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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 ..... al jurisdiction u/s 263 of the Act by the Administrative Commissioner - 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 – Decided against Assessee. - ITA No. 260/Coch/2013 - - - Dated:- 16-8-2013 - Before Shri N.R.S. Ganesan (JM) and Shri B. R. Baskaran (AM),JJ. For the Appellant : Shri Joseph Markas, Shri Abraham Joseph Markas For the Respondent : Shri M. Anil Kumar, C.I.T. ORDER Per N.R.S. Ganesan (JM) This appeal of the assessee is directed against the order of the Administrative Commissioner dated 26-03-2013 u/s 263 of the Act for the assessment year 2008-09. 2. We heard Shri Jospeh Markas alongwith Shri Abraham Joseph Markas, the ld.counsels for the assessee and Shri M Anil Kumar, the ld.DR. 3. The assessing officer completed the assessment u/s 143(3) of the Act by an order dated 30-12-2010. However, the Administrative Commissioner in exercise of his revisional jurisdiction u/s 263 of the Income-tax Act found that the assessing officer omitted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he approach of this court is more in line with that of the American Courts. An important consideration which has weighed with the court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this court under article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under article 227 of the Constitution and that the reasons, if recorded, would enable this court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimize chances of arbitrariness in decision making. In this regard a distinction has been drawn between ordinary courts of law and tribunals and authorities exercising judicial functions on the ground that a judge is trained to look at things objectively uninfluenced by considerations of policy or expediency wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot therefore decide on considerations of policy or expediency. They must decide the matter solely on the facts of the particular case, solely on the material before them and apart from any extraneous considerations by applying pre-existing legal norms to factual situations. Now the necessity of giving reasons is an important safeguard to ensure observance of the duty to act judicially. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and excludes or, at any rate, minimizes arbitrariness in the decision-making process. Another reason which compels making of such an order is based on the power of judicial review which is possessed by the High Court under article 226 and the Supreme court under article 32 of the Constitution. These courts have the power under the said provisions to quash by certiorari a quasi-judicial order made by an administrative officer and this power of review can be effectively exercised only if the order is a speaking order. In the absence of any reasons in support of the order, the said courts cannot examine the correctness of the order under review. The High Court and the Supreme Court would be powerless to inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own reasonings which were required to be recorded by the Assessing Officer. According to the assessee, all relevant aspects were placed for consideration and if the officer did not record reasons, the assessee cannot be faulted. We do not think it necessary to interfere at this stage. It goes without saying that when the matter be taken up by the Assessing Officer on remand, it shall be his duty to take into account all the relevant aspects including the materials, if any, already placed by the assessee, and pass a reasoned order. 7. We also find that the Allahabad High Court in a recent unreported judgment expressed its shock and anguish the way in which the assessment orders and the revisional orders are being passed. In fact, the assessee, M/s Fateh Chand Charitable Trust in Writ Tax No.1629 of 2010 (judgment dated 27-05-2013) before the Allahabad High Court received donation of ₹ 5.23 crores. The assessing officer accepted the same without any enquiry and reasoning in the assessment order. The Commissioner of Income-tax initiated proceedings to cancel the registration u/s 12A of the Act. However, it was dropped without recording any reason. Subsequently, the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax is bad. In view of our above conclusion that the order dropping the proceeding under section 12A was not a valid action on the part of the Commissioner of Income Tax, the said argument is rejected. Having regard to what has been said above. We find that it is a case where the then Assessing Officer (Shri Bhopal Singh), the Additional Commissioner of Income Tax, Range-II, Muzaffarnagar and Shri Kundan Misra, the then Commissioner of Income Tax, Muzaffarnagar who passed the order dated 25.1.2008 have abdicated their duties. The Court in the exercise of supervisory jurisdiction under Articles 226 and 227 of the Constitution of India cannot be a mute spectator. Such actions on the part of the department not only bring disrepute to the department but also encourage the dishonest assessees and promotes the nefarious activities which not only causes loss to revenue but also promotes dishonesty. An honest tax payer feels cheated. Let the matter be examined by the Chief Commissioner of Income Tax and appropriate departmental proceedings may be taken out against the erring officials. A copy of this judgment may also be sent to the Chairman of the Central Board of Direct Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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