INCOME TAX ACT, 1961

Section 250

Appeal (CIT (A)) - Order of CIT (A) - Validity - CIT (A) dismissed stay application filed by assessee without providing proper opportunity of hearing

Assessee-company submitted return showing total income and net tax payable. But the same was not accepted that resulted into issuance of notice under section 143(2) and after scrutiny of books of account, a demand was raised upon the assessee. Accordingly, the assessee preferred an appeal before CIT (A) along with stay application; however, the said application was dismissed. Assessee contended that the CIT (A) erroneously dismissed the application for stay relying upon Circular dated 31-7-2017 commanding it to deposit 20% of the demanded amount and there was no reference to the arguments or Circular dated 29-2-2016, whereby an option was given to the similarly situated persons for keeping the sale proceeds either in capital gain or in stock-in-trade. Held: On perusal of order of CIT (A), it was found that the said order was not only bereft of the reasoning but had been passed in a most sketchy and mechanical manner. It is settled that quasi-judicial authorities like CIT (A) are also legitimately expected to refer to the arguments submitted in support of the interim prayer sought in support of the memorandum of appeal preferred against the assessment orders and cannot blindly apply the Circular, as in the instant case. Even the order of the CIT (A) did not reflect whether opportunity of hearing was given to the assessee. Further, there was neither any advertence to the Circular dated 29-2-2016, nor the arguments submitted by the assessee in support of interim stay. Accordingly, the order of the CIT (A) was set aside and the matter was remanded to the CIT (A) to re-consider the stay application and pass a detailed order, after affording opportunity of hearing to the assessee.

REFERRED :

FAVOUR : Matter remanded

A.Y. :

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