Facts of the Case

The assessee challenged the order passed by the Commissioner of Income Tax (Appeals) arising out of an assessment completed under Section 143(3) of the Income-tax Act. The assessee contended that the appellate authority had not properly appreciated the material on record and disposed of the appeal without adequate consideration of submissions and evidence.

Issues Involved

  1. Whether the order of the CIT(A) was sustainable in law.
  2. Whether the appellate authority failed to consider relevant evidence and submissions.
  3. Whether the matter required restoration for fresh adjudication.

Petitioner’s (Assessee’s) Arguments

  • The assessee submitted that proper opportunity of hearing was not effectively granted.
  • Relevant evidence and explanations were not adequately considered.
  • The order passed by the CIT(A) was non-speaking and contrary to principles of natural justice.
  • The assessee requested that the matter be remanded for fresh consideration.

 Respondent’s (Revenue’s) Arguments

  • The Revenue supported the orders of the lower authorities.
  • It was contended that adequate opportunity had been provided during appellate proceedings.
  • The findings of the CIT(A) were justified on the basis of available material.

Court Order / Findings (ITAT)

The Tribunal observed that the Commissioner (Appeals) functions as a quasi-judicial authority and is required to pass a reasoned and speaking order after examining all relevant facts and evidence. Failure to properly consider submissions or material on record amounts to violation of principles of natural justice.

In the present case, the Tribunal found that the appellate order suffered from procedural infirmities. Accordingly, the order of the CIT(A) was set aside and the matter was restored for fresh adjudication after granting adequate opportunity to the assessee.

Important Clarification

The Tribunal emphasized that appellate proceedings are not merely procedural but substantive in nature. The first appellate authority must independently evaluate evidence, record findings, and pass a reasoned order. Mechanical disposal of appeals without proper examination cannot be sustained in law.

Link to download the order – https://itat.gov.in/public/files/upload/1574670684-DIBYA-277(CITA).pdf

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