Cryptic order passed in casual manner by CIT(A) liable for imposition of cost on account of gross violation of statutory provisions of law and principles of natural justice.
In a recent judgment, the ITAT Amritsar has held that a cryptic order passed in casual manner by the CIT(A) liable for imposition of cost on account of gross violation of statutory provisions of law and principles of natural justice and increase to the cost of litigation to the appellant.
ABCAUS Case Law Citation:
4292 (2024) (10) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A), National Faceless Appeal Centre (NFAC) in dismissing the appeal of the assessee ex-parte.
The Tribunal observed that it was undisputed fact that the NFAC had rejected the appeal of the assessee by passing order ex-parte qua the assessee, without issuing any notice whatsoever fixing the case for hearing of appeal, as mandated by section 250(1) of the Income Tax Act, 1961 and passed the order ex-parte qua the assessee in gross violation of principles of natural justice.
The Tribunal further observed that the CIT(A) had merely stated the observation of the AO based on Inspector’s report regarding Banjar Land being not under cultivation and held it chargeable to Capital Gains Tax without issuing any notice of hearing to the appellant as per record. The facts of non-issue of notice u/s 250(1) was undisputed fact on record and remained unrebutted by the department. Also, the CIT(A) had not mentioned the factum of issue and service of statutory notice u/s 250(1)on the appellant assessee, in the impugned order. Meaning thereby that the NFAC has rejected the appeal without granting adequate opportunity of being heard in violation of principles of natural justice.
The Tribunal stated that as per provisions of the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act, the CIT(A) is required to apply his mind to all the issues which arise from the assessment order before him whether the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal ex-parte for non- prosecution in violation without granting opportunity.
The Tribunal opined that the CIT(A) erred in dismissing the appeal of the assessee in gross violation of principles of natural justice.
The Tribunal further observed that in the judgment delivered by the Co-ordinate Bench following Hon’ble Bombay High Court for the proposition that CIT(A) is required to apply his mind to all issues which arise from impugned order before him whether or not same had been raised by appellant before him; and further, that CIT(A) is obliged to dispose of the appeal on merits, held that the CIT(A) erred in dismissing the appeal of the Assessee in limine for non-prosecution.
The Tribunal observed that in respect of the assessment year under consideration, the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stood withdrawn with effect. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CTT(A) to dismiss the appeal ex-parte without addressing all the grounds of appeal on merits of the case.
The Tribunal further noted that Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him.
The Tribunal further noted that in the present case the appellant had raised multiple grounds on legal issues and merits of the case and the CIT(A) had failed to address the grounds raised before him by the appellant.
Though the Tribunal opined that such a cryptic order passed in casual manner by the CIT(A) was deprecated and liable for imposition of cost on account of gross violation of statutory provisions of law and principles of natural justice and increase to the cost of litigation to the appellant. However, it restrained itself to impose the cost as requested by the appellant and directed the CIT(A) to be more cautious in adjudicating the appeals as per mandate by following principles of natural justice.
The Tribunal restored the matter to the file of the CIT(A)/NFAC to adjudicate the appeal de novo addressing all the issues raised in the grounds of appeal after granting adequate opportunity of being heard to the appellant.
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