2012 (10) TMI 480 - AT - Income Tax

Ex party Order passed by CIT(A) - appellant contested against no intimation about service of notice - Held that - As is apparent from the facts of the case, none of the notice dated 21.01.2010, 30- 09.2011, 12.12.2011, 14.02.2012 and 16.04.2012 issued by the CIT(A) appear to have been served upon the assessee nor the DR placed any material regarding service of any of these notices. Also CIT(A) dismissed the appeal without even analyzing the issues or recording his specific findings on the said issues raised in the grounds of appeal before him. This approach of the CIT(A) is not in accordance with law. A mere glance at the impugned order reveals that the order passed by the CIT(A) is cryptic and grossly violative of one of the facets of the rules of natural justice, namely, that every judicial/quasi - judicial body/authority must pass reasoned order, which should reflect application of mind by the concerned authority to the issues/points raised before it. The application of mind to the material facts and the arguments should manifest itself in the order - As CIT(A) has not passed a speaking order on various issues raised before him it is fair and appropriate to set aside the order of the CIT(A) and restore the matter to his file for deciding the issues afresh - in favour of assessee for statistical purposes.

Summary

Issues involved:
1. Ex parte order passed by CIT(A) without proper service of notice and opportunity to the appellant.
2. Justification of estimating income at Rs.3,35,450 without proper opportunity to the assessee.
3. Legality and justification of orders by lower authorities.

Issue 1:
The appeal challenged an ex parte order by CIT(A) without proper notice and opportunity to the appellant. The appellant argued that the order was unjustified due to lack of proper service of notice and genuine reasons for non-response. Additionally, the appellant contended that the order did not conform to provisions of sec. 250(6) of the Income Tax Act, 1961. The Tribunal noted that the CIT(A) dismissed the appeal ex parte after multiple notices without any response from the appellant. The Tribunal found that the CIT(A) did not pass a speaking order on the grounds raised and failed to ensure proper service of notices. The Tribunal emphasized the requirement of reasoned orders by quasi-judicial bodies, as per sec. 250(6), to ensure fairness, clarity, and minimization of arbitrariness in decision-making. Citing legal precedents, the Tribunal set aside the CIT(A) order and directed a fresh disposal of the appeal with sufficient opportunity for both parties, emphasizing the need for a speaking order.

Issue 2:
The second issue revolved around the estimation of income at Rs.3,35,450 without adequate opportunity for the assessee. The AO had added this amount from undisclosed sources after notices went un-responded. The appellant argued that the estimation was arbitrary and disregarded the facts of the case. However, the Tribunal primarily focused on the procedural irregularities and lack of proper consideration of grounds by the CIT(A. The Tribunal's decision to set aside the CIT(A) order for a fresh disposal encompassed a reevaluation of the income estimation issue, emphasizing the importance of a reasoned and lawful decision-making process.

Issue 3:
Regarding the legality and justification of orders by lower authorities, the Tribunal found that the lower authorities' actions were not justified on facts and raised concerns about the dismissal of the appeal without proper representation from the appellant. The Tribunal's decision to allow the appeal for statistical purposes highlighted the procedural deficiencies and the need for a fair and lawful resolution of the case. The Tribunal's emphasis on adherence to legal provisions and principles of natural justice underscored the importance of due process in tax matters.