Appeal u/s. 260A – High Court ought to give its findings in detail – High Court should not set aside the order of the Tribunal in an appeal filed by the Department without hearing the assessee.

The appellant, an individual was a partner in M/s. Mahajan Exports, Panipat and M/s. Maspar, Panipat deriving business income, income from salary and income from house property. A search was conducted under section 132 (1) at his residential and business premises. Pursuant to a notice under section 158BC, the appellant filed his return for the block period declaring total undisclosed income at ‘nil’. The assessment was completed after scrutiny, determining total undisclosed income at ‘nil’. The said assessment order was set aside by the Commissioner u/s. 263 with a direction to make the assessment de novo on the following matters:

(a) cash found at the premises of the assessee at Panipat house,
(b) cash found at the Delhi house;
(c) unsecured loans, and
(d) fresh investment

The order of Commissioner u/s. 263 was set aside by the Tribunal, observing that the appellant had filed detailed explanation and supporting evidence on the basis of which the Assessing Officer had made due enquires while passing the assessment order, after obtaining necessary approval from his superior officer u/s. 158BC of the Act. The High Court set aside the order of the Tribunal in an appeal filed by the Department. On an appeal to the Supreme Court by the appellant, the Supreme Court noted that the appellant was not heard by the High Court and that the review application was also dismissed by the High Court.

The Supreme Court set aside the judgment of the High Court and remitted the case for de novo consideration observing that the High Court ought to have given its findings in detail, particularly on the question whether there was any error of law in the decision of the Tribunal and whether that error caused prejudice to the Revenue.