COMMISSIONER OF INCOME TAX vs. HIROSE MANUFACTURING CO.P.LTD

ITA - 656 / 2008HC Delhi03 July 20081 pages

For Petitioner: PREM LATA BANSAL

AI SummaryDismissed

What did the High Court hold?

The High Court held that the statement in the CIT(A)'s order, "Neither has the appellant given any cogent arguments in the appeal papers to controvert the findings of the A.O.?", was without any reasons whatsoever and would have provided the ITAT with another ground for setting aside the order. The Tribunal's action of setting aside the CIT(A)'s order and directing it to decide the appeal on merits after affording a proper opportunity of hearing to the assessee was considered appropriate. The High Court found that neither party could have a grievance against such an order, as it allowed for another round of proceedings before the CIT(A). Therefore, no substantial question of law arose for the High Court's consideration. The operative direction was to remand the matter back to the CIT(A) for a decision on merits.

What were the facts?

The Revenue filed an appeal before the High Court of Delhi against an order dated October 12, 2007, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had allowed the assessee's appeal, setting aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) had dismissed the assessee's appeal for non-appearance. The ITAT held that the CIT(A) should have decided the appeal on merits, even in the absence of the assessee. The Revenue contended that the CIT(A)'s order also mentioned dismissal on merits. The High Court noted that the CIT(A)'s reasoning for dismissal on merits was without cogent arguments from the assessee. The ITAT had directed the CIT(A) to decide the appeal on merits after providing a proper hearing opportunity.

What were the issues?

1. Whether the ITAT was justified in setting aside the CIT(A)'s order of dismissal for non-appearance and directing a decision on merits, considering the CIT(A)'s observation that the assessee had not provided cogent arguments to controvert the Assessing Officer's findings (mixed question of law and fact). Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. The ITAT's reasoning, as stated in the facts, was that the CIT(A) should have decided the appeal on merits. The High Court itself commented on the CIT(A)'s reasoning being without cogent arguments. Revenue's Contention: The Revenue argued that the CIT(A)'s order also indicated a dismissal on merits, as evidenced by the statement in paragraph 7 of the CIT(A)'s order: "Neither has the appellant given any cogent arguments in the appeal papers to controvert the findings of the A.O.?"

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 03.07.2008 . Present: Ms Prem Lata Bansal for the Appellant. . + ITA 656/2008 . This appeal has been filed by the revenue against the order dated 12.10.2007 passed by the Income Tax Appellate Tribunal in ITA No. 4134/Del/05 in respect of the assessment year 2002-2003. The short ground on which the assessee?s appeal before the Tribunal was allowed was the fact that the CIT(A) had dismissed the assessee?s appeal for the reason of his non-appearance. The Tribunal has taken a view that the CIT(A) should not have dismissed the same only for that reason but should have also decided the issues raised in the grounds of appeal before him on merits. The learned counsel for the appellant points out that in paragraph 7 of the order passed by the CIT(A) there is a statement which indicates that the appeal had been dismissed on merits also. The statement reads as under:- ?Neither has the appellant given any cogent arguments in the appeal papers to controvert the findings of the A.O.? In our view such a statement is without any reasons whatsoever and would have also given the Tribunal another ground for setting aside the order. In any event, all that the Tribunal has done is to have set aside the order passed by the CIT (A) and directed that he should decide the appeal on merits after affording proper opportunity of hearing to the assessee. The revenue as well as the assessee have another round before the Commissioner of Income Tax (Appeals). Neither party can have a grievance against such an order. No substantial question of law arises for consideration of this Court. This appeal is dismissed. BADAR DURREZ AHMED, J . . . RAJIV SHAKDHER, J July 03, 2008 SR . . 22

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