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2022 (8) TMI 1139 - HC - Income TaxRevision u/s 263 - as per CIT AO has not examined the applicability of Section 56(2)(viib) read with Rule 11(U) and Rule 11UA - Commissioner held that with respect to fair market value of unquoted equity shares, the valuation provided under Rule 11UA (c)(b) has to be adopted and the valuation to be accordingly worked out and also opined that the assessing officer has not verified the computation of fair market value of the shares since relevant and tangible material was not placed before the assessing officer by the assessee during the course of assessment proceedings under Section 143(3) - HELD THAT:- What weighed in the mind of the AO appears to be as to whether the case of the assessee was a case of artificially rising of the capital by circular transactional. There was no such allegation when the Assessing Officer issued the questionnaire. If such is the case, we find that the note is of no consequence with regard to the fact in issue and therefore, the note requires to be ignored. The note also cannot be construed to be a rectification of the assessment order as the Assessing Officer does not state that he has invoked his power under Section 154 of the Act. Therefore, we are of the view that the learned Tribunal committed a serious error in reversing the order passed by the Principle Commissioner of Income Tax, II Kolkata in exercise of his powers under Section 263 of the Act. It was submitted on behalf of the respondent assessee that the Income Tax Department cannot sit in the arm chair of a businessman and commercial expediency has to be seen from the view point of the businessman. Such issue does not arise for consideration in this appeal nor it was the case of the assessee before the Commissioner that the Commissioner is purporting to take business decisions on behalf of the assessee. It is no longer res integra that reasons provide a live link between conclusion and evidence. This vital link is the safeguard against arbitrariness and prejudice to the interests, is a manifestation of the mind of a quasi-judicial authorities, Tribunal or a Court and it is a tool for judging validity of an order and, therefore giving reasons is an essential element of administration of justice. Thus, in the absence of any reasons given by the Assessing Officer by recording satisfaction as mandated under Section 56 (2)(viib) of the Act, the order passed by the Tribunal calls for interference. Accordingly, the appeal filed by the revenue is allowed and the order passed by the Tribunal is set aside and the order passed by the Principal Commissioner of Income Tax-II Kolkata is restored and the Assessing Officer is directed to comply with the directions contained in paragraph 6 of the said order by passing a reasoned and speaking order after offering an opportunity of hearing to the assessee or their authorized representative either through virtual hearing or physical hearing as expeditiously as possible but not later than sixty days from the date of receipt of the server copy of this judgment
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