Case Law Details
PCIT Vs Ashokji Chanduji Thakor (Gujarat High Court)
Gujarat High Court, in the case of PCIT Vs. Ashokji Chanduji Thakor, addressed appeals filed by the Revenue against an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad. The ITAT had remanded the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication, despite the assessee’s failure to respond to notices or appear before the CIT(A). The Revenue challenged this decision, arguing that the ITAT’s order lacked sufficient reasoning.
The High Court referenced its earlier ruling in Tax Appeal No. 710 of 2018 and connected appeals, where it had reversed a similar ITAT order. The court noted that the Tribunal had exercised its discretion improperly, as the assessee had been non-cooperative throughout the proceedings. Despite multiple opportunities, the assessee had neither filed a response nor appeared before the AO or CIT(A). Consequently, the AO added the amount as unexplained investment, a decision later upheld by the CIT(A).
The High Court emphasized that once CIT(A) had adjudicated the matter on merits, ITAT should not have interfered without assigning valid reasons. The court observed that remanding the matter back for fresh consideration was unjustified, particularly when the assessee had repeatedly failed to present his case. It reaffirmed that the addition made by the AO and sustained by CIT(A) was legally justified, given the absence of any explanation from the assessee regarding the investment in question.
Accordingly, the High Court set aside the ITAT’s order and restored the AO and CIT(A)’s decisions, allowing the appeals in favor of the Revenue. This judgment reinforces the principle that non-cooperation by the assessee cannot be a ground for remanding cases unnecessarily, ensuring that procedural fairness does not lead to unwarranted delays in tax assessments.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
Both these appeals are filed by the Revenue. Revenue has challenged the judgment of the Income Tax Appellate Tribunal, Ahmedabad [“Tribunal” for short] dated 27th December 2017 by which the Tribunal was pleased to remand the proceedings before the CIT [A] for fresh adjudication. The Tribunal noted that despite service of notices, before CIT [A] no one appeared on behalf of the assesses. No written response was also made. Despite this, the Tribunal placed the matter back before the CIT [A] for fresh consideration.
We may noticed that in case of the group of assesses, this Court in Tax Appeal No. 710 of 2018 and connected appeals, by judgment dated 27th June 2018 had reversed such a view of the Tribunal. The Court was of the opinion that the Tribunal had exercised its discretion without stating reasons. Eventually, the Court made the following observations :
“8.0. It is required to be noted that in the present case right from very begging i.e. assessment proceeding, assessee was non cooperative. Number of opportunities were given by the AO, however assessee did not cooperate and even did not file any reply. Therefore, considering the material on record, the AO made addition as unexplained investment. Even before the learned CIT(A) also the assessee was non cooperative. Number of opportunities were given to the assessee to represent his case, however none remained present on behalf of assessee. Thereafter, the learned CIT(A) proceeded further with the appeal ex parte and decided the appeal on merits and confirmed the order passed by the AO confirming additions of unexplained investment. Thus, even learned CIT(A) also decided the matter on merits. On going through the orders passed by the AO as well as learned CIT(A), we are of the opinion that in absence of any explanation by the assessee on the investment in question, AO was justified in making the addition of unexplained investment and thereafter learned CIT(A) was justified in confirming the same. Therefore, even the order passed by the learned CIT(A) which was on merits was not required to be interfered with by the learned CIT(A) and ought not to have been quashed and set aside without assigning any reasons. Under the circumstances, the impugned orders passed by the learned Tribunal cannot be sustained.
9.0. In view of the above and for the reasons stated above, the questions of law are answered in favour of the Revenue and against the assessee and impugned common judgment and order passed by the learned Tribunal in IT(SS) A No.117/AHD/2015 to IT(SS) A No.122/AHD/2015 is hereby quashed and set aside and the orders passed by the AO as well as learned CIT(A) are restored. All the appeals are allowed accordingly. No costs.”
In the result, these Tax Appeals are also allowed.
Impugned common order of the Tribunal is setaside.
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