TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 493
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....of the case are that the assessee has filed his return of income on 30.7.2011 declaring total income at Rs. 4,55,010/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the AO that the assessee is a doctor in Jamnabhai Hospital, Vadodara. He has constructed a hospital namely "Shiv Sagar Hospital", and put medical instrument, furniture and fixtures in the hospital. This hospital was given on rent and rental income at Rs. 1,08,000/- was shown as income from other sources. The assessee has claimed depreciation of Rs. 4,31,466/- from this hospital, and thus, net rental income has been computed in negative i.e. Rs.(-)3,23,466/-. This income has been set off against the salary income, and gross total income at Rs. 5,63,251/- was shown by the assessee. 4. Two issues arose in the assessment proceedings viz. whether the income from the hospital income is to be assessed as income from other sources or as house property income. The second issue arose, whether the loss under the head "income from other sources" can be set off against the salary income. The ld.AO af....
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....ion of the Hon'ble Punjab and Haryana High Court in the case of Roadmaster Inds. Of India P.Ltd. Vs. IAC of IT, 303 ITR 138. Hon'ble Court has made reference to large number of decisions rendered by the Hon'ble Supreme Court as well as by other High Courts while laying down on the importance of reasoning required to be given in any order. Such observation reads as under: "4. On a perusal of impugned order, even the counsel for the revenue could not dispute that the order passed by the CIT cannot be termed to be a speaking order which could stand in judicial scrutiny. As to whether in exercise of quasi-judicial powers, the authorities are required to pass orders by giving reasons in support thereof is wellsettled by a series of judgments by the Hon'ble Supreme Court of India. 5. In Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala AIR 1961 SC 1669, while dealing with an order passed by the Central Government in exercise of its appellate powers under section 111(3) of the Companies Act, 1956, in the matter of refusal of a company to register the transfer of shares, Hon'ble the Supreme Court observed : ". . . If the Central Government acts as a Tribunal exercising ....
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....ding to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just." (p. 1304) 9. In Woolcombers of India Ltd. v. Woolcombers Workers' Union AIR 1973 SC 2758, Hon'ble the Supreme Court quashed the award passed by the Industrial Tribunal on the ground that it was not supported by reasons and observed : ". . .The giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious, unfairness or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. Th....
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....ings from the stand point of policy and expediency. 35. Reasons, when recorded by an administrative 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 decisions are of no less significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decisions-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 quasi-judicial 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....