2021 (11) TMI 1192 - HC - Income Tax

Non speaking order of ITAT - Disallowance of payment of Income Tax paid on deemed income u/s 11(3) as a deduction or application of the income of the current year - as argued ITAT has stated that they have given thoughtful consideration to the findings of CIT(A) and thereafter without recording reasons as to why the appeal is being dismissed the ITAT jumped to the conclusion that there is no infirmity in the order impugned before it. HELD THAT - Only short and cryptic reason assigned is that the present case is not a case of change of accounting system which is not sufficient to disclose the mind of the ITAT while deciding the appeal. Reasons are the bridge between the facts circumstances on one side and the conclusion on the other in absence of which a judicial order becomes a lifeless piece of paper. As relying on KRANTI ASSOCIATES PVT. LTD. VERSUS MASOOD AHMED KHAN 2010 (9) TMI 886 - SUPREME COURT and the principles of natural justice this Court has no hesitation to hold that the impugned order passed by the Income Tax Appellate Tribunal is non-speaking. Least that is expected of an appellate judicial authority vested with such wide powers is to record reasons so that it s mind is disclosed thereby informing the aggrieved person the exact reasons behind the conclusion and thus in the process facilitating availing of remedy before the higher forum. The impugned order passed by ITAT is set aside.

Summary

Issues:
Challenge to the order of the Income Tax Appellate Tribunal on grounds of being non-speaking.

Analysis:
The appellant filed an Income Tax Appeal under Section 260-A of the Income Tax Act, 1961, challenging the order passed by the Income Tax Appellate Tribunal, Indore Bench, which dismissed the appeal of the assessee. The main contention raised by the appellant was that the impugned order of the Tribunal was non-speaking. The appellant argued that the order did not contain sufficient reasons to disclose the mind of the appellate authority, thus violating the principles of natural justice. The substantial question of law framed by the Court was whether the impugned order was non-speaking and lacked enough reasons to justify the dismissal of the appeal.

Upon examination of the impugned order, the Court observed that while the order did contain certain sections detailing the grounds of appeal, stages of the case, and contentions of the assessee, it lacked a proper disclosure of the Tribunal's reasoning for dismissing the appeal. The Court emphasized the importance of reasons in judicial decisions, stating that they act as a bridge between facts and conclusions, ensuring transparency and accountability in the decision-making process.

Citing the principles laid down by the Apex Court in previous judgments, the Court reiterated the significance of recording reasons in quasi-judicial decisions to uphold justice and fairness. The Court held that the impugned order of the Tribunal was indeed non-speaking as it failed to provide cogent, clear, and succinct reasons for its decision. Consequently, the Court set aside the Tribunal's order and directed the Income Tax Appellate Authority to pass a fresh speaking order on the appeal, ensuring that the parties are given a proper hearing in accordance with the Income Tax Act.

In conclusion, the Court allowed the appeal on the substantial question of law regarding the non-speaking nature of the Tribunal's order, emphasizing the importance of recording reasons in judicial decisions to maintain transparency, accountability, and the litigants' faith in the justice delivery system.