2017 (4) TMI 1062

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....22 of 2013. 2. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 28.12.2012 (Annexure A-III) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No. 506(ASR)/2011 for the assessment year 2005-06. The appeals were admitted by this Court vide order dated 18.9.2014 for determination of substantial question of law No.(i) and (ii) which are to the following effect:- (i) Whether on the facts and in law, the Hon'ble ITAT is justified in allowing deduction u/s 80IC of the Income Tax Act, 1961, @ 100% of its profit without properly appreciating the findings recorded by the Assessing Offic....

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....he Act for the entire profits and restricted the deduction under Section 80IC of the Act to 20% of the total profits. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity "the CIT(A)"]. The CIT(A) vide order dated 29.7.2011 (Annexure A-II) partly allowed the appeal by directing the Assessing Officer to allow the deduction as claimed by the assessee subject to the additions confirmed in the case of the assessee for the assessment year 2005-06 by the CIT(A). Against the order, Annexure A-II, the revenue filed an appeal before the Tribunal who vide order dated 28.12.2012 (Annexure A-III) dismissed the appeal holding that the CIT (A) was right in allowing deduction under Section 80IC of th....

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....iscussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. (d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations. (f) Reaso....

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.... of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for ....