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TMI Blog2014 (12) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... rder - the CIT(A) should pass the order with giving the reasons – the same has also been provided under the Instruction issued by the CBDT in Instruction No. 1592 dated 7.1.85 F. No.262/38/84ITJ - the requirement of giving reasons for an order derives its authority from the principle that justice should not only be done but it also should seem to have been done - the duty to act judicially excludes the possibility of arbitrary exercise of the power - If reasons are required to be given for an order the same would be an effective restraint or potent weapon to check the abuse of power - It excludes from consideration extraneous or irrelevant matters – thus, the matter of compensation of ₹ 28,00,000/- is remitted back to CIT(A) to decided afresh order – Decided in favour of revenue. - ITA No. 279/PNJ/2013, ITA No.280/PNJ/2013, ITA No.281/PNJ/2013, ITA No.282/PNJ/2013, ITA No.283/PNJ/2013 - - - Dated:- 28-11-2014 - Shri P. K. Bansal And Shri D. T. Garasia,JJ. For the Appellant : B. Barthakur, Ld. DR For the Respondent : Dr. Vadhaman Jain, CA ORDER Per: D. T. Garasia (JM) The above all appeals have been filed by the department against the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any submissions. Final opportunity was on dated 15.1.2009 for making the submissions since there was subject matter to file a return in response to notice u/s. 148. 3.2. As per section sub-section (a) and (b) of Section 144, any person fails to make return required u/s.139(1), and fails to comply with all terms of notice issued u/s.142(1), the Assessing Officer after taking into account all the relevant material gathered and after giving the assessee an opportunity of being heard, make the best order. The Assessing Officer relied upon the decision of Bombay High Court in the case of Shreeram Durgaprasad Fathechand Narsingdas (esport) firm (R.B.Seth) v CIT(1988) 170 ITR 23 (BOM) wherein it has been held that where assessee does not response to notice issued u/s.148, it is permissible for the taxing authority to assessee him on the best judgment basis. The assessee do not comply the terms of notice u/s. 142(1) results in an order passed u/s.144 to the best of judgment of the Assessing Authority. The assessment was completed u/s. 147 r.w.s 144 of the I.T. Act 1961. 3.3 The matter carried to CIT(A) and CIT(A) has held that the order passed u/s. 147 r.w.s 144 was bad in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the said letter. The copy of the said letter is enclosed marked Annexure I. suddenly you have issued letter no. MISC/ITO/W1(1)/08-09 dated 02.01.09 marked Annexure II stating that you want to withdraw the aforesaid letter as my family s intention are bad. Although your letter is questionable and whimsical, I have filed return of income u/s. 142(1) of Income Tax act, 1961 with your office. However you have refused to accept my return as the returned income was more than ₹ 5 lakhs nad you have no jurisdiction to act on the said letter. I was told to file my return with ACIT Circle 1 (Panaji), Goa, It was also confirmed with the ACIT Circle 1 that his office can accept the said ROT. Accordingly return was accepted vide Acknowledgement No.0111001192 dated 14.01.2009. 1 am enclosing the copy of Acknowledgment market Annexure III. I am really surprised how the assessments are being made by you when you have no jurisdiction as you yourself had told me. Our authorized representative had been to your office several times. However you have not made notings in your file. You are also not maintaining Diary of Visitors. All the time you are harping that I should accept whatever base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the A.O. vide my predecessor s letter dated 12.07.11., wherein he had requested A.O. to examine the submission and the documents submitted by the appellant after adequate opportunity of being heard to the assessee. However, it is clear from the Remand Report that the A.O. has not all examined the submission and the documents. Therefore, the documents submitted by the appellant are being treated as correct, and decision is arrived as under: 10.1. Since the property came in through inheritance, the indexation has to given from 01.04.81. 10.2. The appellant has correctly valued the land@ ₹ 50 per sq. mtr. On the basis of comparative sale price as nearing that date. The rate of ₹ 9/- per sq. mtr. Adopted by the AO is not correct on the basis of facts of this case. 11. Thus, on the basis of facts of this case and the legal position, in my opinion: i. The A.O. was not correct in issuing notice u/s 148, when time for normal scrutiny u/s 143(3) was available. ii. The AO. was not justified in not issuing any Notice u/s 143(2), before initiating and concluding the assessment. iii. The A.O. was not justified in not giving adequate opportunity of being heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal opportunity on 3.2.2009. The assessee did not remain present. There was survey u/s. 133(A) was conducted on 24.09.2008. The following facts revealed by post survey- - In computation of capital gains, the cost inflation index year was taken as 1981-82. The ancestral property had come to the assessee during FY 1987-88 as per section 49(1)(iii)(a) by way of succession / inheritance. As per Explanation (hi) of section 48 of I T Act, the year to be taken is the year in which the asset becomes the property of the assessee or for the financial year 1961-82, whichever is later. So, the cost inflation index year to be adopted is 1987-88 and not 1981-82 as adopted by the assessee. - From the sale consideration amount, an expense of ₹ 28 lakhs was claimed on account of Tenant settlement. It was noticed that in Form I IV, the names of the persons to whom payments were made, as claimed by the assesses, did not appear in the occupants column as was seen from the sale deed dated 06. 07.2006. -The land rate as on 01.04.1981 was adopted @Rs11.65 per sq.mtr in the computation of capital gains in respect of property # Plot No 4B, RIBEIRO PEQENO , Ribandar, Tiswadi, Ilhas North G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: *Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject-matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. As per section 147 empowers Assessing Officer to assess or re-assess any income chargeable to tax which has escaped assessment. He can assess or re-assess this income if reason to believe that income has escaped assessment for any assessment year subject to provisions of Section 148 and 153 of the Act., w.e.f 1.4.1989. The Assessing Officer can assess the escaped income for which he has formed a belief also other income chargeable to tax has subsequently come to his notice in the course of proceeding under this section and re-compute the loss depreciation allowance or any other allowance as the case may be. In this case, the Assessing Officer has obtained the information by the conducting a survey u/s. 133A of the Act and AO was in posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not allow and CIT(A) has allowed it. Therefore, the department is in appeal before the Tribunal. 4.1 The learned DR submitted that CIT(A) has allowed the compensation of ₹ 28,00,000/- which was paid by the assessee for settlement with the tenants who were cultivated land in dispute. 4.2 The learned AR submitted that the Department is in appeal against under Section 144 r.w.s 147 of the I.T. Act. During the course of hearing the Bench has informed to the AR that the CIT(A) has passed the order u/s. 144 r.w.s. 147 is illegal. The learned AR agreed that the CIT(A) has not passed the reasoned order while allowing the claim of the deduction of sale consideration which was paid to the tenants. The learned AR has no objection if the matter is restored to CIT(A) for fresh consideration. 4.3 We have heard the rival contention of both the parties. Looking to the facts and circumstances of the case, we gone through the order of CIT(A). The CIT(A)has allowed the claim of ₹ 28,00,000/- of the assessee without passing any speaking order. We are of the view that the CIT(A) should pass the order with giving the reasons. We find that the departmental authorities were instructe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... straint or potent weapon to check the abuse of power. It excludes from consideration extraneous or irrelevant matters. As observed by Subha Rao J., as he then was, in Madhya Pradesh Industries Ltd. v. Union of India, AIR 1966 SC 671, that a Speaking order will at its best be a reasonable and at its worst at least a plausible one . The insistence for giving reasons in an order introduces clarity and prohibits an authority from taking into consideration irrelevant and illegal matters while deciding a case before it. It further creates confidence in the public mind. Another ground which is often advanced in taking the view for giving reasons is based on the power of judicial review conferred by the Constitution on the High Court under Article 226 of the Constitution and the Supreme Court under Article 32. Dealing with this aspect, the Supreme Court observed in Travancore Rayons Ltd. v. Union of India, AIR 1971 SC 862 at page 866 thus: The Court insists upon disclosure of reasons in support of the order on two grounds one, that the party aggrieved in a proceeding before the High Court of this Court has the opportunity to demonstrate that the reasons which persuaded the author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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