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M/s TVH Energy Resources Pvt. Ltd Versus The Asstt. Commissioner of Income-tax, Chennai

Revision u/s 263 by CIT(A) - CIT found that there was increase in the share capital to the extent of ₹ 34,36,04,000/- not verified by AO - The share application money to the extent of ₹ 18 crores was pending for allotment and this was also not verified by the Assessing Officer - Reserve and surplus, unsecured loan, mobilization advance, sundry creditors, excess payment were also not verified by the Assessing Officer - Held that:- It is incumbent on the part of the Assessing Officer t .....

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dent : Shri P.B. Sekaran, CIT ORDER PER N.R.S.GANESAN, JUDICIAL MEMBER This appeal of the assessee is directed against the order of the Administrative Commissioner, Central-I, Chennai, dated 28.7.2014 and pertains to assessment year 2011-12. 2. Shri R. Sankaranarayanan, ld. Representative for the assessee submitted that the Assessing Officer called for all the details and allowed the claim of the assessee. However, the CIT in exercise of his revisional jurisdiction u/s 263 of the Act found that .....

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were also not verified by the Assessing Officer. According to the ld. Counsel, all the details referred to by the CIT were examined by the Assessing Officer and he allowed the claim of the assessee. Therefore, the CIT is not justified in exercising his revisional jurisdiction u/s 263 of the Act. 3. On the contrary, Shri P.B. Sekaran, ld. Departmental Representative submitted that the Assessing Officer has not discussed anything in the assessment order. Therefore, the assessment order does not co .....

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is of the considered opinion that the Assessing Officer being a quasi-judicial authority, the application of mind shall be reflected in the impugned assessment order itself. In this case, even though the Assessing Officer called for the details, there is no discussion in the assessment order regarding the above issues and application of mind does not reflect from the assessment order. 5. The application of mind and the reasons for reaching a conclusion shall contain in the assessment order itsel .....

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of the Assessing Officer. 6. We find that the Hon ble P&H High Court had an occasion to examine this issue in CIT vs Sunil Kumar Goel [2005] 274 ITR 53. The P&H High Court, after considering the judgment of the Constitutional Bench of the Apex Court in S.N.Mukherjee vs Union of India, AIR 1990 SC 1984, has observed as follows: In S.N.Mukherjee v. Union of India, AIR 1990 SC 1984, a Constitution Bench of the Supreme Court discussed the development of law on this subject in India, Austral .....

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dicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this court under article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under article 227 of the Constitution and that the reasons, if recorded, would enable this court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed .....

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eas an executive officer generally looks at things from the stand point of policy and expediency. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasijudicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this court in holding that an administrative authority must record reasons for its decision, are of n .....

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cisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due .....

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law on the subject and we can do no better than to extract some of the observations made in that decision. The same are (headnote of AIR 1970 (Guj): The necessity of giving reasons flows as a necessary corollary from the rule of law which constitutes one of the basic principles of the Indian Constitutional set-up. The administrative authorities having a duty to act judicially cannot therefore decide on considerations of policy or expediency. They must decide the matter solely on the facts of the .....

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is based on the power of judicial review which is possessed by the High Court under article 226 and the Supreme Court under article 32 of the Constitution. These courts have the power under the said provisions to quash by certiorari a quasi-judicial order made by an administrative officer and this power of review can be effectively exercised only if the order is a speaking order. In the absence of any reasons in support of the order, the said courts cannot examine the correctness of the order u .....

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