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of <h1>Appellate authority must issue reasoned orders under s.250(6), decide every appeal ground or remand for fresh adjudication</h1> <h3>Shamrao Gopal Benake Versus ITO, Ward-1 (1), Kolhapur</h3> Shamrao Gopal Benake Versus ITO, Ward-1 (1), Kolhapur - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether the Commissioner (Appeals)/Appellate Authority can set aside an assessment made under section 144 (and related provisions) by remanding the matter to the Assessing Officer without adjudicating the grounds of appeal, including legal grounds challenging validity of notices and reassessment. 2. Whether section 250(6) (statutory requirement for reasoned orders stating points for determination, decisions thereon and reasons) mandates that the Appellate Authority must decide each ground of appeal by a speaking order, and the legal consequences of non-compliance. 3. Ancillary: Whether delay by the Appellate Authority in passing the appellate order contrary to administrative instructions of the CBDT (directions to decide within a stipulated time) invalidates the appellate order or warrants interference. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Power to remand without adjudication of grounds (including legal grounds) Legal framework: The Appellate Authority possesses powers to dispose of appeals under the Act and, by virtue of the newly inserted proviso to section 251(1)(a) (w.e.f. 01.10.2024), may set aside an assessment made under section 144 and refer the case back to the Assessing Officer for fresh assessment. Precedent Treatment: The appellate bench noted reliance by the Appellate Authority on the statutory proviso permitting set-aside in assessment-u/s-144 cases. The assessee relied on coordinate-bench decisions (referenced generally) emphasizing the obligation to decide grounds, but no authoritative precedent overruling the proviso was required or applied by the Tribunal. Interpretation and reasoning: The Tribunal accepts that the proviso to section 251(1)(a) grants power to set aside assessments made under section 144. However, this statutory power does not operate in isolation from the overarching obligation under section 250(6) to give a reasoned order addressing the points for determination. Where appellants raise specific grounds, particularly legal grounds that challenge validity of notices or the reassessment jurisdiction itself, the appellate forum cannot merely remand the matter without adjudication of those grounds. The Tribunal reasons that remanding as a procedural device is permissible when exercisable consistently with the duty to decide; it is impermissible where the Appellate Authority fails to address and decide pleaded legal questions which go to the root of jurisdiction/validity. Ratio vs. Obiter: Ratio - An Appellate Authority's power to set aside assessment under the proviso to section 251(1)(a) does not absolve it from its statutory duty under section 250(6) to decide points raised on appeal; remand without adjudication of legal grounds amounting to non-compliance with section 250(6) is impermissible. Obiter - Observations on the utility of the proviso for cases requiring fresh scrutiny. Conclusion: The Appellate Authority erred in simply remanding the assessment to the Assessing Officer without adjudicating the legal and other grounds raised on appeal; such remand is unsustainable where it circumvents the duty to decide points for determination and give reasons. Issue 2 - Mandatory nature of section 250(6) and the requirement for speaking orders Legal framework: Section 250(6) requires that the appellate order be in writing and state the points for determination, the decision thereon and the reasons for the decision. This statutory mandate undergirds principles of reasoned decision-making and natural justice in appellate adjudication. Precedent Treatment: The Tribunal relied on the statutory text and prior coordinate-bench jurisprudence (cited generally by counsel) emphasizing the necessity of adjudicating each ground and providing reasons; the judgment treats these authorities as supportive of the statutory mandate rather than distinguishable. Interpretation and reasoning: The Tribunal interprets section 250(6) as mandatory and non-perfunctory. Where appellants advance legal grounds (e.g., challenge to validity of notices, jurisdiction for reassessment), the Appellate Authority must address and decide each such ground with reasons; failure to do so violates both the statutory text and principles of natural justice. The Tribunal observes that the Appellate Authority's order contained a mere statement setting aside the assessment and a direction for de novo assessment without adjudication of the pleaded grounds - effectively no exercise of the duty to determine points and state reasons. Ratio vs. Obiter: Ratio - Section 250(6) imposes a mandatory duty on the Appellate Authority to decide each ground with reasons; non-compliance renders the appellate order unsustainable. Obiter - Emphasis that opportunity of hearing and compliance with notices should be ensured during remand proceedings. Conclusion: Non-adjudication of grounds (particularly legal grounds) by the Appellate Authority constitutes a breach of section 250(6) and principles of natural justice; the appellate order must be set aside and the appeal remitted for fresh disposal with directions to decide each ground by a speaking order after affording opportunity of hearing. Issue 3 (Ancillary) - Delay in passing appellate order vis-à-vis CBDT instructions Legal framework: CBDT administrative instructions advise timely disposal of appeals (directing orders within a specified period post-hearing). These are administrative directions, not statutory provisions. Precedent Treatment: The assessee stressed non-compliance with CBDT Instruction No.20 of 2003 and F.No.279/MISC/53/2003-ITJ dated 19-06-2015; the Tribunal recorded the contention but did not base its decision primarily on these instructions. Interpretation and reasoning: The Tribunal acknowledged the contention of delay (approximately eight months) in issuance of the appellate order despite written submissions. While noting the administrative instructions, the Tribunal's holding rests on statutory non-compliance with section 250(6) rather than treating the delay alone as determinative. The Tribunal did not hold that breach of the CBDT instructions by itself invalidated the order, but observed the instructions as relevant factual background demonstrating lack of procedural diligence. Ratio vs. Obiter: Obiter - The delay vis-à-vis CBDT instructions is remarked upon but not treated as the primary legal basis for setting aside the appellate order. Ratio - None specific solely to CBDT instructions in this decision. Conclusion: The delay in passing the appellate order contrary to CBDT instructions is noted and criticized, but the order was set aside on the ground of statutory non-compliance with section 250(6) (failure to decide grounds with reasons). The Tribunal remands for fresh adjudication, implicitly requiring adherence to procedural timelines and provision of hearing. Relief and Directions (consequential conclusions) The Tribunal sets aside the Appellate Authority's order and remands the appeal to the Appellate Authority for fresh adjudication. The Appellate Authority is directed to decide all grounds raised by the appellant, including legal grounds challenging notices and reassessment jurisdiction, by a reasoned, speaking order that states points for determination, decisions thereon and reasons, and after giving reasonable opportunity of hearing to the appellant. The Tribunal confines itself to remand and does not adjudicate the substantive merits of the assessment or the legal grounds.
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