2023 (10) TMI 1466 - HC - Income Tax

Validity of order passed by ITAT u/s 254(1) - HELD THAT - We find that very strong observations have been made against Petitioner. Apart from these observations, directions have been passed to the AO to complete the directions given therein, within 90 days of the receipt of the order. Those directions are contained in paragraph 17(i) to (viii). In our view, these directions could not and in any case should not have been passed because this was an appeal that was filed by assessee and not an appeal that was filed by the Revenue. Having considered the impugned order and the averments made in the Petition, in our opinion, the order passed in the absence of Petitioner has to be quashed and set aside and the matter should be remanded for de-novo consideration. Ordered accordingly.

Summary

Issues:
Petition to quash and set aside ITAT order, representation in ITAT hearing, observations made against Petitioner, directions passed by ITAT, necessity to quash and remand the matter for de-novo consideration.

Analysis:
The Petitioner sought to quash the order dated 31st August 2023 passed by the ITAT under Section 254(1) of the Income-tax Act, 1961, and remand the matter for fresh consideration of the appeals. The Petitioner had filed two appeals before the ITAT against an order passed by the CIT(A) but was unrepresented during the ITAT hearing due to the unwellness of the Chartered Accountant. The ITAT proceeded with the hearing in the absence of the Petitioner and passed the impugned order on 31st August 2023, which led to strong observations against the Petitioner and directions to the Assessing Officer. The High Court noted that these directions should not have been passed as the appeal was filed by the assessee, not the Revenue.

The High Court, after considering the impugned order and the averments made in the Petition, concluded that the order passed in the absence of the Petitioner must be quashed and set aside. The matter was ordered to be remanded for de-novo consideration. The Court emphasized the importance of judges refraining from expressing unnecessary opinions that could prejudice the assessee, as every expression of opinion by the Tribunal could seriously prejudice the assessee. The High Court directed that the Tribunal hearing the matter afresh should not be influenced by the impugned order and clarified that no observations were made on the merits of the Petitioner's pending appeals before the ITAT.

In conclusion, the Petition was disposed of, keeping all rights and contentions of the parties open. The High Court's decision to quash the ITAT order and remand the matter for fresh consideration aimed to ensure a fair and unbiased review of the appeals filed by the Petitioner, emphasizing the need for judicial caution in expressing opinions that could adversely impact the assessee.