2020 (1) TMI 1131 - AT - Income Tax

Tribunal emphasizes independent assessment by CIT(Appeals) for fair decisions

The Tribunal allowed the appeal, setting aside the CIT(Appeals) order that dismissed the assessee's appeal for the assessment year 2015-16. The Tribunal ... Period and timing of Personal hearing before the CIT(A) - tax practitioners, Advocate and Chartered Accountant to wait till 9 PM and 10 PM in his office - Power conferred on the CIT (Appeals) u/s 251 to enhance the assessment - HELD THAT:- The power conferred on the CIT(Appeals) to enhance the assessment is onerous responsibility. Such a responsibility cannot be ignored by the CIT(Appeals) by simply blaming the assessee that he has not responded to the notice of hearing. Moreover, the judicial discipline requires that the CIT(Appeals) shall pass an order by bringing on record all material facts and record his own reason for the conclusion reached therein. There should be a live link to the material available on record and the application of mind by the CIT(Appeals) while disposing of the appeal. Such a live link can be brought in only by passing a speaking order. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has to apply his mind independently to the material available on record and reappreciate the same and thereafter decide the issue afresh in accordance with law. CIT(Appeals) has to work for entire 24 hours. CIT(Appeals) has to work within the office hours as prescribed and take sufficient rest so that he may recoup his energy to do his job in the next day morning. Even though we are not blaming his working upto 10 PM in the night, there may not be any productive result after such prolonged work after the office hours. Working in the late hours upto 10 PM in the night and passing this kind of cryptic and non-speaking order will not only affect the health of the officer but also prejudice the interest of the assessee. This could have been avoided by the CIT(Appeals). Moreover, even though Saturdays and Sundays are being declared holidays for Central Government offices, including the office of the CIT(Appeals), this Tribunal is of the considered opinion that such holidays are declared by the Government of India expecting the Government employees to relax, rest and recoup energy on Saturday and Sunday so that they can work effectively and efficiently on the coming working days. Tribunal is confident that the CIT(Appeals) may confine his hearing of appeals within the working hours of the Income-tax Department so that the Chartered Accountants, Advocates and tax practitioners, who are appearing before him, may have more confidence and certainty in his functioning. It may not be wrong to continue the hearing after office hours occasionally. But hearing the appeals and making the tax practitioners, advocates and Chartered Accountants to wait till 9 PM to 10 PM on daily basis has to be avoid. CIT(Appeals) is set aside and the entire issue raised by the assessee is remitted back to the CIT(Appeals) - Appeal filed by the assessee stands allowed for statistical purposes. Issues:Appeal against order of CIT(Appeals) - Dismissal of appeal without proper consideration - Misunderstanding regarding representation - Failure to apply mind independently - Power of CIT(Appeals) to enhance assessment - Working hours of CIT(Appeals) - Impact on health and interests of parties - Remittal of issue for reconsideration.Analysis:The appeal before the Appellate Tribunal concerned the dismissal of the assessee's appeal by the Commissioner of Income Tax (Appeals) for the assessment year 2015-16. The counsel for the assessee contended that the CIT(Appeals) had merely reproduced the assessment order and notice of hearing, without properly considering the merits of the case. It was highlighted that a staff member from the counsel's office, not a Chartered Accountant, had represented the case before the CIT(Appeals), leading to a misunderstanding. The counsel argued that the CIT(Appeals) failed to appreciate the material on record and passed a summary dismissal without proper scrutiny. Consequently, the counsel requested the matter to be remitted back to the CIT(Appeals) for a reconsideration on merit.Upon considering the submissions, the Tribunal noted that the CIT(Appeals) had indeed reproduced the assessment order and notice of hearing without conducting an independent assessment of the case. The Tribunal emphasized that the power vested in the CIT(Appeals) under Section 251 of the Income-tax Act required a thorough examination of the material on record and the issuance of a speaking order. Even if the assessee did not appear before the CIT(Appeals), it was incumbent upon the CIT(Appeals) to reevaluate the evidence and potentially enhance the assessment through a detailed order. The Tribunal underscored the importance of the CIT(Appeals) providing reasoning for the conclusions reached, maintaining a live link between the evidence and the decision.Furthermore, the Tribunal addressed the working hours of the CIT(Appeals), expressing concern over the prolonged hours practitioners were made to wait, potentially impacting the quality of decision-making and the well-being of the officer. The Tribunal stressed that while occasional extended hours might be acceptable, regular late-night hearings were discouraged. It was suggested that the CIT(Appeals) should confine hearings within office hours to instill confidence and certainty in the process for the parties involved. The Tribunal emphasized the need for the CIT(Appeals) to balance work and rest to ensure effective and efficient functioning.In light of these observations, the Tribunal set aside the order of the CIT(Appeals) and remitted the issue back for reconsideration. The CIT(Appeals) was directed to review the matter with due diligence, providing a reasonable opportunity to the assessee. It was clarified that if the assessee failed to appear, the CIT(Appeals) could request records from the Assessing Officer for a thorough reevaluation. Ultimately, the appeal by the assessee was allowed for statistical purposes, with the order pronounced on 16th January 2020 in Chennai.