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2009 DIGILAW 718 (MP)

K. D. Wires P. Ltd. v. Union of India

2009-06-22

A.M.SAPRE, PRAKASH SHRIVASTAVA

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JUDGMENT A.M. Sapre, J. 1. This is an appeal filed by the assessee under Section 260A of the Income-tax Act, 1961 against an order dated April 11, 2001, passed by the Income-tax Appellate Tribunal, Indore Bench in I.T.A. No. 78/Ind/2000. This appeal was admitted for final hearing on the following substantial question of law: Whether the Income-tax Appellate Tribunal was justified in confirming the findings recorded by Commissioner of Income-tax (Appeals) without resorting to recording its own findings on each and every issue raised, projected and argued before the said Tribunal. 2. Shri S.C. Bagadia, learned senior Counsel with Shri D.K. Chhabra, learned Counsel for the appellant (assessee) and Shri R.L. Jain, learned senior Counsel with Ku. Veena Mandlik, learned Counsel for the respondent (Revenue). 3. In our opinion, the appeal also involves one additional substantial question of law and, hence, with the consent of learned Counsel for the parties and by taking recourse to the provisions of Section 260A(4) of the Act, we frame the following one additional substantial question of law; Whether a case is made out for remand of case to the Tribunal for deciding the appeal afresh on the merits? 4. The issue in question arises out of the assessment year 1996-97. We feel appropriate at the outset, to quote in verbatim the manner in which the issue involved in this appeal was decided by the Tribunal: 7. On a consideration of the rival submissions and from a careful perusal of the record, we find that the assessee has filed all the papers before us which were filed before the Commissioner of Income-tax (Appeals) and he has thoroughly examined all the evidence placed before him in the light of the assessee's contentions. We have also carefully perused the order of the Commissioner of Income-tax (Appeals) in this regard and find that he has exhaustively dealt with the assessee's each and every contention in his order before arriving at the final conclusion. During the course of arguments though the assessee has reiterated his arguments, but he could not point out any specific defect in the order of the Commissioner of Income-tax (Appeals). Since the Commissioner of Income-tax (Appeals) has examined all the aspects while deciding the impugned issues and we also find ourselves in agreement to his order, the order of the Commissioner of Income-tax (Appeals) is hereby confirmed. 5. Since the Commissioner of Income-tax (Appeals) has examined all the aspects while deciding the impugned issues and we also find ourselves in agreement to his order, the order of the Commissioner of Income-tax (Appeals) is hereby confirmed. 5. Mere perusal of the aforesaid paragraph of the impugned order under appeal would indicate the manner in which the Tribunal dealt with the issue and eventually decided the same against the appellant (assessee). Indeed, neither there is a reference to narration of facts, nor discussion nor finding much less categorical finding and nor any reasoning, except conclusion. It may be good for the parties to appeal because they are more concerned with the eventual conclusion rather than the fact as to how such conclusion was reached by the Tribunal. At least the winning side is not concerned with even the reasoning that led to the decision going in their favour. It is the losing party who is more concerned with reasoning which led to the decision going against them. 6. We feel most appropriate to quote the subtle observations of the Supreme Court made from time to time consistently reminding the courts in the country the need to assign the reasons by any quasi-judicial, judicial as also by administrative authorities in support of their conclusions. These observations came to be made in a decision reported in the case of D.P.S. Rural Regional Bank v. Munna Lal Jain AIR 2005 SC 584 : AIR 2005 SCW 95 . The learned judge A. Pasayat, speaking for the Bench, held AIR 2005 SC 591 : It needs no emphasis that when a court feels that the punishment is shockingly disproportionate, it must record reasons for coming to such a conclusion. Mere expression that the punishment is shockingly disproportionate would not meet the requirement of law. Even in respect of administrative orders Lord Denning M.R. in Breen v. Amalgamated Engineering Union [1971] 1 All ER 1148; observed 'The giving of reasons is one of the fundamentals of good administration'. In Alexander Machinery (Dudley) Ltd. v. Crabtree [1974] LCR 120 it was observed; 'failure to give reasons amounts to denial of justice'. Reasons are live links between the mind of the decision taken to the controversy in question and the decision or conclusion arrived at'. Reasons substitute subjectivity by objectivity. In Alexander Machinery (Dudley) Ltd. v. Crabtree [1974] LCR 120 it was observed; 'failure to give reasons amounts to denial of justice'. Reasons are live links between the mind of the decision taken to the controversy in question and the decision or conclusion arrived at'. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the 'inscrutable face of the sphinx', it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system. Another rationale is that the affected party can know why the decision has gone again him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The 'inscrutable face of a sphinx' is ordinarily incongruous with a judicial or quasi-judicial performance. 7. In the present case, we find that the Tribunal in paragraph 4 quoted in extenso the order of the Commissioner of Income-tax (Appeals), whereas in paragraphs 5 and 6 the Tribunal noted the presence of learned Counsel for the parties without mentioning as to what were their submissions in support of their case. In paragraph 7 quoted supra, the Tribunal held that since the Commissioner of Income-tax (Appeals) has thoroughly examined the issue and being in agreement with what is decided, the Tribunal does not wish to do anything except to dismiss the appeal. In the result, the appeal was dismissed. 8. This court cannot countenance such approach of the Tribunal while deciding the appeal. In our view, it does not amount to "deciding the appeal" but at best it may amounts to "its disposal". It is not permissible. As a last court of appeal on facts, the Tribunal should have dealt with issues "both on facts and law with reference to submissions urged and then returned their own reasoning, which may be of concurrence or that of reversal. Quoting the finding of the Commissioner of Income-tax (Appeals) and simply upholding the same without giving its own reasoning, is not proper. 9. Accordingly and in view of the aforesaid discussion, the appeal succeeds and is allowed. Quoting the finding of the Commissioner of Income-tax (Appeals) and simply upholding the same without giving its own reasoning, is not proper. 9. Accordingly and in view of the aforesaid discussion, the appeal succeeds and is allowed. The impugned order dated April 11, 2001, passed by the Income-tax Appellate Tribunal in I.T.A. No. 78/Ind/2000 for the assessment year 1996-97 is set aside. The Tribunal is directed to decide the appeal afresh on the merits. Needless to observe, the Tribunal will decide the appeal after narrating the full relevant facts necessary for the disposal of appeal, legal issues governing the questions and then assign their reasoning with reference to any case law on the subject having its application to the questions raised. Let this be done within 6 months. Parties to appear before the Tribunal on July 29, 2009, to enable the Tribunal to decide the appeal as directed. Record of the case be sent back (if requisitioned). 10. No costs. 11. C.C. within a week.