2019 (8) TMI 618 - HC - Income Tax

Addition u/s 68 - unsecured loans - non consideration of evidence produced by assessee - HELD THAT - There was no application of mind by the Authorities while arriving at a decision insofar as this issue is concerned. It is the specific case of the assessee that the letter of confirmation Annexure-B series issued by various persons to establish the hand loans received by the assessee has not been considered. It is apparent that this specific issue relating to the documents furnished by the assessee has not been addressed by the Authorities albeit a specific ground raised in the appeal memo. It is well settled law that reasons are the heart beat/soul of an order. Any order passed by the quasi judicial Authority sans reasons is void ab initio. The cryptic orders passed by the Assessing Authority as well as the Appellate Authority cannot be approved. It is necessary for the quasi judicial authorities to pass a speaking order giving reasons for the decision while arriving at a decision. Reasons would reflect the mind of the quasi judicial authorities and the same would be helpful to the appellate Forums while adjudicating upon such orders. In the absence of reasons, both the orders at Annexures- A and C deserve to be set aside.

Summary

Issues:
Challenging order dismissing appeal under Section 250 of the Income Tax Act regarding unexplained cash credit of hand loans.

Analysis:
The petitioner, engaged in agriculture and sericulture activities, declared availing loans from banks and private individuals in the return of income for the assessment year 2014-15. The case was selected for scrutiny, and a notice under Section 143(2) of the Income Tax Act was issued. The assessing authority and appellate authority rejected the claim of hand loans received by the assessee, adding the amount to the tax net.

The High Court found that the authorities did not properly consider the documents provided by the assessee, specifically the letter of confirmation establishing the hand loans. The Court emphasized the importance of reasons in judicial orders, stating that orders lacking reasons are void ab initio. Both the assessing and appellate authorities were criticized for not addressing the documents submitted by the assessee, despite being a specific ground raised in the appeal memo.

Highlighting the necessity of quasi-judicial authorities to provide a speaking order with reasons for their decisions, the High Court quashed the impugned orders and restored the proceedings to the Assessing Officer. The Assessing Officer was directed to re-do the assessment, considering the documents furnished by the assessee, and to pass a speaking order after hearing the concerned parties. The petitioner was instructed to appear before the Assessing Officer without notice, and the assessment was to be concluded in an expedited manner.

In conclusion, the writ petition challenging the dismissal of the appeal under Section 250 of the Income Tax Act was disposed of by the High Court, emphasizing the importance of providing reasons in judicial orders and directing the Assessing Officer to re-do the assessment in accordance with law.