2005 (1) TMI 28 - HC - Income Tax

High Court quashes Tribunal's order on assessment year 1991-92 citing lack of reasons, emphasizes evidence consideration

Nirman Textile Mills P. Limited Versus Assistant Commissioner of Income-Tax.

The High Court quashed the Tribunal's order regarding the addition amount for an assessment year 1991-92, citing the lack of reasons provided for ... Order of tribunal - 'Whether the order of the Tribunal can be said to have been made in accordance with law and is not perverse when the decision reverses the order of the Commissioner of Income-tax (Appeals) without giving any reasons?' – In 1959 in case of Omar Salay Mohamed Suit v. CIT, the apex court had observed that if the Tribunal arrives at its own conclusion of fact after due consideration of evidence before it the court will not interfere, but for this purpose it was necessary that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the points for determination before it, and what was the evidence pro and contra in regard to each of the issues and what were the findings reached on the evidence on record - This position has been reiterated once again in 2002 by this court after referring to the aforesaid judgment in the two decisions – therefore, impugned order of the Tribunal is quashed and set aside and the matter is restored to the file of the Tribunal for the purposes of adjudication afresh in the light of the well established legal principles enunciated by the apex court and this court. Issues:Appeal arising from Tribunal's order for assessment year 1991-92, Tribunal reversing Commissioner of Income-tax (Appeals) order without reasons.Analysis:The appeal before the High Court pertained to an assessment year 1991-92 where the Tribunal reversed the order of the Commissioner of Income-tax (Appeals) without providing reasons. The substantial question of law was whether the Tribunal's decision was lawful and not perverse. The court considered relevant decisions and directed the appellant to file the paper book submitted before the Tribunal for further review.The case involved a private limited company's assessment for the year 1991-92. The Assessing Officer disallowed a sum towards unaccounted purchase of yarn based on findings during a survey at the company's premises. The Commissioner of Income-tax (Appeals) partially granted relief after considering evidence presented by the assessee in the form of paper books. The Tribunal, in its order, reversed the Commissioner's decision and restored the addition made by the Assessing Officer, leading to the appeal before the High Court.The High Court noted that the Tribunal failed to provide reasons for reversing the Commissioner's decision, as required by legal principles. The court emphasized the importance of considering all evidence before arriving at a conclusion. It highlighted the necessity for the Tribunal to clearly state the points for determination, evidence considered, and findings reached, as per established legal standards. The court referred to past judgments emphasizing the need for thorough consideration of evidence before making a decision.Consequently, the High Court quashed the Tribunal's order regarding the addition amount and remanded the matter back to the Tribunal for a fresh adjudication in line with legal principles. The appeal was allowed, and the reference was disposed of with no costs imposed.