TaxTMI 
TaxTMI 
2014 (6) TMI 154
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....f the Act were started by a notice dated 8th May, 2008. The particulars of mistakes, appearing from the notice, proposed to be rectified were as follows: "a) Amount received from BDF (Rs.18 Crores) as Compensation is taxable under the head "other source of income". b) Excess deduction allowed u/s.80IB amounting to Rs.1,24,45,885/-. c) Excess debit of Royalty Rs.46,61,828/-. d) Excess allowance of Royalty paid by Rs.24,77,129/-. e) Excess debit on account of consumption of Raw Materials by Rs.1,56,59,363/." 3. The proceedings under Section 154 were, however, dropped by an order dated 9th November, 2009 holding that the issues were debatable and also required further investigation/enquiry. 4. A notice, thereafter, under Section 263 of the Act was issued on 26th November, 2009 by the CIT proposing to revise the order dated 28th March, 2008 due to the following defects:- "I) During the said A.Y., you have received a sum of Rs.18.00 Crore from MYS Beierdorf AG., Germany (BDF) as an one-time settlement for termination of contracts of producing and selling of the products of the latter company in India as well as issuing a NOC fo....
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....he Apex Court in Malabar Industrial Company Ltd. V. CIT (2000) 243 ITR 83 (SC). Moreover, non application of mind by the AO to the issues stated above also justifies action u/s 263 CIT V. Emery Stone Mfg. Co. (1995) 213 ITR 843 (Raj.) In view of the discussions made in the earlier paragraphs, the assessment order u/s 143 (3) passed by the AO on 28/03/2008 is considered to be erroneous and prejudicial to the interest of the revenue so far as the above mentioned issues are concerned. Accordingly, the assessment order is set aside on the above mentioned issues and the AO is directed to pass fresh assessment order after giving reasonable opportunity of being heard to the assessee on such matters." 6. Challenging the aforesaid order dated 1st March, 2010, the assessee approached the learned Tribunal. By the impugned judgment and order dated 13th April, 2011 the Tribunal has set aside the order dated 1st March, 2010. The appeal in the circumstances has been preferred by the revenue. 7. The questions of law raised in the appeal by the Revenue, are as follows :- "i) Whether on the facts and in the circumstances of the case the Ld. Tribunal has erred in law in quashi....
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.... have been formulated as follows :- (a) Whether the Tribunal was justified in taking the view that the Assessing Officer by the order dated 28th March, 2008 passed under Section 143(3) of the Act took a possible view? (b) In case the answer to the above question is in the affirmative, can it still be said that the order is erroneous and prejudicial to the interest of revenue? (c) Whether the assessment order dated 28th March, 2008 was passed by the Assessing Officer without application of mind? (d) Whether the Tribunal was justified in setting aside the order passed by the Commissioner of Income Tax under Section 263 without examining all the four issues appearing from the notice under section 263 ? (e) Whether the order passed by the Tribunal is perverse ? 10. The main thrust of the arguments advanced on behalf of the Revenue by Mr. Nizamuddin, is directed against the third question formulated above, whereas the main thrust of the arguments of the assessee are directed against the first and the second questions formulated above. 11. The first judgment relied upon by Mr. Nizamuddin is a judgment in the case of CIT vs. M. M. Khambha....
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....eeding was initiated, in our opinion, the contesting parties could bring the same to the notice of the Commissioner so as to enable him to take into consideration the subsequent events also. It goes without saying that if and when the Commissioner of Income-tax takes up for consideration a subsequent event, the assessee would be entitled to make its submission also in regard thereto." 13. Mr. Poddar contended that the real issue is, (a) whether the Assessing Officer took a possible view and (b) whether the order of the Assessing Officer is unsustainable in law as regards which not one submission was made by the appellant. 14. The case of the CIT in his notice dated 26th November, 2009 under Section 263 of the Act reads as follows :- "1. During the said A.Y., you have received a sum of Rs.18.00 Crore from M/s. Beierdorf AG., Germany (BDF) as one-time settlement for termination of contracts of producing and selling of the products of the latter company in India as well as issuing a NOC for setting up a 100% subsidiary by them in India. The said receipt should have been considered as income in the ambit of either Sec.28 or Sec.56, if the same is considered as voluntary ....
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....assured period of five (5) years based on five per cent (5%) royalties per annum." 17. The contract between the assessee and the German concern continued for another term of five years after expiry of the initial five years and was thus to come to an end on 31st December, 2005. 18. Before the contract came to an end on 31st December, 2005, an agreement dated 22nd March, 2005 was entered into between the assessee and the German concern whereunder the German concern agreed to pay a sum of Rs.180 millions for the following reasons appearing from the agreement dated 22nd March, 2005 :- "i. JLM has agreed to BDF establishing a wholly owned subsidiary in India (hereinafter referred to as "BDF India" for the purpose of this Agreement) for the purpose of carrying on the business of manufacturing, marketing and sale, importing and exporting of various products, in particular cosmetics and toiletries and other Beiersdorf consumer products (hereinafter referred to as the "Products"). JLM hereby acknowledges the above and further confirms that it shall provide all necessary support and assistance that may be required by BDF to set up its subsidiary in India and to carry out its ....
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....ear from the ground no.1, in the notice under Section 263 of the Act. Mr. Poddar contended that the question, therefore, is whether this sum of Rs.18 crores is a receipt in the nature of capital or in the nature of revenue. In case it is a receipt in the nature of capital, it is not taxable. If it is a receipt in the nature of revenue, it is certainly taxable. 20. In seeking to answer this question, Mr. Poddar commenced by submitting that all sorts of receipts are not income. He drew our attention to the case of Parimisetti Seetharamamma vs. Commissioner of Income-tax reported in [1965] 57 ITR 532, in support of his aforesaid submission, wherein the following view was expressed :- "By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision." 21. Mr. Poddar then took us through the Sections 28 and 56 of the Income Tax Act and contended that the receipt in question of a....
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....e under the Income-tax Act. In our opinion, the High Court, with all due respect, was in error in holding that this amount was taxable. The answer to the first question must therefore be against the department." 25. The next judgement cited by Mr. Poddar was in the case of Kettlewell Bullen & Co. Ltd. vs. Commissioner of Income-tax reported in [1964] 53 ITR 261 (SC) wherein the following views were expressed :- "On an analysis of these cases which fall on two sides of the dividing line, a satisfactory measure of consistency in principle is disclosed. Where on a consideration of the circumstances, payment is made to compensate a person for cancellation of a contract which does not affect the trading structure of his business, nor deprive him of what in substance is his source of income, termination of the contract being a normal incident of the business, and such cancellation leaves him free to carry on his trade (freed from the contract terminated) the receipt is revenue: Where by the cancellation of an agency the trading structure of the assessee is impaired, or such cancellation results in loss of what may be regarded as the source of the assessee's income, the paymen....
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....the agency terminated, or for loss of goodwill, is prima facie of the nature of a capital receipt." 27. The question as to the nature of a capital receipt was discussed by their lordships at page 287 of the report which is as follows:- "The principal question in dispute is whether the amounts received by the appellant as compensation for loss of agency are of the nature of capital or revenue. It is necessary in the first instance to eliminate two subsidiary contentions raised by the appellant. It was urged that the amounts received by the appellant were in lieu of compensation for cancellation of the agency by the principal company, for loss of goodwill of the appellant's business, and also in consideration of the appellant's agreeing not to carry on any competitive business in explosives or other commodities in which business was carried on by the appellant under the agency agreement. It cannot seriously be disputed that compensation paid for agreeing to refrain from carrying on competitive business in the commodities in respect of which the agency was terminated, or for loss of goodwill would, prima facie, be of the nature of a capital receipt. But there is no evidenc....
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.... 30. Mr. Poddar submitted on the basis of the aforesaid authorities that there can be no doubt as regards the fact that the receipt of the sum of Rs. 18 crore from the German concern by the assessee is in the nature of a capital receipt, therefore, not taxable. Mr. Poddar contended, the assessing officer has accepted the case of the assessee that the receipt of a sum of Rs. 18 crore was a capital receipt. The learned Tribunal by the impugned judgment and order held that the view taken by the Assessing Officer was a possible view and the contention of the CIT was overruled. Therefore, the question to be further considered is whether the view taken by the Tribunal is in accordance with law. Mr. Poddar pointed out that in the case of Malabar Industrial Co. Ltd. vs. CIT (supra), also relied upon by Mr. Nizamuddin, the following views were expressed at page 88 of the report:- "For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial t....
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....e not tenable. Besides, admittedly the amount received is a voluntary payment by BDF as a goodwill gesture. The case laws cited by the assessee are distinguishable on facts. Moreover, it is apparent from the record that the AO did not examine/verify or consider the matter at the time of passing the order." 34. Mr. Poddar contended that the views expressed by the CIT do not bring the receipt of the sum of Rs.18 crores either within the purview of Section 28 or within the purview of Section 56 of the Act. The contract between the assessee and the German concern was due to expire on 31st December, 2005 without any further exercise on either side. Therefore, it cannot be said, according to him, that this payment of a sum of Rs.18 crores is relatable to the termination of the contract on 31st December, 2005. The stipulations in the agreement dated 22nd March, 2005 that BDF will use the services of the assessee's Waluj plant or that the assessee would be appointed agent for the products to be manufactured by the German concern, are all in the nature of agreements to agree in future. It is nobody's case that the Waluj plant of the assessee was either leased out or licensed to the Germa....
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....tion with Foreign Investment Promotion Board (FIPB) to facilitate BDF to set up 100% subsidiary in India. 35. The assessee agreed not to put up any hindrance nor to prevent the German concern from setting up its 100% subsidiary but the fact is that the assessee was not entitled to put up any hindrance or to continue to use the technical know-how transferred to the assessee by the agreement dated 14th September, 1995 even for an hour after expiry of the period limited thereby. The assessee was liable in the facts and circumstances of the case to issue a no objection certificate to the German concern in any case. He submitted that it is precisely for this reason that the payment of a sum of Rs.18 crore was considered to be a payment by way of goodwill gesture. Mr. Poddar concluded by saying that in the facts and circumstances of the case the views expressed by the CIT in exercise of power under Section 263 were altogether erroneous and not sustainable in law. 36. The second ground appearing from the notice under Section 263 is as follows:- "2) You have been allowed to debit Rs.1,32,11,353/- as Royalty paid to BDF during the said A.Y. for exclusive use of their Trade Ma....
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..... Identical approval was also granted by the Ministry of Commerce and Industries, Government of India by its letter dated 12th June, 2001 which provides as follows:- "4. Payments authorised herein under : (a) Royalty % age (Net of/sub. to taxes) (i) Internal sales 5.00% (Five percent) Subject to taxes (ii) Exports 5.00% (Five percent)" 40. Mr. Poddar contended that in the facts and circumstances, the following views expressed by the CIT with respect to the second ground are altogether unmeritorious. "The contentions of the assessee-company are not reasonable since technology transfer is not the same thing as allowance of use of know-how. Besides, it is apparent from the record that the AO did not examine/verify or consider the matter at the time of passing the order." 41. The third ground appearing from the Notice under Section 263, issued by the CIT, reads as follows :- "It is now judicially well settled that the expenditure towards payment of Royalty for the reasons discussed above is partly capital in nature and hence, one-fourth i.e. 25% of the same is required to be disallowed for being capital in nature. But, no such....
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....ation relating to manufacture, licence, or rights, for any of the products in question in India thereby conferring on the assessee exclusive right of manufacture and the sale of the products. The right to manufacture certain goods exclusively in India should be taken to be an independent right secured by the assessee from the foreign company which was of an enduring nature. Consequently, the entire technical fees could not be allowed as a revenue expenditure. The Tribunal was, therefore, right in its view that 25% of the technical aid fees would have to be taken as being capital in nature." 45. Mr. Poddar contended that the aforesaid judgment of the Madras High Court has no manner of application to the facts and circumstances of this case because the contract between the assessee and the German concern provided as follows:- "11.5. Upon the termination or expiry of this Agreement for whatever reason the Licensee shall cease to make any use of the Trade Marks, the Know-how or the Copyrights save that if the Licensee has a stock of Products existing or in the course of manufacture or unfulfilled orders on hand at the date of termination or expiry of this Agreement the Lice....
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....ltimately decided against the assessee by the CIT as follows:- "4) Addition on account of Raw Material: The contentions of the assessee are as follows:- The difference in the figures of raw material consumed as debited in the P/L account and as shown in schedule-10 on the one hand and as shown in schedule-17 of notes on the other hand is due to the reason that as per item no. 3(ii)(a) of Part-II of Schedule-VI to the Companies Act, 1956, the quantitative details as given in schedule of notes are provided in respect of those items only which individually account for 10% or more of the total raw material consumption and not in respect of each and every item of raw material consumed and it is quite natural that the figure of only major raw material shown in schedule of notes to accounts will not match with the total figure of raw material consumed reflected in P/L account but that difference is due to disclosure requirements of quantitative details of raw materials only and does not reflect any discrepancy in accounts so as to call for any addition on this count. The contentions of the assessee are not reasonable since there is nothing in the Notes ....
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..... Mr. Poddar thus contended that all the points raised in the notice under Section 263 of the Act were without any merit. The assessee had replied to the notice under Section 263 and also made his submissions. The CIT without considering the reply and the submissions advanced at the time of hearing passed the order directing the assessing officer to pass a fresh assessment order without any valid reason. Mr. Poddar contended that a statutory authority cannot clothe itself with the jurisdiction to pass an order by deciding the basic question wrongly. The questions raised by the CIT in his notice were adequately answered. He chose to decide them wrongly and on that basis assumed jurisdiction to exercise power under Section 263 of the Act. 53. Mr. Poddar in support of his submission drew our attention to the judgment in the case of Raza Textiles Ltd. vs. ITO, reported in 87 ITR 539 (S.C) wherein the following views were expressed: ' No authority, much less a quasi-judicial authority, can confer jurisdiction on itself by deciding a jurisdictional fact wrongly. The question whether the jurisdictional fact has been rightly decided or not is a question that is open for examina....
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....njab and Haryana) wherein the Division Bench expressed the following views:- "10. A perusal of the reasons given by the Tribunal as also the Commissioner quoted above shows that the Tribunal assumed it to be the requirement that the Commissioner should have recorded final conclusion on taxability. This view is legally erroneous. The Commissioner could have proceeded under section 263 of the Act if the Assessing Officer had made assessment without application of mind. The Commissioner held that as per the order sheet no record was produced while in the order a contrary statement was made. The order of the Assessing Officer did not show the verification of closing stock, purchases and transportation and other items mentioned above. These reasons were valid reasons for exercise of power under section 263 of the Act. The Tribunal held that the Assessing Officer was not required to discuss these aspects in its order and that the assessee had explanation to the points made by the Commissioner. This approach of the Tribunal cannot be sustained." 59. The aforesaid judgment does not really help the revenue because the Division Bench of the Punjab and Haryana High Court in that c....
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....r expiry of the contract as discussed above. The point as regards excess sum of Rs.1,56,59,363/- having been allowed to be debited on account of raw material consumed is obviously based on a misunderstanding of the nature and purpose of notes on accounts required under the Companies Act. 64. We are, as such of the opinion that the Tribunal was justified in holding that the Assessing Officer took a possible view. The first question is thus answered in the affirmative and in favour of the assessee. 65. The second question formulated above is now taken up for consideration. 66. Mr. Nizamuddin learned advocate submitted on behalf of the Revenue that power under Section 263 of the Act can be exercised even in a case where the issue is debatable. 67. He in support of his submission relied upon a judgment of the Gujarat High Court in the case of CIT vs. M. M. Khambhatwala reported in 198 ITR 144 wherein the following views were expressed :- "...the Tribunal took the view that the Commissioner could not have invoked the provisions of section 263 of the Act since two views are possible on the question whether the assessee was entitled to weighted deduction under Section....
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....e of the Commissioner so as to enable him to take into consideration the subsequent events also. It goes without saying that if and when the Commissioner of Income-tax takes up for consideration a subsequent event, the assessee would be entitled to make its submission also in regard thereto." 69. Mr. Poddar submitted that the Supreme Court has authoritatively laid down that in order to exercise power under Section 263 of the Act, the order of the assessing officer must be unsustainable. Unless the order is unsustainable, it is not possible to rob the order passed by the assessing officer of its finality. He in support of his submission drew our attention to the judgment of the apex court in the case of Malabar Industrial Co. Ltd. v. CIT reported in 243 ITR 83 wherein the following views were expressed:- "The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law ....
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....& Max India Ltd. If the Assessing Officer has taken a possible view, it cannot be said that the view taken by him is erroneous nor the order of the Assessing Officer in that case can be set aside in revision. It has to be shown unmistakably that the order of the Assessing Officer is unsustainable. Anything short of that would not clothe the CIT with jurisdiction to exercise power under Section 263 of the Act. The judgment in the case of CIT vs. Ralson (supra) is also of no assistance to the revenue because it is not the contention of the assessee that exercise of power u/s. 263 was not permissible after proceedings were started u/s. 154 of the Act. Therefore the second question formulated above is answered in the negative and in favour of the assessee. The third question as to whether the assessment order dated 28th March, 2008 was passed by the Assessing Officer without application of mind is now taken up for consideration. 72. Mr. Nizamuddin submitted that the question has to be answered in the affirmative because the order does not disclose any reasons. He relied upon the following judgments in support of his submissions:- (A) An unreported judgment of the Allahabad ....
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.... 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 other words, the revisional/appellate authority may not be able to appreciate the reasons for the conclusions reached by the assessing officer. Therefore, to make the appellate/revisional jurisdiction effective, the assessing officer is bound to record his own reasoning for the conclusion arrived at." (C) The third judgment cited by Mr. Nizamuddin is in the case of CIT vs. Infosys Technologies Ltd. reported in 341 ITR 293 (Karnataka) wherein the following views were expressed:- "27. The assessing authority performs a quasi-judicial function and the reasons for his conclusions and findings should be forthcoming in the assessment order. Though it is urged on behalf of the assessee by its learned counsel that reasons should be spelt out only in a situation where the assessing authority passes an order against the assessee or adverse to the interest of the assessee and no need for the assessing authority to spell out rea....
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....and prejudice. Reason is a manifestation of the mind of the Court or Tribunal. It is a tool for judging the validity of the order. It gives an opportunity to the higher court to see whether the impugned order is based on reasons and that the reasons are based on adequate legal and relevant material. Giving reasons is an essential element of administration of justice. A right to reasons is, therefore, an indispensable part of a sound system of judicial review. Reasoned decision is not only for the purpose of showing that the citizen is receiving justice, but also a valid discipline for the authority itself. Therefore, stating of reasons is one of the essentials of justice. In this case, the appellate authority being the final authority on the facts was obliged to appreciate the evidence, consider the reasoning of the primary or lower authority and assign its own reasons as to why it disagreed with the reasons and findings of the primary or lower authority. Unless adequate reasons are given, merely because it is an appellate authority it cannot brush aside the reasoning or finding recorded by the lower authority." 75. The sixth judgment relied upon by Mr. Nizamuddin is in the case....
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....therein before me at my office at 18, Rabindra Sarani, Poddar Court, 5th Floor, on 04.02.2008 at 11.30 AM.". The annexure to the notice under Section 142(1) of the Act reads as follows:- " Requisition u/s 142(1) of the IT Act '61. M/s. J. L. Morison (India) Ltd. - AY 06-07. (1) A write-up on receipt of Rs.18 crore from foreign co. (2) A write-up on Sales Tax Department loan from Maharastra Govt. (3) Details of addition to Fixed Assets. (4) Name & Address of S/Cr. (5) Details of Bank A/c with address & A/c No. of Bank. (6) Details of Advances & other deposits. (7) Name & address of S/Cr. (8) Details of other deposits - proof of payment of 43B items. (9) Proof of payment of dividend tax if any. (10) Details of Misc Income. (11) Details of purchases for more than Rs. One lakh. (12) " " of Trading Goods. (13) " of Repair to others. (14) " of Travelling Expense - if foreign Travel details thereof. (15) Name & address of commission of Royalty payees. (16) Details of Damages. (17) " of Misc Expenses." 78. Mr. Poddar a....
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.... the interests of the Revenue. But it would not be open to him to hold that the assessment order was erroneous and prejudicial to the interests of the revenue merely because he is of the opinion that some more enquiries are required to be made and he could not agree with the conclusion arrived at by the A.O. from the enquiries made. It was after verifying the books of account and various materials gathered from the assessee during assessment proceeding and after considering the explanation offered by the assessee that the A.O. had exercised a judicial discretion in the matter while completing the assessment u/s 143(3) of the Act. In such circumstances, the view taken by the A.O. cannot be said to be prejudicial to the Revenue nor can it be said to be erroneous simply because in his order the A.O. did not make any elaborate discussions in that regard." 81. Mr. Poddar contended that neither before the Tribunal nor in the present appeal has any question has been suggested that the assessment order was bad because the same did not disclose any reasons. The contention raised and the judgments cited by Mr. Nizamuddin, as regards exercise of power u/s. 263 of the Act, are misconceived,....
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....n in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be "erroneous" simply because in his order, he did not make an elaborate discussion in that regard." 85. The aforesaid views expressed by the Bombay High Court was quoted in the case of CIT vs. Sunbeam Auto Ltd., reported in 332 ITR 167. 86. He also drew our attention to a judgment of the Punjab & Haryana High Court in the case of Hari Iron Trading Co. Vs. CIT, reported in 263 ITR 437, wherein the following views were expressed:- "The expression "record" has also been defined in clause (b) of the Explanation so as to include all records relating to any proceedings available at the time of examination by the Commissioner. Thus, it is not only the assessment order but the entire record which has to be examined before arriving at a conclusion as to whether the Assessing Officer had examined any issue or not. The assessee has no control over the way an assessment order is drafted. The assessee on its part had produ....
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....he Assessing Officer was required to examine the return filed by the assessee in order to ascertain his income and to levy appropriate tax on that basis. When the Assessing Officer was satisfied that the return, filed by the assessee, was in accordance with law, he was under no obligation to justify as to why was he satisfied. On the top of that the Assessing Officer by his order dated 28th March, 2008 did not adversely affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law to give reasons. 90. The fact, that all requisite papers were summoned and thereafter the matter was heard from time to time coupled with the fact that the view taken by him is not shown by the revenue to be erroneous and was also considered both by the Tribunal as also by us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the fact the order was passed by the assessing officer after due application of mind. 91. The judgments cited by Mr. Nizamuddin do not really support ....
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....ter of a judicial proceeding between the State and the citizen. Therefore, the principles applicable to a proceeding before a judicial or a quasi-judicial authority where there are two contesting parties cannot be made applicable to the proceedings before an Assessing Officer. 98. Mr. Nizamuddin contended the judgments cited by Mr. Poddar indicate that the Assessing Officer is not required to write an elaborate judgment. He contended that the assessing officer may not have any such obligation but it cannot be said, according to him, that the Assessing Officer is under no obligation to record anything in his assessment order. It is not in the first place a fact that he has not recorded anything. From the assessment order, the following facts and circumstances appear:- "Return was filed on 29/11/06 showing total income of Rs.3,80,66,940/-. In response to notices u/s. 143(2) and 142(1) of the I. T. Act, 1961, Sri P. R. Kothari, A/r appeared from time to time and explained the return. Necessary details and particulars were filed. The business of the assessee is manufacturing and trading of cosmetics and dental care products as in earlier years. In view of above total income....
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....ning of the Commissioner (Appeals) reproduced hereinabove we are of the view that the impugned order of the Tribunal cannot be sustained and the Tribunal should consider the matter on merits in accordance with law. This appeal is accordingly allowed and the impugned order of the Tribunal is set aside with a direction to it to reconsider the revenue's appeal No.IT Appeal No.3125 (Ahd.) of 1995 and take a fresh decision thereon in accordance with law expeditiously." 102. Mr. Poddar disputed the submission that the learned Tribunal had set aside the order of the CIT without considering all the four issues. It would appear from paragraph 8 of the judgment of the learned Tribunal that the following views were expressed:- "In view of our above discussions and considering the facts and circumstances of the case and evidences produced by the assessee during assessment as well as 154 proceedings, it cannot be said that the view taken by the A.O. is not one of the possible views. The Ld. C.I.T, may be of the view that some more disallowance/addition would have been justified considering the expenditure as capital in nature and receipts as revenue in nature and/or additional amoun....
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....ance in controversy of previous appeal with the year in dispute, i.e., 1989-90. The judgment and order passed by the Tribunal on the face of record seems to be perverse and not sustainable. The Tribunal had neither discussed the statutory provisions nor the disputed question of fact or finding of fact of subordinate authorities. The learned Tribunal has failed to exercise the jurisdiction vested in it. In view of the above, the appeal stands allowed. The order dated May 14, 2003, is set aside. The matter is remitted back to the Tribunal to decide afresh keeping in view the observations made hereinabove expeditiously." 108. This judgment does not apply to the facts of the case for the reasons given by us in answering the fourth question. 109. The second judgment relied upon by him is in the case of O.S.M. Sait vs. CIT reported in 37 ITR 151 (SC), wherein the following views were expressed:- "We are aware that the Income-tax Appellate Tribunal is a fact finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it this court will not interfere. It is necessary, however, that every fact for and against the assessee m....
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....The Tribunal shall give full opportunity to the parties to place their respective cases when it hears the appeals again." 111. The fourth judgment relied upon by him is in the case of Raichand Kothari (HUF) vs. CIT reported in 223 of ITR 250 wherein the following views were expressed: "We have gone through the judgment of the Tribunal. The Tribunal had written a very lengthy judgment quoting the submissions made from the assessee as well as the revenue. Mr. Bhuyan has drawn our attention to paragraphs 33 and 37 of the judgment in which the Tribunal stated that the Commissioner (Appeals) was wrong in allowing the appeal. But the Tribunal did not consider the materials available in the record. No reason was given as to how the conclusions arrived at by the Commissioner (Appeals) were erroneous. The Tribunal is the last authority so far as the facts are concerned. The Tribunal is required to consider each and every fact and discuss the evidence available on record. It may not always be necessary to discuss each and every piece of evidence in detail while affirming the order. But in case of reversal the Tribunal is duty bound to discuss each piece of evidence placed before ....
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.... We have no doubt in our mind that without application of mind they had disposed of the matter. In the circumstances, both the orders passed by the CIT(A) and the Tribunal are set aside. The matter is remanded to the CIT (A) for a decision afresh. The CIT(A) shall decide the question as regards the legality of exercise of power under Sections 147 and 148 after going into the claims and contentions raised by the assessee including the submission that no tax was deductible at source." 113. Mr. Poddar, learned Senior advocate drew our attention to the judgment in the case of Collector of Customs vs. Biswanath Mukherjee reported in 1974 CLJ 251 wherein this Court opined as follows:- "A. N. Sen J. on the basis of the various decisions of the Supreme Court on the point has laid down the circumstances where the Court will interfere with the Tribunal's findings on the questions of fact on the ground of perversity in an application under Article 226 of the Constitution. Learned Judge has observed: "It is, however, equally well settled that even in a writ petition under Article 226, the Court is entitled to interfere with the finding of the Tribunal on any question of....