2015 (10) TMI 922 - AT - Income Tax

Computation of long term capital gains in respect of transfer of the properties - non affecting the necessary adjustments and providing set off for available exemption as challenged by assessee - Held that - CIT(A) has decided the appeal of the assessee briefly by passing a cryptic order without giving any observations findings and basis of conclusion in the impugned order. We further observe that from the observations of the CIT(A) in para 3.3 of the order as reproduced hereinabove it is apparent that the CIT(A) dismissed the appeal without even analyzing the issue or recording his specific findings on the issue raised in the grounds of appeal before him. 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 and every judicial/quasi-judicial body/authority must pass a well-reasoned order which should reflect not only application of mind by the concerned authority to the issue/points raised before it but also adjudication of the issues/grounds raised before it. The application of mind to the material facts and arguments should manifest itself in the order. As we have already observed that the impugned order suffers from lack of reasoning and is not a speaking order on the issue for which the impugned addition was made by the AO and the impugned order is not only cryptic but it is grossly violative of principles of natural justice. In view of foregoing discussion specially when the CIT(A) has not passed a speaking order on the issue raised by the assessee in the appeal before him we find it just and proper to set aside the order of the CIT(A) and restore the matter to his file for deciding the appeal afresh in accordance with law after allowing sufficient opportunity of being heard to both the parties - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing appeal due to technical reasons.
2. Computation of long-term capital gains and availability of exemption.
3. Adequacy of reasoning and speaking order by the CIT(A).

Condonation of Delay:
The appeal was delayed by 69 days due to the incorrect deposit of the appeal fees. The delay was attributed to technical reasons beyond the control of the assessee. The Tribunal, after considering the facts, found the delay justifiable and condoned it in the interest of justice. The delay was not attributed to the assessee, and the appeal was allowed to proceed on merits.

Computation of Long-Term Capital Gains:
The assessee contended that no long-term capital gains (LTCG) should be applicable due to an internal arrangement among co-owners of the property. The AO rejected this explanation, adding LTCG to the assessee's total income. The CIT(A) upheld the AO's decision, stating that the appellant failed to prove that no LTCG accrued and could not substantiate a claim for relief under section 54F. The Tribunal observed that the CIT(A) did not provide a detailed analysis or reasoning in dismissing the appeal, violating principles of natural justice. The matter was remanded to the CIT(A) for a fresh decision, emphasizing the importance of a speaking order with proper reasoning.

Adequacy of Reasoning by CIT(A):
The Tribunal found the CIT(A)'s order lacking in reasoning and not compliant with the requirement to state points for determination, decision thereon, and reasons for the decision. Citing legal precedents, the Tribunal emphasized the necessity of a well-reasoned order to ensure fairness, transparency, and adherence to the rule of law. The lack of reasoning in the CIT(A)'s order led to the decision to set aside the order and remand the matter for a fresh decision with a detailed, speaking order in accordance with the law.

In conclusion, the Tribunal allowed the appeal, setting aside the CIT(A)'s order and remanding the matter for a fresh decision with proper reasoning and compliance with legal requirements. The importance of a speaking order with detailed reasoning was highlighted to ensure fairness and transparency in the decision-making process.