Ita/59/2018 Of Principal Commissioner Of Income Tax 1 v. M/S Shree Developers

IN THE HIGH COURT OF MADHYA PRADESHAT JABALPUR BEFORE HON'BLE SHRI JUSTICE SHEEL NAGU & HON’BLE SHRI JUSTICE VIRENDER SINGH INCOME TAX APPEAL No. 59 of 2018 BETWEEN:- PRINCIPAL COMMISSIONER OF INCOMETAX 1, JABALPUR (MADHYA PRADESH) .....APPELLANT (BY SHRI SANJAY LAL -ADVOCATE) AND M/S SHREE DEVELOPERS, 2632, WRIGHTTOWN, JABALPUR (MADHYA PRADESH) .....RESPONDENT (RESPONDENT BY SHRI SAPAN USRETHE- ADVOCATE) -----------------------------------------------------------------------------------------Reserved on :28.11.2022Pronounced on :13.03.2023 ---------------------------------------------------------------------------------------- This appeal having been heard and reserved for orders, comingon for pronouncement this day, Hon’ble Shri Justice Sheel Nagupronounced the following: - 2 - ORDER Instant appeal preferred u/S.260-A of the Income Tax Act, 1961assails the legality, validity and propriety of final order dated 07.11.2017 inIT(SS)A. No.77/JAB/2013 by Income Tax Appellate Tribunal JabalpurBench, Jabalpur pertaining to assessment years 2004-05, 2007-08 and2008-09. 2.Learned counsel for the appellant/Revenue, Shri Lal as well as forthe assessee, Shri Usrethe are heard on the question of admission. 3.This appeal has not yet been admitted. 4.The substantial questions of law proposed by the Revenue are asfollows:-follows:- (1) Whether, on the facts and in the circumstances of the caseand, in law, the ITAT erred in sustaining the order of CIT(A)who has deleted the addition of Rs.9,75,000/- (proportionateaddition) made by the AO on account of profit of sale of 23Duplex Houses without appreciating the documents seized inthe search and seizure proceedings? (2) Whether, on the facts and in the circumstances of the caseand, in law, the ITAT erred in sustaining the order of CIT(A)who has allowed relief of Rs.3,89,00,000/- on account of profiton sale of land without appreciating the documents seized in thesearch and seizure proceedings? (3) Whether, on the facts and in the circumstances of the caseand, in law, the ITAT erred in sustaining the order of CIT(A)who has deleted the addition of Rs.11,75,00,000/- on account ofunaccounted investment in plot/land without appreciating thedocuments seized in the search and seizure proceedings withoutappreciating the documents seized in the search and seizureproceedings? (4) Whether, on the facts and in the circumstances of the caseand, in law, the ITAT erred in not appreciating the fact that theloose papers were found and seized from the assessee and theassessee was unable to explain the same during the assessmentproceedings? (5) That the ITAT has committed an error in deleting theaforesaid additions made by Assessing Officer (A.O.), withouttaking note of the facts & documents on the record, hence theorder passed by ITAT is perverse and deserves to be quashed. 5.Learned counsel for the appellant/Revenue has brought to the noticeof this Court an order passed on 17.11.2021 in ITA. No.10/2021 wherebythis Court finding the order of Income Tax Tribunal to be non speakingallowed said ITA of the assessee on that ground alone and remanded thematter to Income Tax Appellate Tribunal for passing speaking order. 6.Relying upon the aforesaid order passed in ITA. No.10/2021, learnedcounsel for rival parties are at consensus that the findings rendered by theTribunal in respect of assessment year 2004-05 are non speaking. 7.Considering the aforesaid submission, it is seen from the impugnedorder of Tribunal dated 07.11.2017 (Annexure A/3) that in respect ofassessment year 2004-05 the Tribunal while considering the first ground inPara 4 has summarized the facts and has reproduced the findings of thefirst Appellate Authority in extenso. In Para 5, the Tribunal reproducedconclusion of CIT(A) and in Para 6 following findings have been renderedby the Tribunal:- 6.Relying upon the aforesaid order passed in ITA. No.10/2021, learnedcounsel for rival parties are at consensus that the findings rendered by theTribunal in respect of assessment year 2004-05 are non speaking. 7.Considering the aforesaid submission, it is seen from the impugnedorder of Tribunal dated 07.11.2017 (Annexure A/3) that in respect ofassessment year 2004-05 the Tribunal while considering the first ground inPara 4 has summarized the facts and has reproduced the findings of thefirst Appellate Authority in extenso. In Para 5, the Tribunal reproducedconclusion of CIT(A) and in Para 6 following findings have been renderedby the Tribunal:- “6. We have perused the case records, analyze the facts andcircumstances in the case and we find that the learned CIT (A)was appraised of the entire situation through the submission ofthe assessee which is on record as appearing in the order of thelearned CIT(A) and it was correctly held by the learnedCIT(A) that the addition of Rs.9.75 lac was found to be withoutany basis and as such we do not find any infirmity with findingsof the learned CIT(A) and the relief granted to the assessee ishereby sustained.” 7.1As regards the other ground in respect of same assessment year2004-05, the Tribunal summarizing the ground in Para 7 reproduced thefindings of CITA whereas in Para 8 it records its findings in the followingmanner:- “8. We have perused the case records, heard the rivalcontentions and we find that the learned CIT(A) out of additionof Rs.49,13,763/- gave relief of Rs.37,44,344/- and sustainedaddition of Rs.1169419/- which appears to be reasonable andeven in consonance with the rational and reasoning adopted bythe AO. We do not find any infirmity with the findings of thelearned CIT(A) and accordingly the relief granted to this extentby the learned CIT(A) is accordingly sustained.” 8.From the above, it is palpable that Tribunal in fact has not recordedany independent finding/reasons in respect of both the grounds raised bythe assessee and thus, order of Tribunal to the extent it relates toassessment year 2004-05 is violative of principle of natural justice beingnon speaking. 8.1A non speaking order not only prevents the adversely affectedpersons to know the exact reasons behind the conclusion arrived at but alsodisables the aggrieved person from effectively availing remedy before theHigher Forum. 9.In view of above, this Court frames following new substantialquestion of law:- “Whether the Tribunal fell in grave error of law in failing torecord reasons and findings in regard to assessment year 2004-05.” 10.In view of above discussion, aforesaid newly framed substantialquestion of law is answered in affirmative that the Tribunal failed to recordreasons and findings in respect of assessment year 2004-05. 11.Accordingly, the appeal preferred by the Revenue is allowed to thefollowing extent:- (i) Impugned order dated 07.11.2017 in IT(SS)A.No.77/JAB/2013 by Income Tax Appellate Tribunal Jabalpur Bench, Jabalpur is set aside for being non speaking in respectof assessment year 2004-05. - 6 - (ii) The matter stands remanded to Income Tax AppellateTribunal Jabalpur Bench, Jabalpur for passing speaking orderin IT(SS)A. No.77/JAB/2013 in respect of assessment year2004-05. (iii) In case composition of the Tribunal has since undergonechange, speaking order be passed after hearing counsel forrival parties. 12.After complying with this order the Revenue shall be at liberty, if soadvised, to raise all contentions and grounds not decided hereinabove. 13.With the aforesaid directions, present ITA stands allowed withoutcost. (SHEEL NAGU) (VIRENDER SINGH) JUDGE JUDGE mohsin Digitally signed by MOHAMMED MOHSIN QURESHI Date: 2023.03.14 10:31:14 +05'30'