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TMI Blog2013 (6) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... AND HARYANA HIGH COURT] and M/S FATEH CHAND CHARITABLE TRUST VERSUS COMMISSIONER OF INCOME TAX AND ANOTHER [ 2013 (6) TMI 67 - ALLAHABAD HIGH COURT] and Apex Court, it is obligatory on the part of the assessing officer to record reasons in the assessment order. Recording of reason would not only enable the revisional / appellate authorities to discharge their function effectively but also repose confidence in the system. The appeal of Assessee thus was rejected. - ITA No. 116/Coch/2012 - - - Dated:- 28-6-2013 - Shri N.R.S. Ganesan (JM) and Shri B.R. Baskaran(AM) Appellant by :Shri T.M. Sreedharan,sr counsel Respondent by : Smt. Susan George Varghese O R D E R Per N.R.S. Ganesan (JM) This appeal of the assessee is directed against the order of Administrative Commissioner dated 20-03-2012 for the assessment year 2007-08. 2. Shri T.M. Sreedharan, the ld.senior counsel for the assessee submitted that the assessing officer after detailed enquiry accepted the return of income including the payment of interest on the funds borrowed on personal account. The Administrative Commissioner, however, found that tax was deducted at source on the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue. The ld.DR pointed out that the assessment order being a quasi judicial order has to contain reasoning for the conclusion. According to the ld.DR, the assessment order shall be a speaking order. 8. We have considered the rival submissions on either side and also perused the material available on record. We have also gone through the assessment order as well as the order of the Administrative Commissioner. The assessment order does not contain any reasoning. The assessing officer without any discussion accepted the return filed by the assessee. It is not in dispute that the proceedings before the assessing officer are judicial proceedings. A decision in a judicial proceeding shall be a speaking one. In other words, the order of the assessing officer shall contain reasons for the conclusion reached therein. This Tribunal is of the considered opinion that the assessment order shall indicate the application of mind of the concerned assessing officer to the materials available on record. It is well settled principles of law that judicial / administrative orders shall speak for themselves. The reason for the conclusion shall contain in the order itself. The reason for the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nity has to be given. All that is required before reaching a decision is the Commissioner shall give an opportunity to the assessee. We have also carefully gone through the provisions of section 263 of the Income-tax Act, 1961. The provisions of section 263 of the Income-tax Act, 1961 are identically worded as that of section 33B of the Income-tax 1922. Therefore, the observation of the Apex Court in regards to section 33B of the Income-tax Act, 1922 is squarely applicable even in respect of provisions of section 263 of the Act. Therefore, this Tribunal is of the considered opinion that what is required by section 263 of the Act is to give an opportunity to the assessee before taking a decision. In this case, such opportunity was given, therefore, this Tribunal do not find any infirmity in the notice issued by the Administrative Commissioner. 11. It may not be out of place to point out that the order of assessment being quasi judicial order, the assessing officer is expected to record his own reasoning for the conclusion reached therein. Unless such reasons are recorded, the purpose of providing revisional / appellate jurisdiction in the Income-tax Act would be defeated. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ministrative authority in an order passed by it while exercising quasi-judicial functions, would no 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 quasijudicial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltified and no redress being available to the citizen, there would be insidious encouragement to arbitrariness 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. 13. The Apex Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. While considering the wit petition, the Allahabad High Court expressed its shock and anguish on the way in which the 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 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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