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TMI Blog2014 (1) TMI 1544X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee u/s 10B of the Act. However, there is no reference in the assessment order about the commission said to be claimed by the assessee. Therefore, it is obvious that the payment of commission to the managing director, whole time director and vice president (marketing) was not subject matter of assessment in the assessment order. In other words, the assessing officer omitted to consider the claim made by the assesse towards payment of commission to managing director, whole time director and vice president (marketing). 4. The assessing officer being a quasi judicial authority is expected to consider all the claims made by the assessee and express his opinion in the assessment order. In other words, the assessment order shall be a speaking order. The very fact that the assessing officer omitted to discuss the claim made by the assessee towards commission to managing director, whole time director and vice president (marketing) clearly shows that the assessing officer failed to apply his mind to the claim made by the assessing officer. The assessing officer without application of mind allowed the claim. Therefore, this Tribunal is of the opinion that the non application of mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the recorded of reasons by an administrative authority services a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riness and caprice. If this requirement is insisted upon, then, they will be subject to judicial scrutiny and correction." If the order passed by the Tribunal is scrutinized in the light of the aforementioned proposition of law, we do not find any difficulty in setting aside the same on the ground of violation of the rules of natural justice. The flowery language used by the Tribunal to justify its acceptance of the respondent's plea that he did not know the law does not warrant our affirmation. In our opinion, the Tribunal was duty bound to record tangible and cogent reasons for upsetting well reasoned orders passed by the Assessing Officer and the Commissioner of Income-tax (Appeals). It should have directed its attention to the language of section 271D and 271E of the Act in conjunction with other provisions of the same family and then decided by a reasoned order whether the respondent had been able to make out a case for deleting the penalty. The order passed by the Tribunal should have clearly reflected the application of mind by the learned members." 6. The Apex Court also had an occasion to consider this issue in Toyota Motor Corporation vs Commissioner of Income-tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e orders are being passed by the income-tax authorities. In fact, the Allahabad High Court has observed as follows: "The income tax authorities are required to administer the Act. The right to administer, cannot obviously include the right to mal-administer. Thus, we find no words to express anguish as what kind of governance it had been. There is another reason for ignoring the aforesaid order, dropping the cancellation proceeding of registration. The said order does not contain any reason. Reasons introduce clarity in an order. Reason is the heart beat of every conclusion and without the same it becomes lifeless. (See Raj Kishore Jha Versus State of Bihar and others, AIR 2003 SC 4664). Even in respect of administrative orders Lord Denning M.R. in Breen Vs. Amalgamated Engineering Union, (1971) All. E.R. 1148) observed: "The giving of reasons is one of the fundamentals of good administration." Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision - taker to the controversy in question and the decision or conclusion arrived at. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ncalled for. It is also well settled principles of law that judicial order shall speak for itself and the reason for the conclusion reached in the judicial order shall contain in the order itself. Reason for a decision cannot be substituted or supplemented by way of an affidavit or otherwise. 9. In the case before us, the assessing officer has not applied his mind to the claim made by the assessee towards payment of commission to managing director, whole time director and vice president (marketing). In fact, application of mind does not reflect in the assessment order. In view of the above, we do not find any infirmity in the exercise of revisional jurisdiction u/s 263 of the Act by the Administrative Commissioner. 10. We make it clear that the assessing officer shall independently examine the claim made by the assessee towards commission to managing director, whole time director and vice president (marketing) without being influenced by any of the observations made by the Commissioner in the impugned order or by this Tribunal in this order and thereafter decide the same in accordance with law after giving a reasonable opportunity of hearing to the assessee. 11. With the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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