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Facts
The assessee appealed against the order of the CIT(A) for assessment years 2017-18. The assessee challenged the determination of taxable income and the validity of the assessment order, alleging non-compliance with procedural requirements and improper conversion from limited to complete scrutiny.
Held
The Tribunal found that the CIT(A)'s order was a non-speaking order and lacked application of mind. It failed to consider the grounds raised by the assessee regarding procedural legality and the conversion of scrutiny. The Tribunal set aside the order and restored the matter for de novo adjudication.
Key Issues
Whether the assessment order and the CIT(A)'s order were passed in accordance with the law, considering procedural compliance and proper adjudication of grounds.
Sections Cited
129 r.w.s 143(2), 143(3), 250
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed against the order bearing DIN & Order No.ITBA/APL/S/250/2023-24/1062759877(1) dated 16.03.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), for the assessment years 2017-18. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 16.03.2024 passed by First Appellate Authority, Bengaluru.
2.0 The grounds of appeal no.1 to 8 are regarding challenge to determination of taxable income at Rs.8,17,080/- as against returned income of Rs.2,17,080/-. The assesse has taken legal grounds of invalidity of assessment order per se on account of non-compliance of provision 129 r.w.s 143(2) as well as challenged merits of the addition. The assesse has also challenged validity of the assessment order on the premise that even though the case was one of limited scrutiny category, the Ld. AO converted it to , complete scrutiny without taking prior mandatory approval of his supervisory authority. The Ld. Counsel for the assesse drew our attention to the order of the Ld. CIT(A) wherein the order of the Ld. AO has been confirmed on the premise of non- submission of details and availment of opportunities. The Ld. DR relied upon the order of authorities below.
3.0 We have heard rival submissions in the light of material available on records. The order of the Ld. CIT(A) has been found to be suffering from deficiencies of being a non-speaking order. In para-5 of the order Ld. CIT(A) has stated as under:-
“…. Even though Form-35 mentions that he appeallant relied upon all the books of accounts, ledger, copies, statements, letters, agreements and supporting papers produced before the assessing officer and all the replies filed before her in response to queries raised during assessment proceedings, nothing was produced during appellate proceedings.
This is limited scrutiny assessment completed u/s 143(3) of the act to examine the claim of huge agricultural income.
The appellant did not make any written submissions either. In the absence of the same, it is to be held that the appellant is not interested in providing the grounds agitated for the onus rests on the appellant.
For these reasons despite fair opportunities of being heard provided were provided not utilized and the appellant sought only adjournments citing one reason or the other, the stand of the AO in taxing the income claimed exempt does not call for interference….”
4.0 It has been noted that the observations of Ld. CIT(A) are not inconformity with the facts on records. There is nothing in the appellate order to indicate as to when and how many opportunities were provided to the assesse. The Ld. CIT(A) has observed that it is a limited scrutiny case to examine claim of huge agricultural income without appreciating that the assesse had challenged conversion of limited to complete scrutiny issue in its grounds of appeal extracted by the appellate authority on page-4 of his order. The Ld. CIT(A) also failed to consider the challenge to the legality of the assessment order qua section 129 r.w.s 143(2) even though he has extracted the grounds of appeal on page-4 of his order. The observation that the assesse did not make any written submissions also appeared to be incorrect as the Ld. CIT(A) has himself extracted statement of facts on page-2 – 3 of his order which could have been considered to give some finding qua merits of the addition. Thus, the Ld. CIT(A) has passed an order without any application of mind. Be that as it may be we are of the view that ends of justice would be met if the matter is restored back to the file of the Ld. First Appellate Authority of de novo adjudication of the appeal. Accordingly, the order of Ld. CIT(A) is set aside with the directions to readjudicate the appeal afresh after giving all opportunity of being heard to the assesse. The assesse is directed to make necessary compliance to the notices and provide the Ld. CIT(A) with all required details. Accordingly, all the grounds of appeal 1 to 8 raised by the assesse are allowed for statistical purposes.