Facts of the Case

The assessee filed an appeal before the CIT(A) challenging additions made by the Assessing Officer. The CIT(A) issued notices directing the assessee to submit replies; however, due to absence of response, the appeal was disposed of ex-parte and the addition of ₹7,60,200 was confirmed.

The assessee challenged the order before the Tribunal on the ground that the appellate authority passed the order without hearing the assessee and without providing reasons for confirming the addition.

Issues Involved

  1. Whether the CIT(A) can confirm additions ex-parte without providing reasons.
  2. Whether a non-speaking appellate order violates Section 250(6).
  3. Whether such an order is sustainable under law.

Petitioner’s Arguments (Assessee)

  • The appeal was decided without granting effective opportunity of hearing.
  • The CIT(A) did not examine facts or legal grounds raised.
  • The order lacked reasoning and discussion.
  • The confirmation of addition without analysis was arbitrary.

Respondent’s Arguments (Revenue)

  • Notices were issued to the assessee directing submission of reply.
  • The assessee failed to respond within the stipulated time.
  • Therefore, the appellate authority confirmed the assessment order.

Court Order / Findings (ITAT Allahabad)

The Tribunal observed that merely stating that the order was passed “on merits” is insufficient. A quasi-judicial authority is required to pass a reasoned order addressing the issues raised.

It emphasized that reasons constitute the foundation of a judicial order and enable higher appellate authorities to examine its correctness. Failure to discuss facts or legal grounds amounted to non-application of mind.

Accordingly, the Tribunal:

  • Set aside the impugned order of the CIT(A)
  • Restored the appeal for fresh adjudication
  • Directed passing of a speaking order in accordance with Section 250(6)
  • Allowed the appeal for statistical purposes

Important Clarification

  • Reasoned orders are mandatory in appellate proceedings.
  • Ex-parte confirmation without analysis is unsustainable.
  • Judicial and quasi-judicial authorities must record findings and reasons.
  • The Tribunal did not decide the substantive tax dispute.
  • The assessee must cooperate during fresh proceedings.

Link to download the order -  https://itat.gov.in/public/files/upload/1694424918-60%20of%202023%20Vipin%20Kumar%20Pandey(Assessee%20Appeal)%20uder%20section%20143(3)%20of%20the%20Act%20SMC%20(Corrected).pdf

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