2023 (3) TMI 1428 - HC - Income Tax

Validity and propriety of final order passed by ITAT - allegation of passing non- speaking order - ITAT sustaining the order of CIT(A) who has deleted the addition on account of profit of sale of 23 Duplex Houses, profit on sale of land, unaccounted investment in plot/land and concluding loose papers were not found and seized from the assessee - HELD THAT - Tribunal in fact has not recorded any independent finding/reasons in respect of both the grounds raised by the assessee and thus, order of Tribunal to the extent it relates to assessment year 2004-05 is violative of principle of natural justice being non speaking. A non speaking order not only prevents the adversely affected persons to know the exact reasons behind the conclusion arrived at but also disables the aggrieved person from effectively availing remedy before the Higher Forum. This Court frames following new substantial question of law - Whether the Tribunal fell in grave error of law in failing to record reasons and findings in regard to assessment year 2004- 05. In view of above discussion, aforesaid newly framed substantial question of law is answered in affirmative that the Tribunal failed to record reasons and findings in respect of assessment year 2004-05. Thus Impugned order of Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur is set aside for being non speaking in respect of assessment year 2004-05 and remanded to Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur for passing speaking order.

Summary

Issues Involved:
- Legality, validity, and propriety of final order dated 07.11.2017 in IT(SS)A. No.77/JAB/2013 by Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur pertaining to assessment years 2004-05, 2007-08 and 2008-09.

Comprehensive details of the judgment for each issue involved:

1. Issue 1: Whether the ITAT erred in sustaining the order of CIT(A) regarding the addition of profit from the sale of duplex houses.
- The ITAT sustained the order of CIT(A) who deleted the addition of Rs.9,75,000 on account of profit from the sale of 23 Duplex Houses without appreciating the seized documents.

2. Issue 2: Whether the ITAT erred in sustaining the order of CIT(A) regarding the relief on profit from the sale of land.
- The ITAT sustained the order of CIT(A) who allowed relief of Rs.3,89,00,000 on account of profit on the sale of land without appreciating the seized documents.

3. Issue 3: Whether the ITAT erred in sustaining the order of CIT(A) regarding unaccounted investment in plot/land.
- The ITAT sustained the order of CIT(A) who deleted the addition of Rs.11,75,00,000 on account of unaccounted investment in plot/land without appreciating the seized documents.

4. Issue 4: Whether the ITAT erred in not appreciating the loose papers found and seized from the assessee.
- The ITAT did not appreciate the fact that loose papers were found and seized from the assessee, and the assessee was unable to explain the same during the assessment proceedings.

5. The High Court found that the Tribunal's order for the assessment year 2004-05 was non-speaking, violating the principle of natural justice by not providing independent findings or reasons. The Court framed a new substantial question of law regarding this issue and concluded that the Tribunal failed to record reasons and findings for this assessment year. Consequently, the appeal by the Revenue was allowed, setting aside the Tribunal's order for being non-speaking and remanding the matter for a speaking order. The Court directed that if the composition of the Tribunal has changed, a speaking order should be passed after hearing both parties. The Revenue was given the liberty to raise any contentions not decided in the current order. The ITA was allowed without cost following these directions.