2015 (9) TMI 1052 - HC - Income Tax

High Court sets aside Tribunal order under Section 260A of Income Tax Act, stresses transparency in decision-making

The Commissioner of Income Tax-II, Amritsar Versus Sh. Indra Sen Aggarwal

The High Court set aside the Tribunal's order in an appeal under Section 260A of the Income Tax Act, directing a fresh adjudication due to the Tribunal's ... Genuineness of the deposits and withdrawals made by the assessee in his bank accounts - revision order u/s 263 of CIT(A) set aside by ITAT observing that he was not justified in cancelling the assessment made by the Assessing Officer under Section 143(3) - Held that:- The entirety of the facts were required to be gone before upsetting the order of the CIT by the Tribunal. Further, the order dated 30.7.2012 (Annexure A-3) passed by the Tribunal is not a speaking order giving detailed reasons allowing the appeal of the assessee except mentioning that once having examined the source of deposits, the CIT cannot be given power to give his opinion and direct the Assessing Officer to write the order as per the desires of the CIT. It was also noticed that even if inadequate examination or enquiry had been conducted by the Assessing Officer, the CIT cannot direct the Assessing Officer to re-write the order or to make the enquiry again. The Tribunal being final fact finding authority was required to deal with all aspects of factual matrix and then record its conclusions based thereon. Thus the order of ITAT does not satisfy the requirements of being a reasoned order as enunciated by the Apex Court in M/s Kranti Associates Pvt. Ltd's case (2010 (9) TMI 886 - SUPREME COURT OF INDIA), noticed herein above - matter is remanded to the Tribunal for fresh adjudication - Decided in favour of revenue for statistical purposes. Issues:Appeal under Section 260A of the Income Tax Act, 1961 against Tribunal's order. Failure to consider genuineness of deposits and withdrawals in bank accounts. Requirement of reasoned order by Tribunal.Analysis:1. The appeal was filed by the revenue under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITA) for the assessment year 2007-08. The main issue raised was that the Tribunal did not consider the genuineness of deposits and withdrawals made by the assessee in his bank accounts. The revenue contended that the Tribunal's order lacked a reasoned speaking order, as required by legal precedent.2. The facts of the case revealed that the assessee had filed a return showing a loss for the assessment year 2007-08. The Assessing Officer framed an assessment, which was later cancelled by the Commissioner of Income Tax-II (CIT) under Section 263 of the Act. The Tribunal then allowed the appeal filed by the assessee, leading to the revenue's appeal before the High Court.3. During the hearing, the revenue argued that the Tribunal's decision lacked a reasoned order and failed to consider the crucial aspect of verifying the genuineness of the deposits and withdrawals made by the assessee. The revenue relied on previous judgments to support their arguments.4. On the other hand, the assessee's counsel supported the Tribunal's order and cited various judgments to strengthen their case. The counsel emphasized the importance of reasoned orders in decision-making processes.5. The High Court referred to the legal principles laid down by the Hon'ble Apex Court regarding the necessity of passing reasoned orders by quasi-judicial authorities. The Court highlighted the significance of recording reasons to ensure transparency, accountability, and fairness in decision-making processes.6. The revenue contended that the Assessing Officer had not adequately verified the source of deposits and withdrawals made by the assessee, leading to the cancellation of the assessment by the CIT. However, the Tribunal set aside the CIT's order, stating that the CIT could not direct the Assessing Officer to rewrite the order based on his opinion. The Tribunal's order was criticized for lacking detailed reasons and not addressing all aspects of the factual matrix.7. The High Court acknowledged the relevance of the judgments cited by the assessee's counsel but emphasized that since the matter was being remitted back to the Tribunal for fresh adjudication, those judgments would not impact the current stage of the case. The Court concluded that the Tribunal's order did not meet the requirements of a reasoned order as per legal standards and remanded the matter back to the Tribunal for fresh adjudication.8. In conclusion, the High Court set aside the Tribunal's order and directed a fresh adjudication by the Tribunal after affording an opportunity for hearing to the parties, in accordance with the law. The appeal was disposed of accordingly.