Section 250(6) Mandates Speaking Appellate Orders After Adequate Hearing: ITAT Jaipur

Ram Borewell & Construction Company Vs ACIT (ITAT Jaipur)

The ITAT Jaipur considered the assessee’s appeal against the order of the CIT(A) for Assessment Year 2011-12 arising from an assessment under Section 143(3) read with Section 254 of the Income-tax Act. The assessee, a partnership firm engaged in civil construction, challenged the ex parte dismissal of its appeal by the CIT(A) for alleged non-prosecution.

The Tribunal noted that the first hearing before the CIT(A) was fixed on 31.10.2018 and the appeal was dismissed on 03.12.2018. During this period, the assessee had sought adjournments on three occasions, all of which were granted. The Tribunal found that the reasons furnished for the adjournments were reasonable and justified, as the assessee was collecting details and preparing submissions. It further observed that this was not a case of complete non-compliance and that the CIT(A) had not issued a final opportunity warning that the appeal would be decided ex parte in the event of further non-compliance.

The Tribunal also found that the CIT(A) had not adjudicated the grounds of appeal on merits. Referring to Section 250(6), it held that the CIT(A) is required to pass a speaking order in writing containing reasons for the conclusions reached. Since the impugned order did not satisfy the statutory requirement under Section 250(6), it could not be sustained.

Accordingly, in the interest of justice, the Tribunal set aside the ex parte order and restored the matter to the file of the CIT(A) for fresh adjudication on merits after providing the assessee an opportunity of hearing. The assessee was directed to appear before the CIT(A) within two months from receipt of the Tribunal’s order. The Tribunal further clarified that, in the event of any failure by the assessee to appear, the CIT(A) would be at liberty to decide the appeal after considering the material available on record. The appeal was allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT JAIPUR

This is an appeal filed by the assessee against the order of ld.CIT(A)-IV, Jaipur dated 04/12/2018 for the A.Y. 2011-12 in the matter of order passed U/s 143(3) read with Section 254 of the Income Tax Act, 1961 (in short, the Act).

2. Rival contentions have been heard and record perused. Facts in brief are that the assessee, a partnership firm, is a civil contractor, engaged in civil construction work. The return of income was filed declaring total income of Rs. 16,69,040/-. The A.O., however, completed the assessment at total income of Rs. 1,74,70,140/- U/s 143(3) r.w. Section 254 of the Act.

3. Against the order of the A.O., the assessee approached to the ld. CIT(A). In its order at page 3 and 4, the ld CIT(A) observed that on three occasions, the assessee has asked for adjournment and on 03/12/2018, the ld. CIT(A) dismissed the appeal for non-prosecution.

4. It was prayed by the ld AR of the assessee that no sufficient opportunity was given to the assessee. He has invited our attention tothe fact that on first time, the case was fixed before the ld. CIT(A) on 31/10/2018, which was decided by him on 03/12/2018. On all the earlier three occasions, the assessee has asked for adjournment on reasonable and valid grounds. Accordingly, it was prayed that the matter should be restored to the ld. CIT(A) for deciding on merit.

5. On the other hand, the ld DR has relied on the orders passed by the lower authorities.

6. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that the ld. CIT(A) has passed ex parte order on 03/12/2018 by alleging that on given opportunities, no compliance was made by the assessee.

However, we found that on all three occasions, the assessee has requested for adjournment and the same was granted. The reasons for adjournment appear to be reasonable and justified. It is also clear from the order of the ld. CIT(A) that within two months from the first date fixed for hearing, he decided the appeal by dismissing the same. Even final opportunity was not given by the ld. CIT(A) asking the assessee for passing ex parte order in case of non-compliance. We found that since the assessee was collecting details and preparing the submissions, adjournment were sought by him. It is also not a case of complete non­compliance. We also found that even the ld. CIT(A) has not adjudicated the grounds raised by the assessee on merits. As per provisions of Section 250(6) of the Act, the ld. CIT(A) is required to pass a speaking order in writing giving reasons for reaching to the conclusion. However, the order passed by the ld. CIT(A) are not in terms of Section 250(6) of the Act. Therefore, in the substantial interest of justice, we set aside the ex parte order of the ld. CIT(A) and restore the matter back to the file of the ld. CIT(A) for deciding the issue afresh on merits. The assessee is also directed to appear before the ld. CIT(A) within two months from the date of receipt of this order. In case of any failure on the part of the assessee, the ld. CIT(A) is at liberty to pass order after considering the material placed on record.

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

Order pronounced in the open court on 03^rd June, 2019.