Taxap/713/2018 Of Principal Commissioner Of Income Tax - 3 v. Ashokji Chanduji Thakor

C/TAXAP/710/2018 CAV JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 710 of 2018With R/TAX APPEAL NO. 711 of 2018With R/TAX APPEAL NO. 712 of 2018With R/TAX APPEAL NO. 713 of 2018With R/TAX APPEAL NO. 714 of 2018With R/TAX APPEAL NO. 717 of 2018 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH sd/-andHONOURABLE MR.JUSTICE A.Y. KOGJE sd/-=========================================1 Whether Reporters of Local Papers may be allowed to see YESthe judgment ?2 To be referred to the Reporter or not ?YES3 Whether their Lordships wish to see the fair copy of the NOjudgment ?4 Whether this case involves a substantial question of law as NOto the interpretation of the Constitution of India or any order made thereunder ?=============================================PRINCIPAL COMMISSIONER OF INCOME TAX - 3VersusASHOKJI CHANDUJI THAKOR=============================================Appearance:MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1MR VIVEKKUMAR CHAVDA(6666) for the RESPONDENT(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH andHONOURABLE MR.JUSTICE A.Y. KOGJE Date : 27/06/2018 CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0.As common question of law and facts arise in this group of appeals and with respect to same assessee but for different assessment years and as such arise out of the impugned common judgment and order passed by the learned Income Tax Appellate Tribunal, all these appeals are decided and disposed of by this common judgment and order. 2.0.Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, "A" Bench, Ahmedabad passed in Appeal being IT(SS) A No.117/AHD/2015 for AY 2005-06 to 2010-11, by which, the learned Tribunal has allowed the said appeals and without assigning any reason and without any justification has set aside the orders passed by the learned ITAT and has remitted the matter / restored the matter back to the file of the learned CIT(A), the Revenue has preferred present Tax Appeal to consider the following questions of law. "(A) Whether the Appellate Tribunal erred in setting aside the order passed by the CIT(A) on the ground that CIT(A) had not rendered any decision on merits without appreciating the fact that due to total non-compliance on part of the assessee despite granting sufficient opportunities, CIT(A) did not have any material to further dwelt upon the issue and had no choice but to frame an order based on the finding, given in the ex-parte order passed by the Assessing Officer? (B) Whether the Appellate Tribunal erred in setting aside the matter to CIT(A) for fresh adjudication without taking into consideration whether there were justifiable grounds for making total non-compliance by the assessee before the CIT(A) as well as the Assessing Officer? " 3.0.For the sake of convenience facts in Tax Appeal No. 710 of 2018 arising out of the impugned common judgment and order passed by the learned ITAT passed in IT(SS) A No.117/AHD/2015 for AY 2005-06 are narrated, which are as under: (B) Whether the Appellate Tribunal erred in setting aside the matter to CIT(A) for fresh adjudication without taking into consideration whether there were justifiable grounds for making total non-compliance by the assessee before the CIT(A) as well as the Assessing Officer? " 3.0.For the sake of convenience facts in Tax Appeal No. 710 of 2018 arising out of the impugned common judgment and order passed by the learned ITAT passed in IT(SS) A No.117/AHD/2015 for AY 2005-06 are narrated, which are as under: 3.1.A search action was conducted at the premises of the assessee on 21.09.2010. The notice under Section 153 A of the Act was issued to the assessee on 18.12.2012 for AY 2005-06 to AY 2010-11, which duly served upon the assessee. In response to the said notice, assessee filed its return of income for AY 2005-06 to 2010-11 on 10.01.2013. The return was income of the was filed on 10.01.2013 declaring total income at Rs.81430/-. During the search at the resident of the assessee cash of Rs.10,02,940/- and a jewellery worth of Rs.70,400/- were found. That a cash of Rs.9,88,500/- was seized, it appears that during the course of search proceeding, it was noticed by the AO that Thakore Group was engaged in sale and purchase of land and the group was generating substantial cash by not fully recording transactions of sale and purchase of land. That during the assessment proceeding, notice under Section 142(1) of the Act was issued on 16.1.2013 for AY 2005-06 to AY 2011-12 requesting to submit the details called for till 23.01.2012 as the assessee failed to submit any reply thereafter. Therefore, the show cause notice for levy of penalty under Section 271(1)(b) of the Act was sent to the assessee vide notice dated 08.02.2013. That a show cause notice for completion of assessment under Section 144 of the Act was issued on 08.02.2013 requesting the assessee to submit the reply. The authorized representative of the assessee attended the office and various details, explanation of seized material and clarification was called for vide order sheet entries dated 03.01.2013, 08.02.2013 and 25.03.2013. It was noticed that no reply has been received on various queries raised except a copy of bank statement. Therefore, a final show cause under Section 142(1) of the Act for completion of assessment under Section 144 of the Act was issued on 01.03.2013 but no reply was received till 12.03.2013. Therefore, it was found that only reply submitted in the case of Thakore Group was in the case of assessee's brother. So far as assessee is concerned, despite almost 5 to 6 opportunities were given, no reply was filed. That thereafter, the AO proceeded further with to finalize the assessment proceedings under Section 144 of the Act on the basis of details available on record. That after considering the material on record, the investment on the land of Rs.5,13,883/- was treated as unexplained investment and the same was added to the total income of the assessee. That the AO also observed that penalty proceedings under Section 271(1)(c) of the Act is being initiated for submitting inaccurate particulars of income. 3.2.Similar, additions were made on unexplained investment in purchased of the land for the remaining assessment years. 3.3.Feeling aggrieved and dissatisfied with the respective assessment orders, assessee preferred appeal before the CIT(A) against the addition of unexplained investment. 3.4.Even before the learned CIT(A) also the assessee was non- 3.2.Similar, additions were made on unexplained investment in purchased of the land for the remaining assessment years. 3.3.Feeling aggrieved and dissatisfied with the respective assessment orders, assessee preferred appeal before the CIT(A) against the addition of unexplained investment. 3.4.Even before the learned CIT(A) also the assessee was non- cooperative. Though, number of opportunities were given, nobody attended the hearing before the learned CIT(A). That final opportunity was given vide notice dated 5.12.2014 which was served upon the assessee on 08.12.2014 and the hearing was fixed on 17.12.2014. In the notice, it was specifically mentioned that "please note that this is the final opportunity and in case of non appearance and no submission of details the appeal shall be decided as per the statement of facts and material available on record", however despite the above final notice, none attended on the date of hearing. That thereafter, considering the material on record and after taking into consideration the ground on all the appeals, the learned CIT(A) dismissed the appeal / appeals. 3.5.Feeling aggrieved and dissatisfied with the order / orders passed by the learned CIT(A) confirming the additions made by the AO, the assessee preferred appeals before the learned Tribunal being Appeal Nos. IT(SS) A No.117/AHD/2015 to IT(SS) A No.122/AHD/2015. By impugned non reasoned, non speaking order, the learned Tribunal has remitted / restored the matter back to the file of the learned CIT(A) solely by observing that "we consider it expedient to restore the matter back to the file of the CIT(A) in the larger interest of justice with a view to enable the assessee to avail opportunity once more." Consequently, the learned Tribunal has set aside the order/ orders passed by the learned CIT(A). 3.6.Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Tribunal, the Revenue has preferred the present appeals to consider the following questions of law. "(A) Whether the Appellate Tribunal erred in setting aside the order passed by the CIT(A) on the ground that CIT(A) had not rendered any decision on merits without appreciating the fact that due to total non-compliance on part of the assessee despite granting sufficient opportunities, CIT(A) did not have any material to further dwelt upon the issue and had no choice but to frame an order based on the finding, given in the ex-parte order passed by the Assessing Officer?the order passed by the CIT(A) on the ground that CIT(A) had not rendered any decision on merits without appreciating the fact that due to total non-compliance on part of the assessee despite granting sufficient opportunities, CIT(A) did not have any material to further dwelt upon the issue and had no choice but to frame an order based on the finding, given in the ex-parte order passed by the Assessing Officer? (B) Whether the Appellate Tribunal erred in setting aside the matter to CIT(A) for fresh adjudication without taking into consideration whether there were justifiable grounds for making total non-compliance by the assessee before the CIT(A) as well as the Assessing Officer? " 4.0.Mrs. Bhatt, learned advocate has appeared on behalf of the Revenue and Shri Vivek Chavda, learned advocate has appeared on behalf of the common assessee. 5.0.Mrs. Bhatt, learned advocate for the Revenue has vehemently submitted that impugned common judgment and order passed by the learned Tribunal suffers from unreasonableness and arbitrariness and therefore, the same deserves to be quashed and set aside. 5.1.It is vehemently submitted by Mrs. Bhatt, learned advocate for the Revenue that no reason whatsoever has been given by the 4.0.Mrs. Bhatt, learned advocate has appeared on behalf of the Revenue and Shri Vivek Chavda, learned advocate has appeared on behalf of the common assessee. 5.0.Mrs. Bhatt, learned advocate for the Revenue has vehemently submitted that impugned common judgment and order passed by the learned Tribunal suffers from unreasonableness and arbitrariness and therefore, the same deserves to be quashed and set aside. 5.1.It is vehemently submitted by Mrs. Bhatt, learned advocate for the Revenue that no reason whatsoever has been given by the learned Tribunal as to why the orders passed by the learned CIT(A) deserve to be quashed and set aside and why the matters are required to be restored back to the file of the learned CIT(A). It is vehemently submitted by Mrs. Bhatt, learned advocate for the Revenue that before AO as well as learned CIT(A) all throughout assessee was non cooperative and despite sufficient opportunity is given nobody remained present on behalf of the assessee and thereafter when the AO framed the assessment and learned CIT(A) dismissed the appeals, the same could not have been rightly interfered with by the learned Tribunal in a manner in which the learned Tribunal has dealt with the matter. 5.2.It is submitted that the learned Tribunal as such was required to consider on merits whether there were any justifiable reasons for the assessee and / or its representative not to remain present at the time of hearing and only on sufficient cause being shown, learned Tribunal by passing speaking and reasoned order remitted back the matter to the learned CIT(A). 5.3It is submitted that in the present case as such no reasons whatsoever have been given by the learned Tribunal how the order passed by the learned CIT(A) is erroneous and why the matters are required to be remitted back to the file by the learned CIT(A). It is submitted that therefore, the impugned order passed by the learned CIT(A) suffers from unreasonableness, arbitrariness and non application of mind. It is submitted that the manner in which the learned Tribunal has dealt with and disposed of the appeals and has remitted the matter back to the learned CIT(A), is not justiciable at all. It is submitted that the appeals cannot be decided at the whims and the orders cannot be passed in such a manner. 5.4.It is submitted that the order passed by the learned CIT(A) would not have been set aside in such a casual manner and the matters could not have been restored back to the file of learned CIT(A) by observing that " we consider it expedient to restore the matter back to the file of the CIT(A) in the larger interest of justice". It is submitted that such remand must be backed by cogent reasons. It is submitted that therefore, in the facts and circumstances of the case, more particularly, when all throughout i.e. during the assessment proceedings before the learned CIT(A), assessee is non cooperative, learned Tribunal ought not to have set aside the order passed by the learned CIT(A) in such a casual manner and ought not to have interfered with the order passed by the learned CIT(A) lightly and ought not to have remitted the matter back to the learned CIT(A). Making above submissions, it is requested to allow the present appeal and quash and set aside the impugned order passed by the learned Tribunal. 6.0.Shri Vivek Chavda, learned advocate for the assessee has made only one submission that the Tribunal has remanded the matter back to the CIT(A) for deciding the controversy afresh, it cannot be said that any substantial question of law or even the question had arisen from such an order. In support of his above submission, he has relied upon the decision of the Division Bench of the High Court of Jammu and Kashmir in the case of Nek Ram Sharma and Co vs. Income Tax Appellate Tribunal reported in (2011) 115 Taxman 636 (J & K). It is submitted that therefore, when it cannot be said that any substantial question of law arise. It is requested to dismiss the present appeals. 6.0.Shri Vivek Chavda, learned advocate for the assessee has made only one submission that the Tribunal has remanded the matter back to the CIT(A) for deciding the controversy afresh, it cannot be said that any substantial question of law or even the question had arisen from such an order. In support of his above submission, he has relied upon the decision of the Division Bench of the High Court of Jammu and Kashmir in the case of Nek Ram Sharma and Co vs. Income Tax Appellate Tribunal reported in (2011) 115 Taxman 636 (J & K). It is submitted that therefore, when it cannot be said that any substantial question of law arise. It is requested to dismiss the present appeals. 7.0. Heard the learned advocates for the respective parties at length. Perused the impugned judgment and order passed by the learned Tribunal. By impugned judgment and order passed by the learned ITAT, the Tribunal has remitted the matter back to the file of the learned CIT(A) for afresh adjudication by solely observing that ""we consider it expedient to restore the matter back to the file of the CIT(A) in the larger interest of justice with a view to enable the assessee to avail opportunity once more." No reasons whatsoever have been assigned by the learned ITAT and learned Tribunal has not at all observed anything on merits of the order passed by the learned CIT(A). Nothing is observed whether assessee was prevented from appearing before the learned CIT(A)and / or there were any justifiable reasons for the assessee not to appear before the learned CIT(A). The impugned order passed by the learned Tribunal is non speaking and unreasoned order. The manner in which, the learned Tribunal has disposed of the appeal is not at all appreciable and same cannot be sustained. Without any cogent reasons and / or justifiable reasons, the matters cannot be remitted casually and lightly. Merely by observing that that ""we consider it expedient in the larger interest of justice", a well reasoned order passed by the learned CIT(A) could not have been set aside in such a manner and the matter cannot be restored to the file by the learned CIT(A). Thus, the impugned order passed by the learned Tribunal can be said to be suffering from vice of arbitrariness, unreasonableness and therefore, interference of this Court is called for. It is true that normally High Court would not interfere with the order of remand passed by the learned Tribunal remanding the matter for fresh adjudication. However, provided the order passed by the learned Tribunal is backed by cogent reasons and does not suffer from any unreasonableness and arbitrariness like in the present case. The exercise of powers in such a manner and exercise of such appellate powers and passing the non speaking and non reasoned order and the orders which are passed by the Tribunal, which suffers from unreasonableness and arbitrariness and / or at the whims of the Tribunal not backed by any reason can be said to be pure question of law and therefore, interference of this Court is required. 8.0.It is required to be noted that in the present case right from very begging i.e. assessment proceeding, assessee was non cooperative. Number of opportunities were given by the AO, however assessee did not cooperate and even did not file any reply. Therefore, considering the material on record, the AO made addition as unexplained investment. Even before the learned CIT(A) also the assessee was non cooperative. Number of opportunities were given to the assessee to represent his case, however none remained present on behalf of assessee. Thereafter, the learned CIT(A) proceeded further with the appeal ex-parte and decided the appeal on merits and confirmed the order passed by the AO confirming additions of unexplained investment. Thus, even learned CIT(A) also decided the matter on merits. On going through the orders passed by the AO as well as learned CIT(A), we are of the opinion that in absence of any explanation by the assessee on the investment in question, AO was justified in making the addition of unexplained investment and thereafter learned CIT(A) was justified in confirming the same. Therefore, even the order passed by the learned CIT(A) which was on merits was not required to be interfered with by the learned CIT(A) and ought not to have been quashed and set aside without assigning any reasons. Under the circumstances, the impugned orders passed by the learned Tribunal cannot be sustained. 9.0.In view of the above and for the reasons stated above, the questions of law are answered in favour of the Revenue and against the assessee and impugned common judgment and order passed by the learned Tribunal in IT(SS) A No.117/AHD/2015 to IT(SS) A No.122/AHD/2015 is hereby quashed and set aside and the orders passed by the AO as well as learned CIT(A) are restored. All the appeals are allowed accordingly. No costs. sd/- (M.R. SHAH, J) KAUSHIK J. RATHOD sd.-(A.Y. KOGJE, J)