TaxTMI 
TaxTMI 
2023 (3) TMI 1415
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....er that during the year under consideration, the petitioner was engaged in the business of trading in and broking of shares, commodities and securities, including transactions in derivatives. The activity was carried on through the recognised stock exchange. As per the case of the petitioner, all the purchases and sales were reflected in the Profit and Loss Account. 3.1 The case of the petitioner was selected for scrutiny. The Assessing Officer issued notice dated 21.8.2017 under section 142(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') calling upon the petitioner to furnish details including the details of future derivatives. The details were furnished by the petitioner by letter dated 31.8.2017. 3.2 The details of the business activities were furnished by the petitioner included Return of Income, Statement of Total Income and Audited Annual Accounts as well as Tax Audit Reports. It was stated before the income tax authorities that all the transactions and derivatives were included in the Profit & Loss Account and that the resultant loss or profit was related to normal business activities. Eventually, assessment was framed against the petitioner under....
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....re stage, it was submitted that since the notice for reassessment came to be issued beyond period of four years, requirement of Assessing Officer having reason to believe that income had escaped the assessment, as well as failure on the part of the petitioner to truly and fully disclose the material, stood satisfied. It was stated that information was received from the from the project Falcon from DGIT (Investigation) Mumbai on the inside portal which was regarding premeditated trading at the Bombay Stock Exchange by the assessee by engaging in reversal trades in liquid stock options resulting into non-genuine business loss or gains. The affidavit thereafter proceeded to discuss about the merits, and the trading done and the method adopted regarding trading. According to the submission of the Assessing Officer, the information disclosed the escapement of income, therefore powers under section 147 of the Act were sought to be invoked. 5. Without going into any aspect on the merits of reopening, the ground of assailment by the petitioner-assessee that the reasons are cryptic and that they did not furnish details, on the basis of which the petitioner could defend his case, merited ....
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.... that in exercise of powers of judicial review, the concept of reasoned order has been equally enforced by the courts in India. Absence of reasons by the administrative authorities and the Tribunals, would render the order liable to judicial chastisement. The reasons are necessary to enable the appellate or higher courts to exercise their jurisdiction appropriately. 6.2 It was then observed in Assistant Commissioner, Commercial Tax Department, Works Contract and Leasing, Kota (supra), "....It is the reasoning alone, that can enable a higher or an appellate court to appreciate the controversy in issue in its correct perspective and to hold whether the reasoning recorded by the Court whose order is impugned, is sustainable in law and whether it has adopted the correct legal approach. To sub-serve the purpose of justice delivery system, therefore, it is essential that the Courts should record reasons for its conclusions..." (para 12) 6.3 Recording of reasons in order is essential feature of dispensation of justice. In Kranti Associates Private Limited and Another vs. Masood Ahmed Khan and Others [(2010) 9 SCC 496], the supreme court stated that order passed by the quasi....
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....e of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process. m. It cannot be doubted that transparency is the sine qua non 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) 19 EHRR 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 judicial decisions". o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Proces....
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.... reasons in the order passed by any authority administrative, quasi judicial or judicial, when it comes to exercise of powers under sections 147 and 148 of the Income Tax Act, 1961, there has to be a greater thrust for necessity of recording reasons. The entire exercise of reopening hinges on the reasons recorded by the Assessing Officer. It is the 'reasons' which weigh with him. 7.1 When the concluded assessment is to be revisited with by the Assessing Officer, recording of reasons for exercise of such powers has to be viewed as vested rights for the assessee. While exercising powers under the Act to reopen the assessment, the Assessing Officer would harbour reasons to believe that on particular set of facts, the income had escaped assessment and tax was not paid in relation to the year under consideration. 7.2 All the reasons which hold good in the eye of and with the Assessing Officer must be made known to the assessee. Assessee has right to refute the reasons for reassessment by filling objections. Unless the Assessing Officer appropriately delineates and communicates the reasons for reassessment, right of the assessee to file objections would remain an eye-wash. 7.3 W....