PATHIK TRADES P.LTD,MUMBAI vs. ITO WD 8(2)(4), MUMBAI

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ITA 2778/MUM/2013Status: DisposedITAT Mumbai03 August 2016AY 2004-054 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that an appellate authority must pass speaking orders, even when proceeding ex-parte. The CIT(A)'s order was quashed for failing to record reasons.

What were the facts?

The assessee's appeal against a penalty order was dismissed ex-parte by the CIT(A) without recording reasons. The assessee did not appear or provide evidence before the CIT(A).

What were the issues?

Whether an appellate authority can dismiss an appeal ex-parte without recording reasons. The requirement for quasi-judicial authorities to pass speaking orders.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ C ” BENCH, MUMBAI

Before: SHRI MAHAVIR SINGH, JM & SHRI SANJAY ARORA, AM

Hearing: 04/07/2016Pronounced: 03/08/2016

सुनवाई क" तार"ख /Date of Hearing : 04/07/2016 घोषणा क" तार"ख /Date of Pronouncement : 03/08/2016 आदेश / O R D E R PER BENCH:

This is an appeal by the assessee challenging the order dated 15.1.2013 passed by the CIT(A)-17 in Appeal No. CIT(A)-17/IT-33/2011-12. The assessment was completed by the ITO Ward 8(2)(4) Mumbai, u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dated 22/12/2006 for AY 2004-05. The penalty under dispute was levied by ITO Ward8(2)(4) Mumbai, u/s 271(1)(c) of the Act vide his order dt. 25/03/2011. 2 2. Only ground taken by the assessee is as under:

1. The AO and the learned CIT (A) have erred in fact and in law by levying the penalty of Rs.25,73,596/- u/s 271

3.

None appeared on behalf of the assessee despite service of notice.

However, finding that the matter can be proceeded with in the absence of the assessee, we are doing so.

4.

Heard the ld.DR and perused the material available before us on record including the orders of authorities below. It has come to our notice that the ld.CIT(A) has noted down that during the proceedings, the proceedings that the assessee was non-co-operative in prosecuting before him and no evidence was forthcoming from the assessee to interfere with the order passed by the AO. While upholding the penalty order, the ld.CIT(A) relied on the judgment of Hon’ble Gujarat High Court in the case of Ashwinbhai B Pokiya V/s ACIT in of 2011 and accordingly, he dismissed the appeal ex-parte.

5.

It could be seen from the order of ld.CIT(A) that the assessee did not enter into any appearance or produced any evidence, thereby forcing the ld. CIT(A) to proceed in his absence. On this aspect no reasons are recorded by the ld.CIT(A) so as to guide us to test the veracity or merits of such order in this appeal. It is an elementary rule of law that even in the absence of a statutory provision requiring recording of reasons in support of the orders, the quasi-judicial authority must pass speaking orders so as to stand the test 3 of scrutiny. Thus, an order passed by an appellate authority dismissing an appeal without recording reasons is liable to be quashed.

6.

Nothing compelled the ld. CIT(A) to pass a cryptic order or not to advert to the merits of the case as could be found on the record, even in the absence of the assessee. Not recording the reasons prevents this Tribunal from scrutinizing the order of ld.CIT(A) thereby compels this Tribunal to set aside the same, restoring the matter to the file of ld. CIT(A) for fresh disposal according to law by way of speaking order, after giving reasonable and fair opportunity of being heard to the assessee. It does not mean that the ld.CIT(A) shall not proceed in the absence of assessee but even while proceeding the case ex-parte he shall record the reasons of his conclusion in the matter.

7.

In view of this matter, we set aside the order of ld.CIT(A) for fresh disposal by way of speaking order after giving fair and reasonable opportunity of hearing to the assessee.

8.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 3rd August, 2016 (SANJAY ARORA) (MAHAVIR SINGH ) लेखा सद"य / Accountant Member "या"यक सद"य / Judicial Member मुंबई Mumbai; "दनांक Dated : 03rd August,2016 4 PS: AG(on tour)

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