutiny, and statutory notices issued under the for scrutiny, and statutory notices issued under the Act were duly served and complied with. During the Act were duly served and complied with. During the Act were duly served and complied with. During the assessment proceedings, the Assessing Officer noted assessment proceedings, the Assessing Officer noted assessment proceedings, the Assessing Officer noted that the assessee had purchased 1,000 shares that the assessee had purchased 1,000 shares of M/s Lifeline Drugs and Pharma Ltd. on 17. M/s Lifeline Drugs and Pharma Ltd. on 17.09.2011 through an offline transaction from a Kolkata through an offline transaction from a Kolkata-based through an offline transaction from a Kolkata broker, Saikat Tradelink Pvt. Ltd. Subsequently, the broker, Saikat Tradelink Pvt. Ltd. Subsequently, the broker, Saikat Tradelink Pvt. Ltd. Subsequently, the company issued 4,000 bonus shares on 06.08.2012 company issued 06.08.2012 in the ratio of 1:2, and the shares underwent a split in the ratio of 1:2, and the shares underwent a split in the ratio of 1:2, and the shares underwent a split on 01.10.2013 01.10.2013, resulting in the assessee , resulting in the assessee holding 50,000 shares. Out of these, 35,000 shares 50,000 shares 35,000 shares were sold during the year relevant to A.Y. 2014 sold during the year relevant to A.Y. 2014–15, while sold during the year relevant to A.Y. 2014 the remaining 15,000 shares were sold in the the remaining were sold in the following year. following year. 6.1 The Assessing Officer observed that the market price The Assessing Officer observed that the market price The Assessing Officer observed that the market price of the shares fluctuated between ₹0.80– –₹0.85 from of the shares fluctuated betw January 2011 to January 2013, but subsequently January 2011 to January 2013, but subsequently January 2011 to January 2013, but subsequently surged to ₹176.90 in February 2014. According to surged to in February 2014. According to the Assessing Officer, such an exponential rise was the Assessing Officer, such an exponential rise was the Assessing Officer, such an exponential rise was wholly wholly wholly disproportionate disproportionate disproportionate to to to the the the financials financials financials and and and performance of the company. The AO further performance of the company. The AO further performance of the company. The AO further highlighted that, despite the shares being listed, the highlighted that, despite the shares being listed, the highlighted that, despite the shares being listed, the assessee chose to purchase them offline, raising assessee chose to purchase t hem offline, raising concerns about the genuineness of the transaction. concerns about the genuineness of the transaction. concerns about the genuineness of the transaction. The assessee’s statement was recorded, wherein he The assessee’s statement was recorded, wherein he The assessee’s statement was recorded, wherein he admitted to having little knowledge of the purchase admitted to having little knowledge of the purchase admitted to having little knowledge of the purchase and sale of shares, including the transaction in and sale of shares, including the transaction in and sale of shares, including the transaction in question. Notices issued to the brokers under section question. Notices issued to the b rokers under section 133(6) of the Act remained unserved. The Assessing 133(6) of the Act remained unserved. The Assessing 133(6) of the Act remained unserved. The Assessing Officer also relied upon statements recorded by the Officer also relied upon statements recorded by the Officer also relied upon statements recorded by the Investigation Wing—inter alia of Shri Anuj Agrawal Investigation Wing inter alia of Shri Anuj Agrawal (13.03.2015) (13.03.2015) (13.03.2015) and and and Shri Shri Shri Devesh Devesh Devesh Upadhyay Upadhyay Upadhyay (01.05.2015)—who were found to be orchestra (01.05.2015) who were found to be orchestrating accommodation entries in the guise of long accommodation entries in the guise of long-term accommodation entries in the guise of long capital capital capital gains gains gains through through through various various various penny penny penny stock stock stock companies, including M/s Lifeline Drugs and Pharma companies, including M/s Lifeline Drugs and Pharma companies, including M/s Lifeline Drugs and Pharma Ltd. The Assessing Officer further noted, in the show Ltd. The Assessing Officer further noted, in the show- Ltd. The Assessing Officer further noted, in the show cause notice, that the pattern of matching purchase cause notice, that the pattern of matching purchase cause notice, that the pattern of matching purchase and sale orders demonstrated a pre sale orders demonstrated a pre-arranged and arranged and collusive mechanism. After considering the assessee’s collusive mechanism. After considering the assessee’s collusive mechanism. After considering the assessee’s submissions, the AO rejected the explanation and submissions, the AO rejected the explanation and submissions, the AO rejected the explanation and passed an order on 29.12.2016, treating the long passed an order on , treating the long- term capital gain claimed under section 10(38) as term capital gain claimed under section 10(38) as term capital gain claimed under section 10(38) as bogus. On On further appeal the Ld. CIT (A) dismissed further appeal the Ld. CIT (A) dismissed the appeal of the assessee observing as under the appeal of the assessee observing as under:
“5.1. I have gone through the Assessment Order and . I have gone through the Assessment Order and . I have gone through the Assessment Order and submissions of the appellant. The learned AO carried submissions of the appellant. The learned AO carried submissions of the appellant. The learned AO carried addition of Rs.38,41,300/ addition of Rs.38,41,300/- by reversing exempted long by reversing exempted long termcapita termcapital gain u/s 10(38) of 1.T. Act. The appellant had l gain u/s 10(38) of 1.T. Act. The appellant had sold 15000 shares named asM/s Life line Drugs & sold 15000 shares named asM/s Life line Drugs & sold 15000 shares named asM/s Life line Drugs & Pharma Ltd the same were found to be penny stock. Pharma Ltd the same were found to be penny stock. Pharma Ltd the same were found to be penny stock. Thelearned AO contented that the underlined companies Thelearned AO contented that the underlined companies Thelearned AO contented that the underlined companies were bogus and without anysubstance and he observed were bogus and without anysubstance and he observed were bogus and without anysubstance and he observed that there is sudden surge in the volume traded andprice t there is sudden surge in the volume traded andprice t there is sudden surge in the volume traded andprice is artificially rigged for these shares. The action learned is artificially rigged for these shares. The action learned is artificially rigged for these shares. The action learned AO is based on Investigation carried out by Kolkata AO is based on Investigation carried out by Kolkata AO is based on Investigation carried out by Kolkata Investigation Directorate on 84 penny stocks. These shares Investigation Directorate on 84 penny stocks. These shares Investigation Directorate on 84 penny stocks. These shares sold by appellant falls under s sold by appellant falls under such investigation. In the uch investigation. In the submissions submissions the the appellant appellant had had claimed claimed that that the the contentions are genuine. However, it failed to refutethe contentions are genuine. However, it failed to refutethe contentions are genuine. However, it failed to refutethe contentions raised by learned AO i contentions raised by learned AO i.e, reason for sudden e, reason for sudden increase in trade increase in trade volumes, unusual rise in price, findings of volumes, unusual rise in price, findings of investigation wing, justification againstorder of SEBI ation wing, justification againstorder of SEBI ation wing, justification againstorder of SEBI wherein artificial methods are adopted for manipulating wherein artificial methods are adopted for manipulating wherein artificial methods are adopted for manipulating the prices, inadequate financial health of underlined the prices, inadequate financial health of underlined the prices, inadequate financial health of underlined company. company.
5.2 5.2 5.2 The The The reliance reliance reliance is is is placed placed placed on on on following following following judicial judicial judicial pronouncement The Hon'ble Apex Court in C pronouncement The Hon'ble Apex Court in Civil Appeal No. ivil Appeal No. 1969 of 2011 in the case of SEBI Vs. Rakhi Traders (P) SEBI Vs. Rakhi Traders (P) 1969 of 2011 in the case of Ltd (with Civil Appeal No.3174 Ltd (with Civil Appeal No.3174-3177 of 2011 and 3177 of 2011 and Civil AppealNo.3180 of 2011) Civil AppealNo.3180 of 2011) vide its order dated vide its order dated 08.02.18 observed as follows: 08.02.18 observed as follows:
"considering the reversal transaction, quantum price "considering the reversal transaction, quantum price "considering the reversal transaction, quantum price and and timeand sale, parties being persistent in number timeand sale, parties being persistent in number of such hugetransaction with huge price variations, it of such hugetransaction with huge price variations, it of such hugetransaction with huge price variations, it will be too naive to holdthat the transactions are will be too naive to holdthat the transactions are will be too naive to holdthat the transactions are through screen based trading andhence anonymous. through screen based trading andhence anonymous. through screen based trading andhence anonymous. Such conclusion would be overlooking theprior Such conclusion would be overlooking theprior Such conclusion would be overlooking theprior meetin meeting of minds involving synchronization of buy g of minds involving synchronization of buy and sellorder and not negotiated deals as per the and sellorder and not negotiated deals as per the and sellorder and not negotiated deals as per the Board's Board's Board's Circular. Circular. Circular. Theimpugned Theimpugned Theimpugned transaction transaction transaction are are are manipulative/ deceptive device tocreate desired loss manipulative/ deceptive device tocreate desired loss manipulative/ deceptive device tocreate desired loss and/as profit. Such synchronized trading isviolative and/as profit. Such synchronized trading isviolative and/as profit. Such synchronized trading isviolative of transpa of transparent norms of trading insecurities rent norms of trading insecurities…….. 5.3 In view of the above I am of the considerate view that 5.3 In view of the above I am of the considerate view that 5.3 In view of the above I am of the considerate view that the addition carried out bylearned AO is correct and is the addition carried out bylearned AO is correct and is the addition carried out bylearned AO is correct and is upheld.” ”
Before us, the learned Counsel for the assessee drew Before us, the learned Counsel for the assessee drew Before us, the learned Counsel for the assessee drew attention to Ground Nos. 2, 4 and 5 and submitted that attention to Ground Nos. 2, 4 and 5 a nd submitted that the detailed documentary evidence furnished, the detailed docu mentary evidence furnished, such as contract notes, broker’s notes, demat statements, bank contract notes, broker’s notes, demat statements, bank contract notes, broker’s notes, demat statements, bank statements and other supporting material, s and other supporting material, was neither s and other supporting material, examined nor discussed by the learned CIT(A). It was examined nor discussed by the learned CIT(A). It was examined nor discussed by the learned CIT(A). It was contended that the learned CIT(A) proceeded solely on the contended that the lear ned CIT(A) proceeded solely on the basis of the judgment of the Hon’ble Supreme Court in basis of the judgment of the Hon’ble Supreme Court in basis of the judgment of the Hon’ble Supreme Court in SEBI v. Rakhi Trading Pvt. Ltd.(supra), which pertains to SEBI v. Rakhi Trading Pvt. Ltd. , which pertains to synchronized derivative trades and has no factual nexus synchronized derivative trades and has no factual nexus synchronized derivative trades and has no factual nexus
with the assessee’s equity share transactions. Accord with the assessee’s equity share transactions. According with the assessee’s equity share transactions. Accord to the learned Counsel, the impugned appellate order is to the learned Counsel, the impugned appellate order is to the learned Counsel, the impugned appellate order is vitiated for being unreasoned, non-speaking and in vitiated for being unreasoned, non speaking and in disregard of the material on record as well as the judicial disregard of the material on record as well as the judicial disregard of the material on record as well as the judicial precedents cited. precedents cited.
7.1 The learned Departmental Representative, however, The learned Departmental Representative, however, The learned Departmental Representative, however, supported the orders of the authorities below and supported the orders of the authorities below and submitted that the appellate order deserves to be upheld. submitted that the appellate order deserves to be upheld. submitted that the appellate order deserves to be upheld.
We have given our thoughtful consideration to the rival We have given our thoughtful consideration to the rival We have given our thoughtful consideration to the rival submissions and perused the impugned order. A careful submissions and perused the impugned order. A careful submissions and perused the impugned order. A careful reading of the order of the learned CIT(A) revea reading of the order of the learned CIT(A) reveals that it reading of the order of the learned CIT(A) revea does not deal with the specific submissions advanced by does not deal with the specific submissions advanced by does not deal with the specific submissions advanced by the assessee, nor does it analyse the documentary the assessee, nor does it analyse the documentary the assessee, nor does it analyse the documentary evidence furnished in support of the claim. Instead, the evidence furnished in support of the claim. Instead, the evidence furnished in support of the claim. Instead, the learned CIT(A) has rested his conclusion almost entirely learned CIT(A) has rested his conclusion almost entirely learned CIT(A) has rested his conclusion almost entirely upon the decision in Rakhi Trading Pvt. Ltd. upon the decision in i Trading Pvt. Ltd.(supra), without appreciating that the said judgment relates to without appreciating that the said judgment relates to without appreciating that the said judgment relates to synchronized trades in the derivatives market and is synchronized trades in the derivatives market and is synchronized trades in the derivatives market and is factually distinguishable from the issue before us. factually distinguishable from the issue before us. factually distinguishable from the issue before us.
8.1 Section 250(6) 250(6) of the Income-tax Act mandates mandates that the first appellate authority shall state the first appellate authority shall state the points for first appellate authority shall state the determination, the decision thereon, and the determination , and the reasons for such decision. This statutory requirement is not a mere such decision This statutory requirement is not a mere procedural formality but an essential facet of adjudication procedural formality but an essential facet of adjudication procedural formality but an essential facet of adjudication to ensure transparency, fairness and accountability in to ensure transparen cy, fairness and accountability in decision-making. A non making. A non-speaking order which does not speaking order which does not address the assessee’s contentions, evidences or case address the assessee’s contentions, evidences or case-law address the assessee’s contentions, evidences or case is legally unsustainable, as held consistently by the is legally unsustainable, as held consistently by the is legally unsustainable, as held consistently by the Hon’ble Supreme Court and various High Courts. Hon’ble Supreme Court and various High Courts. Hon’ble Supreme Court and various High Courts.
8.2 In the present case, the order of the learned CIT(A) does e present case, the order of the learned CIT(A) does e present case, the order of the learned CIT(A) does not meet the mandatory requirements of section 250(6). not meet the mandatory requirements of section 250(6). not meet the mandatory requirements of section 250(6). The absence of reasoned findings and the failure to deal The absence of reasoned findings and the failure to deal The absence of reasoned findings and the failure to deal with the core submissions of the assessee constitute a with the core submissions of the assessee constitute a with the core submissions of the assessee constitute a clear violation of the principles of natural justice and clear violation of the principles of natural justice and render the order infirm. render the order infirm.
8.3 In the totality of the circumstances, we deem it just and In the totality of the circumstances, we deem it just and In the totality of the circumstances, we deem it just and proper to set aside the impugned order of the learned proper to set aside the impugned order of the learned proper to set aside the impugned order of the learned CIT(A) and restore the matter to his file for CIT(A) and restore the matter to his file for fresh CIT(A) and restore the matter to his file for adjudication. The learned CIT(A) shall: adjudication
(i) i) i) consider consider consider all all all submissions, submissions, submissions, evidences evidences evidences and and and legal legal legal authorities relied upon by both parties; authorities relied upon by both parties;
(ii) afford adequate and effective opportunity of being (ii) afford adequate and effective opportunity of being (ii) afford adequate and effective opportunity of being heard to the assessee as well as the Assessing Officer; heard to the assessee as well as the Assessing Officer; heard to the assessee as well as the Assessing Officer; and (iii) pass a reasoned, speaking order strictly in (iii) pass a reasoned, speaking order strictly in conformity (iii) pass a reasoned, speaking order strictly in with Section 250(6) Section 250(6) and the principles of natural justice. and the principles of natural justice.
The facts and legal issues involved in A.Ys. 2015 The facts and legal issues involved in A.Ys. 2015-16 and The facts and legal issues involved in A.Ys. 2015 2016-17 are substantially identical, save that the scrip 17 are substantially identical, save that the scrip 17 are substantially identical, save that the scrip involved in A.Y. 2016-17 is different. Accordingly, the involved in A.Y. 2016 17 is different. Accordingly, the grounds for these years are disposed of mutatis mutandis grounds for t mutatis mutandis in line with our directions for A.Y. 2014-15. in line with our directions for A.Y. 2014 15.
In the result all the three appeals of the assessee are In the result all the three appeals of the assessee are In the result all the three appeals of the assessee are allowed for statistical purposes. allowed for statistical purposes. Order pronounced in the open Court on Order pron ounced in the open Court on 05/12/2025. Sd/ Sd/- Sd/- (RAJ KUMAR CHAUHAN) (RAJ KUMAR (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 05/12/2025 Tarun, Sr. P.S.. Copy of the Order forwarded to Copy of the Order forwarded to :
1. 1. The Appellant 2. The Respondent. The Respondent.
3. CIT