2019 (12) TMI 320 - HC - Income Tax

Denial of natural justice - dismissal of appeal except by stating that he is of the considered view that the Assessing Officer's order is a self speaking order and does not call for any interference - HELD THAT - In this case, the Appellate Authority, after extracting the order of the Assessing Officer in full, has not given any other reason or finding to dismiss the appeal except by stating that he is of the considered view that the Assessing Officer's order is a self speaking order and does not call for any interference. In my considered view, such single line finding of the Appellate Authority, cannot be sustained as a proper exercise of the Appellate Authority, while disposing the appeal. Therefore, it is apparent that the order impugned in this writ petition is an outcome of total non-application of mind. Consequently, the impugned order cannot be sustained. It is further contended that before passing the order, the petitioner was not heard. Writ Petition is allowed and the impugned order is set aside and the matter is remitted back to the first respondent for passing fresh order on merits and in accordance with law, after giving an opportunity of hearing to the petitioner.

Summary

Issues:
Challenge to order of assessment under the Income Tax Act, 1961 for the assessment year 2016-17, appeal before the First Appellate Authority, dismissal of appeal, non-application of mind, non-speaking order, opportunity of hearing not provided.

Analysis:

1. The petitioner challenged the order of assessment passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961 for the assessment year 2016-17 by filing an appeal before the First Appellate Authority. The First Appellate Authority dismissed the appeal on 28.06.2019, leading to the filing of a writ petition. The main contention raised in the petition was that the order of the Appellate Authority was passed without proper application of mind and without providing an opportunity of hearing, making it a non-speaking order.

2. The petitioner's counsel argued that the impugned order was unsustainable on any account due to lack of proper reasoning and findings. On the other hand, the Senior Standing Counsel for the respondents admitted that the Appellate Authority did not provide independent reasons for dismissing the appeal. The court observed that the Appellate Authority is mandated to pass a speaking order on merits after considering the grounds raised in the appeal, expressing reasons and findings in support of the conclusion.

3. The court noted that the Appellate Authority failed to provide any reasons or findings apart from mentioning that the Assessing Officer's order was self-explanatory and did not require interference. Such a brief finding was deemed insufficient to demonstrate a proper application of mind, indicating a total non-application of mind. The court emphasized the importance of the Appellate Authority giving due consideration to the facts, objections raised, and expressing detailed reasons and findings in the order.

4. In light of the above observations, the court allowed the writ petition, setting aside the impugned order and remitting the matter back to the First Appellate Authority for a fresh order. The court directed the Appellate Authority to pass a speaking order with reasons and findings after providing an opportunity of hearing to the petitioner. It was clarified that the court was not expressing any opinion on the merits of the petitioner's claim, leaving it to the Appellate Authority to decide within eight weeks from the date of receipt of the court's order. No costs were awarded, and the connected miscellaneous petition was closed.