Vishnu Packaging Pvt. Ltd vs ACIT

(A) This appeal has been filed by Assessee against the impugned appellate order dated 30.06.2017 passed by Learned Commissioner of Income Tax (Appeals)-1, Noida, [in short, “Ld.CIT(A)”] pertaining to Assessment Year 2010-11, on the following grounds:

“1. That the order of the Ld. CIT(A) passed u/s 250 of the Income Tax Act, 1961 is bad in law and on facts.

That the Ld. CIT(A) has exceeded his jurisdiction by directing the Ld. AO to proceed in terms of Section 150 of the Income Tax Act, 1961 and reframe assessment order as per law and after complying with the prescribed procedure.

That the appellant craves leave to add, alter, amend, substitute, delete and modify any or all the grounds of appeal, which are without prejudice to one another, before or at the time of hearing of the appeal.”

(B) The Assessing Officer issued notice under Section 148 of Income Tax Act, 1961 (“I.T. Act”, for short) dated 22.03.2013 and initiated proceeding under Section 147 read with Section 148 of I.T. Act, after recording the reasons on file. Assessment Order dated 27.03.2014 was passed by the Assessing Officer (“AO”, for short) wherein total income was assessed at Rs. 1,00,00,000/- as against returned income of Nil. In the aforesaid Assessment Order dated 27.03.2014, the addition of Rs. 1,00,00,000/- was made under Section 68 of I.T. Act. The Assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 30.06.2017, Ld. CIT(A) directed the Assessing Officer to reframe the Assessment Order as per law. In effect, the aforesaid direction of the Ld. CIT(A) was tantamount to setting aside of the Assessment Order. This present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 30.06.2017 of Ld. CIT(A). During the appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short), written submissions vide letter dated 20.11.2019 were filed from the assessee’s side, which is reproduced below for ease of reference:

”

(B.1) A Paper Book was also filed from the assessee’s side during the appellate proceedings in ITAT, containing the following particulars:

“1. Copy of ITR Acknowledgment for AY 2010-11

Computation of Income for AY 2010-11

Copy of Financial statement for the year ended 31.03.2010

In respect of additions of Rs. 1,00,00,000/- u/s 68 of the Act

Reply dated 11.03.2014 furnished to Ld. AO

Reply dated 06.03.2014 furnished to Ld. AO

Reply dated 19.03.2014 furnished to Ld. AO alongwith following documents:

a. List of parties to whom loans were taken

b. Copy of loan confirmation

c. Copy of PAN card

d. Copy of relevant bank statement

Reply dated 25.03.2014 furnished to Ld. AO

Copy of Assessment Order dated 23.12.2018

Notice dated 16.11.2017 issued u/s 143(2) of the Act

Notice dated 04.09.2018 issued u/s 142(1) of the Act

Notice dated 17.10.2018 issued u/s 142(1) of the Act

Notice dated 29.10.2018 issued u/s 142(1) of the Act

Reply dated 22.10.2018 furnished to Ld. AO on 24.10.2018.”

(C) At the time of hearing before us, representatives of both sides, Ld. Counsel for assessee, as well as Ld. Departmental Representative, were in agreement that the impugned appellate order dated 30.06.2017 of Ld. CIT(A) is a non-speaking order as far as merits of the appeal are concerned. Both sides were in agreement that the Ld. CIT(A) may be directed to pass afresh order on merits of the disputed issue in this appeal, through a speaking order on merits. After hearing both sides, and after perusal of records, we find that the Ld. CIT(A) has directed the Assessing Officer to re-frame the Assessment Order as per law. This direction is tantamount to setting aside the Assessment Order of the Assessing Officer for passing a fresh Assessment Order. However, with effect from 01.06.2001, the Ld. CIT(A) has ceased to have power to set aside the Assessment Order of the Assessing officer and to direct the Assessing Officer to pass a fresh Assessment Order. The power of the CIT(A) to set aside the Assessment Order was withdrawn through amendment to Section 251(1)(a) of I.T. Act with effect from 01.06.2001. Thus, while the CIT(A) has powers to confirm, reduce, enhance or annul the Assessment, with effect from 01.06.2001 the CIT(A) has no power to set aside the Assessment Order and direct the Assessing officer to pass a fresh Assessment Order. Moreover, both sides have agreed at the time of hearing before us, that the impugned appellate order dated 30.06.2017 of Ld. CIT(A) is a non-speaking order on merits of the issues in the dispute in respect of the appellate proceedings then pending before the Ld. CIT(A). As per Section 250(6) of I.T. Act, the CIT(A), while disposing of the appeal, is required to state, in his order, the points for determination, decision thereon and reason for the decision. The relevant provisions under I.T. Act are contained in Section 250(6) of I.T. Act. A perusal of the above provisions of law shows that U/s 250(6) of I.T. Act the Ld. CIT(A) was obliged to dispose of the appeal in writing after stating the points for determination and to then pass an order on each of the points which arose for consideration; and the Ld. CIT(A) was further obliged to state the reasons for his decision on each such points which arose for determination. In the present appeal before us, the Ld. CIT(A) has passed a summary order without deciding the issues on merits, which is in violation of Section 250(6) of I.T. Act. The CIT(A) is duty bound under Section 250(6) of I.T. Act to pass a speaking order on merits on all the issues in dispute which arise for his determination in the appellate proceedings before the Ld. CIT(A). On perusal of the impugned appellate order dated 30.06.2017 of Ld. CIT(A) we find that he has failed to comply with this requirement prescribed under Section 250(6) of I.T. Act.

(D) In view of the foregoing, we are of the view that the impugned appellate order dated 30.06.2017 of Ld. CIT(A) not only fails to comply with the requirements under Section 250(6) of I.T. Act; but is also violative of amended provisions of law contained in Section 251(1)(a) of I.T. Act with effect from 01.06.2001. In the fitness of things, therefore, and as both sides agreed to this before us at the time of hearing, we are setting aside the impugned appellate order dated 30.06.2017 passed by Ld. CIT(A) and we are restoring all the issues in dispute to the file of the Ld. CIT(A), with the direction to decide the issues in dispute afresh, through a speaking order, on merits, in accordance with law. All the grounds raised in the present appeal before us are treated as disposed off in accordance with the aforesaid direction. For statistical purposes, the appeal is partly allowed.

(E) In the result, appeal filed by assessee is partly allowed.