Case Law Details
G. Sekar Vs ITO (ITAT Chennai)
Summary: In the case of G. Sekar vs. Income Tax Officer (ITO), the Income Tax Appellate Tribunal (ITAT) Chennai remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for reassessment. The appeal arose from a 2023 order issued by CIT(A) concerning the 2017-18 assessment year. The primary issue was the taxable income determination at Rs. 8,17,080, which the assessee contested, claiming it should have been Rs. 2,17,080. Additionally, the assessee argued that the original assessment had procedural lapses. Specifically, the case was escalated from limited scrutiny to full scrutiny without prior approval from supervisory authorities, violating procedural mandates under Section 143(2) and related provisions. The assessee also contended that the CIT(A) failed to consider evidence, instead dismissing the case based on alleged non-submission of details.
Upon review, ITAT noted that the CIT(A)’s order lacked substantive findings, labeling it a “non-speaking order” that did not adequately address the appellant’s arguments or provide details on hearings granted to the assessee. Moreover, the CIT(A) had overlooked the legality of converting the case to full scrutiny and inconsistently referenced facts about submissions and documents provided by the assessee. These procedural deficiencies led ITAT to conclude that the CIT(A) had not applied sufficient scrutiny or analysis in reviewing the case. Consequently, ITAT remanded the matter to CIT(A) for de novo adjudication, mandating a fresh review with due consideration of all submissions.
ITAT directed CIT(A) to conduct a comprehensive reassessment, allowing the assessee ample opportunity to present relevant documents and evidence. This reassessment aims to ensure procedural accuracy and address the contested grounds, including scrutiny scope and income determination. The decision emphasizes adherence to procedural norms in tax assessments and highlights ITAT’s commitment to fair review standards in appeals.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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.
5.0 In the result, the appeal of the assesse is allowed for statistical purposes.
Order pronounced on 23rd , October-2024 at Chennai.
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