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2015 (12) TMI 1329 - ITAT CHENNAI

2015 (12) TMI 1329 - ITAT CHENNAI - TMI - Deduction under Section 80-IB - revision u/s 263 - Held that:- AO is bound to record reasons one way or other for the conclusion reached in the assessment order. The Assessing Officer is expected to discuss the claim of the assessee under Section 80-IB of the Act and record his own reason either for allowing or disallowing the claim of the assessee. Since this exercise has not been done by the Assessing Officer, this Tribunal is of the considered opinion .....

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the assessee in the course of proceeding. In other words, the Assessing Officer shall independently examine the issue afresh in accordance with law and thereafter decide the same after giving reasonable opportunity to the assessee. - ITA No. 877/Mds/2011 - Dated:- 18-12-2015 - Shri N.R.S. Ganesan, Judicial Member And Shri A. Mohan Alankamony, Accountant Member For the Appellant : Shri S. Sridhar, Advocate For the Respondent : Shri Pathlavath Peerya, CIT ORDER Per N. R. S. Ganesan, Judicial Membe .....

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der transportation charges to the extent of ₹ 2,08,43,604/-. Referring to the Sales Tax and Central Excise Duty, the Ld.counsel submitted that the Commissioner directed the Assessing Officer to examine the issue in the light of the judgment of Apex Court in Liberty India Ltd. v. CIT (317 ITR 218). According to the Ld. counsel, the Assessing Officer allowed the claim of the assessee after considering the entire facts of the case. In fact, a questionnaire was issued to the assessee and the a .....

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nsideration, there is no reason to exclude the same while computing taxable income under the Income-tax Act. The Tribunal found that the delivery charges of carbon dioxide should be treated as having direct nexus with industrial undertaking of the assessee, therefore, it is an integral part of turnover and the same is eligible for deduction under Section 80-IB of the Act. In view of this decision of the Tribunal, according to the Ld. counsel, the Administrative Commissioner is not correct in dir .....

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sessee submitted that it is not necessary for the Assessing Officer to discuss each and everything in the assessment order. When the Assessing Officer considered all the materials filed by the assessee and then allowed the claim of the assessee consciously, it is not necessary to discuss the matter in the assessment order. The Ld.counsel placed his reliance on the judgment of Bombay High Court in CIT v. Design & Automation Engineers (Bombay) (P) Ltd. (2010) 323 ITR 632 and also on the judgme .....

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l undertaking. Referring to Section 80-IB of the Act, the Ld. D.R. pointed out that the assessee is eligible for deduction under Section 80-IB of the Act in respect of income derived from industrial undertaking. Therefore, the Commissioner found that in view of the judgments of Apex Court in Cambay Electric Supply Industries Ltd. (113 ITR 84) and CIT v. Sterling Foods (237 ITR 579), the transport charges, rental charges and service charges are not derived from industrial undertaking. According t .....

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D.R., the Commissioner has rightly refused the order of the Assessing Officer in exercise of his jurisdiction under Section 263 of the Act. 5. We have considered the rival submissions on either side and perused the relevant material available on record. We have carefully gone through the order of the Assessing Officer. There is no reference or discussion about the deduction claimed by the assessee under Section 80-IB of the Act. The question arises for consideration is when the Assessing Officer .....

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r the conclusion / decision has to be recorded in the order itself so as to enable the appellate / revisional authority to appreciate the reason for taking a particular decision in the proceeding. In this case, admittedly, the assessment order is the subject matter of appeal before the Commissioner and it is also subject to revision under Section 263 of the Act before the Administrative Commissioner. Therefore, the Assessing Officer is expected to record his reason for the conclusion reached in .....

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ed this issue and after referring to the judgment of the Constitutional Bench of the Apex Court in S.N.Mukherjee v. 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, Australia, Canada, England and the United States of America and after making reference to a large number of judicial precedents, their Lordships culled out the foll .....

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e 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 with the court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce cl .....

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y in an order passed by it while exercising quasi-judicial 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 no less significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it exc .....

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on 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 consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. .....

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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 particular case, solely on the material before them and apart from any extraneous considerations by applying pre-existing legal norms to .....

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f 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 under review. The High Court and the Supreme Court would be powerless to interfere so as to keep the administrative officer within the lim .....

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on of the rules of natural justice. The flowery language used by the Tribunal to justify its acceptance of the respondent's plea that he did not know the law does not warrant our affirmation. In our opinion, the Tribunal was duty bound to record tangible and cogent reasons for upsetting well reasoned orders passed by the Assessing Officer and the Commissioner of Income-tax (Appeals). It should have directed its attention to the language of sections 271D and 271E of the Act in conjunction wit .....

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