Kiran Raj Mehta, CHENNAI V. ITO, CHENNAI

ITA 775/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7853 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 29-03-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: M ABISHEK
• Keywords: Principle of natural justice; Additional evidence; Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.775/MDS./2016 / ASSESSMENT YEAR :2011-12 SRI KIRAN RAJ MEHTA , 7.NYNIAPPA NAICKEN STREET, PARKTOWN,CHENNAI 600 003. VS. THE ITO, NON CORPORATE WARD 5(1), CHENNAI-6. [PAN AAIPK 7159 G ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.M.ABISHEK,ADVOCATE /RESPONDENT BY : MR.SHIVA SRINIVAS, JCIT, DR / DATE OF HEARING : 15 - 11 - 201 6 / DATE OF PRONOUNCEMENT : 08 - 12 - 2016 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, CHENNAI DATED 18.01.2016 PERTAINING TO ASSESSMENT YEAR 2011-12. ITA NO.222/15 :- 2 -: 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN HIS APPEA L IS THAT THE LD.CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO W HICH WAS PASSED U/S.144 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS MENT ORDER WAS PASSED BY THE AO U/S.144 OF THE ACT AS EX PARTE WHEREIN AO MADE ADDITIONS TO THE TUNE OF ` 24,61,374/-. AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) CONFIRMED THE ADDITIONS OBSERVING THAT ASSESSEE HAS NO REASONABLE CAUSE FOR NOT APPEARING AND ALSO NOT PRODUCING THE BOOKS OF ACCOUNTS BEFORE THE AO. AGGRIEVED WITH THE ORDER OF LD.CIT(A ), NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE MAIN CONTENTION OF LD.A.R IS THAT THE ASSES SEE MAY BE PERMITTED TO PRODUCE ANY ADDITIONAL EVIDENCE UNDER RULE 46A FIRST TIME BEFORE THE LD.CIT(A) AND THE ORDER OF LD.CIT(A ) IS VERY NON- SPEAKING. FURTHER, LD.A.R SUBMITTED THAT LD.CIT(A) HAS ALSO NOT GIVEN ANY FINDINGS ON THE BASIS OF WHICH HE HAS CONFIRMED THE ADDITION MADE BY THE LD. ASSESSING OFFICER. 5. ON THE OTHER HAND, LD.D.R SUPPORTED THE ORDER O F LOWER AUTHORITIES. ITA NO.222/15 :- 3 -: 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE LD.CIT(A) IN A SUMMARY MANN ER ENDORSED THE ORDER OF THE ASSESSING OFFICER WITHOUT ASCERTAINING ANY REASONS. IN OUR OPINION, THE LD.CIT(A) SHOULD HAVE PASSED A WELL R EASONED SPEAKING ORDER AFTER EXAMINED THE ENTIRE FACTS OF THE CASE. IN OUR OPINION, THE LD.CIT(A) BEING THE QUASI JUDICIAL AUTHORITY SHOULD HAVE PASS ED A REASONED ORDER AS HELD BY SUPREME COURT IN THE CASE OF KRANTI ASSOCIA TES P.LTD VS. MASOOD AHMED KHAN [2010] 9 SCC 496 WHICH STATUTORILY REQUI RES RECORDING OF REASONS AND REQUIREMENT OF PASSING 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 T O RECORD REASONS, EVEN IN ADMINISTRATIVE DECISIONS, IF SUCH DECISIONS AFFECT ANYONE PREJUDICIALLY. (B) A QUASI-JUDICIAL AUTHORITY MUST RECORD REASON S 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 O R EVEN ADMINISTRATIVE POWER. (E) REASONS REASSURE THAT DISCRETION HAS BEEN EXER CISED BY THE DECISION MAKER ON RELEVANT GROUNDS AND BY DISREGARDING EXTRA NEOUS CONSIDERATIONS. ITA NO.222/15 :- 4 -: (F) REASONS HAVE VIRTUALLY BECOMES AS INDISPENSABL E COMPONENT OF A DECISION MAKING PROCESS AS OBSERVING PRINCIPLES OF NATURAL JUSTICE BY JUDICIAL, QUASI-JUDICIAL AND EVEN BY ADMINISTRATIVE BODIES. (G) REASONS FACILITATE THE PROCESS OF JUDICIAL REVI EW BY SUPERIOR COURTS. (H) THE ONGOING JUDICIAL TREND IN ALL COUNTRIES CO MMITTED TO RULE OF LAW AND CONSTITUTIONAL GOVERNANCE IS IN FAVOUR OF REASONED DECISIONS BASED ON RELEVANT FACTS. THI S IS VIRTUALLY THE LIFE BLOOD OF JUDICIAL DECISION MAKING JUSTIFYING THE PR INCIPLE THAT 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. ALL T HESE DECISIONS SERVE ONE COMMON PURPOSE WHICH IS TO DEMONSTRATE BY REASON THAT THE RELEVANT FACTORS HAVE BEEN OBJECTIVELY CONSIDER ED. THIS IS IMPORTANT FOR SUSTAINING THE LITIGANTS FAITH IN TH E 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 NO T CANDID ENOUGH ABOUT HIS/HER DECISION MAKING PROCESS THEN IT IS IMPOSSIB LE TO KNOW WHETHER ITA NO.222/15 :- 5 -: 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 REASONS, IS N OT 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.(SE E DAVID SHAPIRO IN DEFENCE OF JUDICIAL CANDOR (1987) 100 HARWARD LAW REVIEW 731-737) (N) SINCE THE REQUIREMENT TO RECORD REASONS EMANAT ES FROM THE BROAD DOCTRINE OF FAIRNESS IN DECISION MAKING, THE SAID R EQUIREMENT IS NOW VIRTUALLY A COMPONENT OF HUMAN RIGHTS AND WAS CONSI DERED PART OF STRASBOURG JURISPRUDENCE. SEE RUIZ TORIJA V. SPAIN [1994] 19 EHRR 553, AT 562 PARA 29 AND ANYA V. UNIVERSITY OF OXFOR D [2001] EWCA CIV 405(CA) WHEREIN THE COURT REFERRED TO ARICLE 6 OF THE EUROPEAN CONVENTION OF HUMAN RIGHTS WHICH REQUIRES, ADEQUAT E 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 ITA NO.222/15 :- 6 -: DEVELOPMENT OF LAW, REQUIREMENT OF GIVING REASONS F OR THE DECISION IS OF THE ESSENCE AND IS VIRTUALLY A PART OF DUE PROC ESS. 7. IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLINE D TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF LD.CIT(A) FOR PASSING A SPEAKING ORDER ON THE ISSUES IN DISPUTE AND LD.CIT(A) SHALL CONSIDER THE ADDITIONAL EVIDEN CE IN ACCORDANCE WITH LAW AND DECIDE IT AFRESH. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 08 TH DECEMBER, 2016, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 08 TH DECEMBER, 2016 K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF