Case Law Details
Case Name : Ashapura Stone Industries Vs ITO (ITAT Ahmedabad)
Related Assessment Year : 2012-2013
Courts :
All ITAT ITAT Ahmedabad
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Ashapura Stone Industries Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad pulls up CIT(A) for ignoring remand directions; Restores bogus purchase addition dispute for fresh adjudication
Ahmedabad ITAT came down strongly on the CIT(A) for failing to comply with binding remand directions issued in an earlier order, terming the lapse a “gross dereliction of statutory duty” & contrary to judicial discipline.
Assessee, engaged in quarrying & trading of stone products, had advanced ₹50 lakh to M/s Umiya Industries for purchase of mac
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A question may arise in the minds of the readers as to why ITAT could not have decided the case, in assessee’s favour, basis the facts already available with it &merits when it knew the Revenue has not only failed to do what was obvious but even didn’t follow its directions
The authors views are like this :
1) ITAT is an appellate fact-finding body but only within the record: ITAT’s role u/s 254(1) is to decide an appeal on the basis of the material before it or after admitting additional evidence in compliance with procedure (Rule 29). In this case, the earlier remand directions required fresh evidence gathering ; e.g. cross-examination of the supplier, bank officer’s statement. These were not merely formalities , they could directly influence findings of fact.
If ITAT decided without that evidence, it would be speculating rather than adjudicating on a complete record.
2) Principle of natural justice ;both sides must get opportunity: Even if the Revenue has been grossly negligent, ITAT is bound to give them a fair chance to produce the evidence that could support their case. Deciding straightaway for the assessee would be seen as foreclosing Revenue’s statutory right to present evidence — opening the order to challenge in High Court as being contrary to fair procedure.
3) Jurisdictional discipline ; remand is not punishment: A remand is meant to complete the record, not to penalise the authority for disobedience. ITAT cannot treat failure to comply as an automatic win for the assessee unless a) The burden of proof lies entirely on the Revenue & b) There is already enough evidence on record to conclusively rebut the addition.
Here ITAT seems to have felt that decisive factual findings could not be reached without the remand-ordered evidence
4) Avoiding High Court reversal: If at all ITAT had decided in the assessee’s favour purely because the CIT(A) ignored directions, High Court could reverse the decision saying the Tribunal decided without full facts. By remanding again, ITAT protects its order from being struck down for lack of evidentiary completeness.