Sical Iron Ore Terminal (Mangalore) Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1798/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4288 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 14-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K RAVI IRS
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI B BENCH, CHENNAI , ! ' #! ' $ . %& , '() BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER ./ ITA NO. 1798/MDS/2016 ' , !-, / ASSESSMENT YEAR : 2011-2012 M/S. SICAL IRON ORE TERMINAL (MANGALORE) LTD, SOUTH INDIA HOUSE, 73, ARMENIAN STREET, CHENNAI 600 001 . [ PAN AANCS 5418A ] V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(3) CHENNA I. ( ./ /APPELLANT) ( 01./ /RESPONDENT) ./ 2 3 /APPELLANT BY : SHRI. SAROJ KUMAR PARIDA, ADV. 01./23 /RESPONDENT BY : SHRI. K. RAVI, IRS, JCIT. ' !24 /DATE OF HEARING : 08.06.2017 56- 24 /DATE OF PRONOUNCEMENT : 15.06.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-15, CHENNAI IN ITA NO. 2 ITA NO.1798/MDS/2016. 535/CIT(A)-15/13-14, DATED 21.03.2016 FOR THE ASSES SMENT YEAR 2011- 2012. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- 2.1 COMMISSIONER OUGHT TO HAVE FOUND THAT THE ASSESSEE'S CLAIM MADE DURING IN THE ASSESSMENT PROCEEDINGS WERE NOT ALLOWED. 2.2 COMMISSIONER OUGHT TO HAVE HELD THAT THE INTER EST IS EARNED FROM THAT THE FIXED DEPOSITS WERE HELD ON LY FOR THE PURPOSE OF ACQUISITION OF FIXED ASSETS THOUGH T HE SOURCE IS SHARE APPLICATION MONEY AND UNSECURED LOA NS. 2.3 THE ASSISTANT COMMISSIONER OUGHT TO HAVE APPLI ED THE DECISION OF SUPREME COURT IN THE CASE OF KARNAL CO- OPERATIVE SUGAR MILLS LTD. (243 ITR 2) AND THE DECI SION OF CIT(A) IN THE CASE OF SICAL IRON ORE TERMINAL LTD F OR THE ASST YEAR 2008-09. 2.4 COMMISSIONER OUGHT TO HAVE HELD THAT INTEREST EARNED AS ABOVE IS NOT TAXABLE UNDER INCOME FROM OT HER SOURCES AND HAS TO BE REDUCED FROM THE COST OF THE FIXED ASSETS. 3. LD. COMMISSIONER OF INCOME TAX (APPEALS) O BSERVED THAT GROUNDS RAISED BY THE ASSESSEE AGAINST THE ACTION O F THE LD. ASSESSING OFFICER IN TAXING THE INTEREST INCOME AS INCOME FRO M OTHER SOURCES. LD. COMMISSIONER OF INCOME TAX (APPEALS) ON PERUSAL OF THE ASSESSMENT ORDER FOUND THAT NO ADDITION WAS MADE IN RESPECT OF INTEREST INCOME AND ACCORDINGLY HE DISMISSED THE APPEAL OF THE ASSE SSEE. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. 3 ITA NO.1798/MDS/2016. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. THE ORDER OF LD.CIT(A) IS VERY CRYPTIC ONE. THE LD.CIT(A) HAS NOT CONSIDERED EVERY POINT OF OBJECTION RAISED BY THE A SSESSEE. IN OUR OPINION THE LD.CIT(A) SHOULD HAVE PASSED A WELL REA SONED SPEAKING ORDER AFTER EXAMINED THE ENTIRE FACTS OF THE CASE. IN OUR OPINION, THE LD.CIT(A) BEING THE QUASI JUDICIAL AUTHORITY SHOULD HAVE PASSED A REASONED ORDER AS HELD BY SUPREME COURT IN THE CASE OF KRANTI ASSOCIATES P.LTD VS. MASOOD AHMED KHAN [2010] 9 SCC 496 WHICH STATUTORILY REQUIRES RECORDING OF REASONS AND REQUIREMENT OF PA SSING A REASONED ORDER BY AN AUTHORITY WHETHER ADMINISTRATIVE, QUASI -JUDICIAL OR JUDICIAL, HAD LAID DOWN AS UNDER:- (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 R ESTRAINT ON ANY POSSIBLE ARBITRARY EXERCISE OF JUDICIAL AND QUASI J UDICIAL OR EVEN ADMINISTRATIVE POWER. (E) REASONS REASSURE THAT DISCRETION HAS BEEN EXERC ISED BY THE DECISION MAKER ON RELEVANT GROUNDS AND BY DISREGARD ING EXTRANEOUS CONSIDERATIONS. (F) REASONS HAVE VIRTUALLY BECOMES AS INDISPENSABLE COMPONENT OF A DECISION MAKING PROCESS AS OBSERVING PRINCIPLE S OF NATURAL JUSTICE BY JUDICIAL, QUASI-JUDICIAL AND EVEN BY ADM INISTRATIVE BODIES. 4 ITA NO.1798/MDS/2016. (G) REASONS FACILITATE THE PROCESS OF JUDICIAL REVI EW BY SUPERIOR COURTS. (H) THE ONGOING JUDICIAL TREND IN ALL COUNTRIES COM MITTED TO RULE OF LAW AND CONSTITUTIONAL GOVERNANCE IS IN FAVOUR OF R EASONED DECISIONS BASED ON RELEVANT FACTS. THIS IS VIRTUALL Y THE LIFE BLOOD OF JUDICIAL DECISION MAKING JUSTIFYING THE PRINCIPLE T HAT REASON IS THE SOUL OF JUSTICE. (I) JUDICIAL OR EVEN QUASI-JUDICIAL OPINIONS THESE DAYS CAN BE AS DIFFERENT AS THE JUDGES AND AUTHORITIES WHO DELIVER THEM. THE DECISIONS SHALL SERVE ONE COMMON PURPOSE WHICH IS T O DEMONSTRATE BY REASON THAT THE RELEVANT FACTORS HAV E BEEN OBJECTIVELY CONSIDERED. THIS IS IMPORTANT FOR SUSTA INING THE LITIGANTS FAITH IN THE JUSTICE DELIVERY SYSTEM. (J) INSISTENCE ON REASON IS A REQUIREMENT FOR BOTH JUDICIAL ACCOUNTABILITY AND TRANSPARENCY. (K) IF A JUDGE OR A QUASI-JUDICIAL AUTHORITY IS NOT CANDID ENOUGH ABOUT HIS/HER DECISION MAKING PROCESS THEN IT IS IM POSSIBLE TO KNOW WHETHER THE PERSON DECIDING IS FAITHFUL TO THE DOCTRINE OF PRECEDENT OR TO THE PRINCIPLES OF INCREMENTALISM. (L) REASONS IN SUPPORT OF DECISIONS MUST BE COGENT, CLEAR AND SUCCINCT. A PRETENCE OF REASONS OR RUBBER STAMP REA SONS, IS NOT TO BE EQUATED WITH A VALID DECISION MAKING PROCESS. (M) IT CANNOT BE DOUBTED THAT TRANSPARENCY IS THE S INE QUA NON OF RESTRAINT ON ABUSE OF JUDICIAL POWERS. TRANSPARENCY IN DECISION MAKING NOT ONLY MAKES THE JUDGES AND DECISION MAKER S LESS PRONE TO ERRORS BUT ALSO MAKES THEM SUBJECT TO BROADER SC RUTINY. (N) SINCE THE REQUIREMENT TO RECORD REASONS EMANATE S FROM THE BROAD DOCTRINE OF FAIRNESS IN DECISION MAKING, THE SAID REQUIREMENT IS NOW VIRTUALLY A COMPONENT 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, FO R DEVELOPMENT OF LAW, REQUIREMENT OF GIVING REASONS FOR THE DECISION IS OF THE ESSENCE AND IS VIRTUALLY A PART OF DUE PROCESS . IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLINED TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF LD.CIT(A) FOR PASSING A SPEA KING ORDER ON THE ISSUES IN DISPUTE. 5 ITA NO.1798/MDS/2016. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 15 TH DAY OF JUNE, 2017, AT CHENNAI. SD/- SD/- ( ' #! ' $ . %& ) (DUVVURU R.L. REDDY) ' /JUDICIAL MEMBER ( ) (CHANDRA POOJARI) /ACCOUNTANT MEMBER /CHENNAI, J /DATED, THE 15TH JUNE, 2017 KV K 2 0'4LM NM-4 / COPY TO: 1 . ./ / APPELLANT 3. ' O4 () / CIT(A) 5. M!PQ 0'4' / DR 2. 01./ / RESPONDENT 4. ' O4 / CIT 6. Q&, R / GF