An order can’t be treated as non-speaking order just because it is short and to the point: HC

Case Details: Muvendar Trust v. ITO - [2021] 133 taxmann.com 303 (Madras)

Judiciary and Counsel Details

• • M. Sundar, J.
  • T. Ramesh and S. Radhakrishnan for the Petitioner. 
  • N. Dilip Kumar, Sr. Standing Counsel for the Respondent.

Facts of the Case

Assessee was registered ‘Public Charitable Trust’. Its registration was cancelled CIT, and the benefit of section 12AA was declined. The assessee filed the writ petition challenging the cancellation order. It was contended by the assessee that the impugned order passed by the CIT was a non-speaking order.

High Court Held

The Madras High Court held that an order passed by the AO could not be said to be a non-speaking order. Two critical paragraphs in the order had captured the crux and gravamen of the disputed matter. Said paragraphs had clearly records the trajectory and the reason for not extending Section 12AA benefit to the assessee.

Thus, those two paragraphs by themselves and the rest of the order clarify that it is not a non-speaking order, and it may at best be a terse order. An order can be tersely eloquent; it cannot be construed as a non-speaking order unless it is laconic, not when it is epigrammatic or merely because it is terse.

In the instant case, the assessee’s case was scrutinised because its registration had been cancelled, and trust failed to upload registration certificate u/s 12AA despite repeated reminders and opportunities. Thus., the assessment order passed called for no interference in the writ petition when it recorded the crux and gravamen of the matter i.e. trust was not entitled to exemption since its registration has been cancelled.

Therefore, the assessee’s argument that the order was a non-speaking order becomes a non-starter, i.e., an argument that does not take off.