High Court quashes ITAT orders, cites procedural flaws, directs Revenue for compliant consolidation application.

The High Court quashed the consolidation orders by the Income Tax Appellate Tribunal (ITAT) due to lack of notice and reasoning, citing procedural flaws. The court directed the Revenue to submit a comprehensive consolidation application, ensuring advance notice to the assessee and reasoned orders in future proceedings. The petitioner's challenge was successful, leading to specific directions for proper procedure in future appeals consolidation before the ITAT.

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Issues:
1. Consolidation of appeals before the Income Tax Appellate Tribunal without proper notice to the petitioner.
2. Allegation of cryptic and unreasoned order by the ITAT.
3. Failure to follow proper procedure as per established principles in previous judgments.
4. Justification for consolidation based on similar factual disputes.
5. Quashing of the consolidation orders and directions for future proceedings.

Analysis:

1. The petitioner challenged the order of the Income Tax Appellate Tribunal (ITAT) consolidating 13 appeals without providing any notice. The petitioner contended that the applications for consolidation did not provide reasons for the sudden decision to consolidate long-pending appeals adjourned at the revenue's request. The petitioner argued that the consolidation process was flawed and contrary to established principles, citing precedents like Olympia Paper & Stationery Stores v. Assistant Commissioner of Income Tax and Dr. Prannoy Roy v. The Deputy Commissioner of Income Tax & Ors. The petitioner sought to quash the consolidation orders due to the lack of reasoning and application of mind.

2. The counsel for the Revenue defended the consolidation, stating that it was necessary to consolidate the appeals due to similar factual disputes in the interest of justice. The rationale for consolidation was based on the request from the Revenue, as communicated by the Commissioner of Income Tax on specific dates. However, the record did not show any notice given to the petitioner/assessee before issuing the consolidation order, raising procedural concerns.

3. The petitioner's counsel highlighted the failure of the ITAT to follow proper procedure, including providing adequate notice to the appellant regarding consolidation and giving brief reasons for the essentiality of consolidation as per established precedents. The repeated listing and adjournment of appeals without proper communication regarding consolidation undermined the validity of the ITAT's orders.

4. The High Court quashed the impugned orders of consolidation dated 11th June 2018 and 9th July 2018, directing the Revenue to file a comprehensive application for consolidation before the ITAT. The court emphasized the importance of serving a copy of the application to the assessee in advance, ensuring notice to the assessee, and passing a reasoned order after considering submissions from both parties in future consolidation proceedings.

5. The petition filed by the petitioner was allowed, and the matter was disposed of with the court's observations and directions for the proper procedure to be followed in case of future consolidation of appeals before the ITAT.

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