Principal Commissioner Of Income Tax 1 vs. M/S Shree Developers

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SHEEL NAGU & HON’BLE SHRI JUSTICE VIRENDER SINGH INCOME TAX APPEAL No. 59 of 2018

BETWEEN:- PRINCIPAL COMMISSIONER OF INCOME TAX 1, JABALPUR (MADHYA PRADESH) .....APPELLANT (BY SHRI SANJAY LAL -ADVOCATE) AND M/S SHREE DEVELOPERS, 2632, WRIGHT TOWN, JABALPUR (MADHYA PRADESH) .....RESPONDENT (RESPONDENT BY SHRI SAPAN USRETHE- ADVOCATE) ----------------------------------------------------------------------------------------- Reserved on : 28.11.2022 Pronounced on : 13.03.2023 ---------------------------------------------------------------------------------------- This appeal having been heard and reserved for orders, coming on for pronouncement this day, Hon’ble Shri Justice Sheel Nagu pronounced the following: - 2 - ORDER Instant appeal preferred u/S.260-A of the Income Tax Act, 1961 assails the legality, validity and propriety of final order dated 07.11.2017 in IT(SS)A. No.77/JAB/2013 by Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur pertaining to assessment years 2004-05, 2007-08 and 2008-09. 2. Learned counsel for the appellant/Revenue, Shri Lal as well as for the assessee, Shri Usrethe are heard on the question of admission. 3. This appeal has not yet been admitted. 4. The substantial questions of law proposed by the Revenue are as follows:- (1) Whether, on the facts and in the circumstances of the case and, in law, the ITAT erred in sustaining the order of CIT(A) who has deleted the addition of Rs.9,75,000/- (proportionate addition) made by the AO on account of profit of sale of 23 Duplex Houses without appreciating the documents seized in the search and seizure proceedings? (2) Whether, on the facts and in the circumstances of the case and, in law, the ITAT erred in sustaining the order of CIT(A) who has allowed relief of Rs.3,89,00,000/- on account of profit on sale of land without appreciating the documents seized in the search and seizure proceedings? - 3 - (3) Whether, on the facts and in the circumstances of the case and, in law, the ITAT erred in sustaining the order of CIT(A) who has deleted the addition of Rs.11,75,00,000/- on account of unaccounted investment in plot/land without appreciating the documents seized in the search and seizure proceedings without appreciating the documents seized in the search and seizure proceedings? (4) Whether, on the facts and in the circumstances of the case and, in law, the ITAT erred in not appreciating the fact that the loose papers were found and seized from the assessee and the assessee was unable to explain the same during the assessment proceedings? (5) That the ITAT has committed an error in deleting the aforesaid additions made by Assessing Officer (A.O.), without taking note of the facts & documents on the record, hence the order passed by ITAT is perverse and deserves to be quashed. 5. Learned counsel for the appellant/Revenue has brought to the notice of this Court an order passed on 17.11.2021 in ITA. No.10/2021 whereby this Court finding the order of Income Tax Tribunal to be non speaking allowed said ITA of the assessee on that ground alone and remanded the matter to Income Tax Appellate Tribunal for passing speaking order. 6. Relying upon the aforesaid order passed in ITA. No.10/2021, learned counsel for rival parties are at consensus that the findings rendered by the Tribunal in respect of assessment year 2004-05 are non speaking. - 4 - 7. Considering the aforesaid submission, it is seen from the impugned order of Tribunal dated 07.11.2017 (Annexure A/3) that in respect of assessment year 2004-05 the Tribunal while considering the first ground in Para 4 has summarized the facts and has reproduced the findings of the first Appellate Authority in extenso. In Para 5, the Tribunal reproduced conclusion of CIT(A) and in Para 6 following findings have been rendered by the Tribunal:- “6. We have perused the case records, analyze the facts and circumstances in the case and we find that the learned CIT (A) was appraised of the entire situation through the submission of the assessee which is on record as appearing in the order of the learned CIT(A) and it was correctly held by the learned CIT(A) that the addition of Rs.9.75 lac was found to be without any basis and as such we do not find any infirmity with findings of the learned CIT(A) and the relief granted to the assessee is hereby sustained.” 7.1 As regards the other ground in respect of same assessment year 2004-05, the Tribunal summarizing the ground in Para 7 reproduced the findings of CITA whereas in Para 8 it records its findings in the following manner:- “8. We have perused the case records, heard the rival contentions and we find that the learned CIT(A) out of addition of Rs.49,13,763/- gave relief of Rs.37,44,344/- and sustained addition of Rs.1169419/- which appears to be reasonable and even in consonance with the rational and reasoning adopted by the AO. We do not find any infirmity with the findings of the learned CIT(A) and accordingly the relief granted to this extent by the learned CIT(A) is accordingly sustained.” - 5 - 8. From the above, it is palpable that Tribunal in fact has not recorded any independent finding/reasons in respect of both the grounds raised by the assessee and thus, order of Tribunal to the extent it relates to assessment year 2004-05 is violative of principle of natural justice being non speaking. 8.1 A non speaking order not only prevents the adversely affected persons to know the exact reasons behind the conclusion arrived at but also disables the aggrieved person from effectively availing remedy before the Higher Forum. 9. In view of above, this Court frames following new substantial question of law:- “Whether the Tribunal fell in grave error of law in failing to record reasons and findings in regard to assessment year 2004- 05.” 10. In view of above discussion, aforesaid newly framed substantial question of law is answered in affirmative that the Tribunal failed to record reasons and findings in respect of assessment year 2004-05. 11. Accordingly, the appeal preferred by the Revenue is allowed to the following extent:- (i) Impugned order dated 07.11.2017 in IT(SS)A. No.77/JAB/2013 by Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur is set aside for being non speaking in respect of assessment year 2004-05. - 6 - (ii) The matter stands remanded to Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur for passing speaking order in IT(SS)A. No.77/JAB/2013 in respect of assessment year 2004-05. (iii) In case composition of the Tribunal has since undergone change, speaking order be passed after hearing counsel for rival parties. 12. After complying with this order the Revenue shall be at liberty, if so advised, to raise all contentions and grounds not decided hereinabove. 13. With the aforesaid directions, present ITA stands allowed without cost. (SHEEL NAGU) (VIRENDER SINGH) JUDGE JUDGE mohsin Digitally signed by MOHAMMED MOHSIN QURESHI Date: 2023.03.14 10:31:14 +05'30'