TMI Blog2015 (12) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Member This appeal of the assessee is directed against the order of the Commissioner of Income Tax, Chennai-III, Chennai, dated 21.03.2011 and pertains to assessment year 2006-07. 2. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee claimed deduction under Section 80-IB of the Income-tax Act, 1961 (in short 'the Act') in respect of rental charges and cylinder service charges. The assessee has also claimed deduction under Section 80-IB of the Act in respect of cylinder 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Honda Siel Power Products Ltd. (2011) 333 ITR 547. 4. On the contrary, Sh. Pathlavath Peerya, the Ld. Departmental Representative, submitted that the Assessing Officer has not considered whether the rental charges, cylinder service charges and cylinder transport charges are derived from industrial 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 to the Ld. D.R., deduction under Section 80-IB of the Act can be allowed only in respect of income derived from industrial undertaking and not from income attributable to business of the assessee. Since the Assessing Officer has not considered in the assessment order and the application of mind does not reflect in the assessment order, the Commissioner found that the order of the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment 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 following propositions (page 1995) : The decisions of this court referred to above indicate that with regard to the requirement to record reasons the approach of this court is more in line with that of the American Courts. An important consideration which has weighed with the court for holding that an administrative authority exercising quasi- judicial 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 with the court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introdu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 particular case, solely on the material before them and apart from any extraneous considerations by applying pre-existing legal norms to factual situations. Now the necessity of giving reasons is an important safeguard to ensure observance of the duty to act judicially. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and excludes or, at any rate, minimises arbitrariness in the decision-making process. Another reason which compels making of such an order 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 cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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