DIRECTOR OF INCOME TAX vs. SEAWORLD SHIPPING AND LOGISTICS PVT. LTD.

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TAXAP/720/2013HC GujaratGJHC24023032201322 October 2013Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the ITAT had indeed dismissed the Revenue's appeal solely on the ground that the departmental representative could not identify any infirmities in the CIT(A)'s order. The Court found that the ITAT had not applied its independent mind to the merits of the case or the legality and validity of the CIT(A)'s order. The impugned order of the ITAT was characterized as a non-speaking order concerning the order passed by the CIT(A). Consequently, the High Court found the ITAT's order unsustainable. The appeal was allowed, the ITAT's judgment and order were quashed and set aside, and the matter was restored to the file of the ITAT. The ITAT was directed to consider and dispose of the Revenue's appeal in accordance with law and on merits, passing a speaking order on the legality and validity of the CIT(A)'s order.

What were the facts?

The Revenue, through the Director of Income Tax, filed a Tax Appeal before the High Court of Gujarat challenging an order dated April 12, 2013, passed by the Income Tax Appellate Tribunal (ITAT), Rajkot Bench. The ITAT had dismissed the Revenue's appeal (ITA No. 98/Rjt/2012) concerning Assessment Year 2010-2011. The Revenue's grievance was that the ITAT dismissed its appeal solely on the ground that the departmental representative could not point out any infirmities in the order of the Commissioner of Income Tax (Appeals) [CIT(A)]. The Revenue contended that the ITAT failed to apply its own independent mind and did not decide the appeal on merits.

What were the issues?

1. Whether the ITAT erred in dismissing the Revenue's appeal without independently considering the merits and legality of the CIT(A)'s order, relying solely on the departmental representative's inability to point out infirmities? Assessee's Contentions: The Revenue argued that the ITAT's order was a non-speaking order, lacking independent application of mind. It contended that the Tribunal was obligated to provide its own findings on the legality and validity of the CIT(A)'s order. The Revenue relied on the principle that appellate authorities must pass speaking orders. Therefore, the Revenue sought to have the ITAT's order quashed and the matter remanded for fresh consideration on merits. Revenue's Contentions: The assessee (respondent) did not dispute the Revenue's submissions. The assessee's counsel was unable to point out from the impugned judgment that the ITAT had dealt with the appeal on merits or considered the legality and validity of the CIT(A)'s order.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
O/TAXAP/720/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 720 of 2013 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH Sd/- and HONOURABLE MS JUSTICE SONIA GOKANI Sd/- ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ================================================================ DIRECTOR OF INCOME TAX....Appellant(s) Versus SEAWORLD SHIPPING AND LOGISTICS PVT. LTD.....Opponent(s) ================================================================ Appearance: MR MANISH BHATT, ADVOCATE for the Appellant(s) No. 1 MS HINA DESAI, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MS JUSTICE SONIA GOKANI Page 1 of 4 O/TAXAP/720/2013 JUDGMENT Date : 22/10/2013

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.00.

Present Tax Appeal has been preferred by the appellant – revenue against the Judgement and Order dated 12/4/2013 passed by the learned Income Tax Appellate Tribunal, Rajkot Bench, Rajkot in ITA No.98/Rjt/2012 with respect to AY 2010-2011 by which the learned tribunal has dismissed the appeal preferred by the revenue solely on the ground that the departmental representative when asked could not point out any infirmities in the order of the learned CIT(A).

2.00.

Mr.Manish Bhatt, learned counsel appearing on behalf of the appellant – revenue has submitted that the learned tribunal has dismissed the appeal preferred by the revenue solely on the ground that the departmental representative when asked could not point out any infirmities in the order of the learned CIT(A). It is submitted that there is no independent application of mind by the learned tribunal while dismissing the appeal preferred by the revenue and the learned tribunal has not expressed any opinion on merits and/or with respect to legality and validity of the order passed by the learned CIT(A). It is submitted that as such it was incumbent on the part of the tribunal to give its own independent finding with respect to the order passed by the learned CIT(A). It is submitted that, therefore, on this ground O/TAXAP/720/2013 JUDGMENT alone, the impugned Judgement and Order passed by the learned tribunal deserves to be quashed and set aside and the matter is to be remanded to the learned tribunal to consider

the appeal afresh in accordance with law and on merits by directing the learned tribunal to pass a speaking order with respect to order passed by the learned CIT(A) impugned before it.

3.00.

Ms.Heena Desai, learned advocate appearing on behalf of the respondent – assessee is not in a position to dispute the above. She is not in a position to point out from the impugned judgement and order passed by the learned tribunal that the learned tribunal has dealt with the appeal on merits and has considered the legality and validity of the order passed by the CIT(A).

4.00.

Having heard Mr.Manish Bhatt, learned counsel appearing on behalf of the appellant and Ms.Heena Desai, learned advocate appearing on behalf of the revenue and on perusal of the impugned judgement and order passed by the tribunal, it appears that the learned tribunal has dismissed the appeal preferred by the revenue solely on the ground that the departmental representative when asked could not point out any infirmities in the order of the learned CIT(A). It appears that the learned tribunal has not given its own independent finding with respect to the order passed by the CIT(A) impugned before it. It appears that there is no independent application of mind by the learned tribunal with respect to the order passed by the CIT(A) impugned in the appeal before it. The impugned order passed by the tribunal is absolutely a non- speaking order with respect to legality and validity of the order O/TAXAP/720/2013 JUDGMENT passed by the CIT(A) impugned in the appeal before it. Under the circumstances, the impugned order passed by the ITAT cannot be sustained and the same deserves to be quashed and set aside.

5.00.

In view of the above and for the reasons stated above and on the aforesaid ground alone, present appeal is allowed and the impugned the Judgement and Order dated 12/4/2013 passed by the learned Income Tax Appellate Tribunal, Rajkot Bench, Rajkot in ITA No.98/Rjt/2012 is hereby quashed and set aside and the matter is restored to file of learned tribunal. The learned tribunal is hereby directed to consider, decide and dispose of the appeal preferred by the revenue in accordance with law and on merits and consider the legality and validity of the order passed by the learned CIT(A) and pass a speaking order with respect to the order passed by the learned CIT(A) impugned in the appeal before it. (M.R.SHAH, J.) (MS SONIA GOKANI, J.) Rafik

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