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TMI Blog2013 (8) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... ss account. We heard, Shri K.K. John, the ld.DR also. 3. The Administrative Commissioner in exercise of his revisional jurisdiction found that the assessing officer without examination allowed the claim of the assessee towards penal charges on belated payment of employees' provident fund even though in the tax audit report this amount was shown as disputed penal charges on belated payment of dues . The Commissioner also found that every year the amount was debited in the profit and loss account. However, this was disputed by the ld.representative for the assessee. The fact remains that the assessing officer has not applied his mind to the claim made by the assessee. There is no discussion in the assessment order with regard to the penal damages paid by the assessee on the belated payment of employees' provident fund. The assessing officer without any discussion allowed the claim of the assessee. 4. The assessing officer being a quasi judicial authority is expected to apply his mind to the claim made by the assessee and by a speaking order. An assessment order shall speak for itself. The application of mind shall be reflected in the assessment order. It is well settled principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 no less significance. These considerations show that the recorded of reasons by an administrative authority services a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en, there would be insidious encouragement to arbitrariness and caprice. If this requirement is insisted upon, then, they will be subject to judicial scrutiny and correction." If the order passed by the Tribunal is scrutinized in the light of the aforementioned proposition of law, we do not find any difficulty in setting aside the same on the ground of violation 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 section 271D and 271E of the Act in conjunction with other provisions of the same family and then decided by a reasoned order whether the respondent had been able to make out a case for deleting the penalty. The order passed by the Tribunal should have clearly reflected the application of mind by the learned members." 6. The Apex Court also had an occasion to consider this issue in Toyota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed its shock and anguish on the way in which the orders are being passed by the income-tax authorities. In fact, the Allahabad High Court has observed as follows: "The income tax authorities are required to administer the Act. The right to administer, cannot obviously include the right to mal-administer. Thus, we find no words to express anguish as what kind of governance it had been. There is another reason for ignoring the aforesaid order, dropping the cancellation proceeding of registration. The said order does not contain any reason. Reasons introduce clarity in an order. Reason is the heart beat of every conclusion and without the same it becomes lifeless. (See Raj Kishore Jha Versus State of Bihar and others, AIR 2003 SC 4664). Even in respect of administrative orders Lord Denning M.R. in Breen Vs. Amalgamated Engineering Union, (1971) All. E.R. 1148) observed: "The giving of reasons is one of the fundamentals of good administration." Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision - taker to the controversy in question and the decision or conclusion arrived at. Reasons substitute subjectivity by object ..... X X X X Extracts X X X X X X X X Extracts X X X X
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