High Court cannot dispose of Tax Appeal with a One Paragraph Order: Supreme Court [Read Order]

A two-judge bench of the Supreme Court comprising Justice Uday Umesh Lalit and Justice S. Ravindra Bhat has held that the High Court is not justified in disposing of a tax appeal with a one-paragraph order without discussing the issues arising for consideration.

The Assessing Officer passed an order adding Rs.7,78,00,000/- to the total income of the assessee which order was challenged before the Commissioner of Income Tax (Appeals). The CIT (Appeals) found that an amount of Rs.6,36,50,000/- out of Rs.7,78,00,000/- was properly explained by the assessee while in respect of the remaining amount of Rs.1,41,50,000/-, the source was not properly explained and, as such, the CIT (Appeals) sustained the addition to the extent of the amount of Rs.1,41,50,000/-.

On appeal, the High Court held that both CIT(A), as well as Tribunal, have erred in deleting the addition of Rs.1.95 crore which was made under section 56(1) without mentioning the reason for the same.

On further appeal, the Apex Court granted relief to the department and held that “the High Court was not right and justified in disposing of the appeal with one paragraph order without discussing the issues which arose for consideration. We, therefore, allow this appeal, set aside the view taken by the High Court, and remit the matter back to the High Court for fresh consideration. Income Tax Appeal No.137 of 2018 is thus restored to the file of the High Court to be decided afresh and purely on its own merits.”

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) vs M/s. MOTISONS ENTERTAINMENT INDIA PVT. LTD.

CITATION: 2022 TAXSCAN (SC) 125

To Read the full text of the Order CLICK HERE

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