Speaking appellate orders are mandatory under tax law; ex parte affirmation without merits review was remanded for fresh adjudication.

An appellate authority must pass a reasoned and speaking order under section 250(6) of the Income-tax Act, 1961, even where the assessee does not appear. Because the impugned order merely affirmed the assessment without dealing with the merits of the cash deposit addition arising from demonetisation, it was held unsustainable. The matter was therefore set aside and restored for fresh adjudication, with an opportunity to both sides to place evidence and with liberty to seek a remand report. The appeal succeeded only for statistical purposes.

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Issues: Whether the appellate order, which merely affirmed the assessment without dealing with the merits and without passing a speaking order under section 250(6), should be set aside and the matter restored for fresh adjudication.

Analysis: The assessee did not appear before the appellate authority, but the order under challenge did not contain a discussion of the merits of the addition relating to cash deposits during demonetisation. The Tribunal noted that an appellate order under section 250(6) of the Income-tax Act, 1961 must be a reasoned and speaking order, even where the matter proceeds ex parte. In view of the absence of such adjudication, the issue required reconsideration on merits with an opportunity to place evidence and with liberty to call for a remand report.

Conclusion: The impugned appellate order was set aside and the matter was restored to the appellate authority for fresh decision in accordance with law; the assessee obtained a partial procedural relief.

Final Conclusion: The appeal succeeded only for statistical purposes, and the dispute was remitted for fresh appellate adjudication after providing reasonable opportunity to both sides.

Ratio Decidendi: An appellate authority must decide the appeal on merits by passing a speaking order under section 250(6) of the Income-tax Act, 1961, even in an ex parte proceeding.

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