TaxTMI 
TaxTMI 
2014 (11) TMI 372
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....eciation the assessing officer has not applied his mind or conducted proper enquiry. Referring to the paper book, the ld.representative submitted that the assessing officer called for all the details with regard to windmill and the assessee has furnished the same. The assessing officer, after examining all the materials filed before him found that the assessee is entitled for higher rate of depreciation not only on the windmill but also on the transformer and other items used in DP yard. Once the assessing officer called for all the details and examined the same, according to the ld.representative, merely because there was no discussion in the assessment order that cannot be a reason to exercise the jurisdiction u/s 263 of the Income-tax Act by the Administrative Commissioner. The windmill and transformer are composite one, therefore, the Commissioner is not justified in segregating the two. The ld. representative placed his reliance on the decision of the Chennai Bench of this Tribunal in Rama Vilas Weaving Factory v. CIT IT Appeal No.1153(Mds.) of 2009, dated 10-10- 2010 and also the decision of the Ahmedabad Bench of this Tribunal in ACIT (OSD) v. Parry Engineering & Electronics....
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....il Kumar Goel (2005) 274 ITR 53 (P&H) and after considering the judgment of the Apex Court in S.N. Mukherjee v. Union of India AIR 1990 SC 1984 has observed as follows: 'In S.N. Mukherjee v. Union of India, AIR 1990 SC 1984, a Constitution Bench of the Supreme Court discussed the development of law on this subject in India, Australia, Canada, England and the United States of America and after making reference to a large number of judicial precedents, their Lordships culled out the following propositions (page 1995): "The decisions of this court referred to above indicate that with regard to the requirement to record reasons the 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 effecti....
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....ellate or revisional authority agrees with the reasons contained in the order under challenge." In Testeels Ltd. v. N.M. Desai [1970] 37 FJR 7; AIR 1970 Guj 1, a Full Bench of the Gujarat High Court has made an extremely lucid enunciation of law on the subject and we can do no better than to extract some of the observations made in the decision. The same are (headnote of AIR 1970 (Guj)): "The necessity of giving reasons flows as a necessary corollary from the rule of law which constitutes one of the basic principles of the Indian Constitutional set-up. The administrative authorities having a duty to act judicially cannot 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. Anothe....
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....th section 274 of the Income-tax Act, 1961 are hereby dropped. Accordingly to the High Court, there was no basis indicated for dropping the proceedings. The Tribunal referred to certain aspects and held that the initiation of proceedings under section 263 of the Income-tax Act, 1961 (in short, "the I.T. Act") was impermissible when considered in the background of the materials purportedly placed by the assessee before the Assessing Officer. What the High Court has done is to require the Assessing Officer to pass a reasoned order. The High Court was of the view that the Tribunal could not have substituted its 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 Cour....
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....o indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in other words, a speaking-out. The "inscrutable face of the sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance." A feeble argument was advanced that the Commissioner of Income Tax being higher in hierarchy than Additional Commissioner of Income Tax, the initiation of the proceedings at the instance of Additional Commissioner of 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 jurisd....