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TMI Blog2023 (9) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... eciating the plethora of facts and evidences (such as Satellite images, 7/12 revenue records, Statement on oath of Talhati, Field verification report of Income tax inspector etc), brought on record by the AO all of which clearly established that no agricultural activity had been carried out on the land in question and consequently assessee's claim of deduction u/s 54B was not allowable since the basic requirements for allowing the deduction were not satisfied. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not giving due importance to assessee's statement recorded on oath and assessee's own admission during the course of assessment proceedings regarding the falsity of his claim and offering the LTCG for taxation. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to treat assessee's income (of Rs. 69,344/-) as agricultural income despite there being no supporting evidence for the same and despite it being proved by the AO that no agricultural activity has been carried out by the assessee in the said period. 5. For these and such other reasons as may be urged at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried out on behalf of the respondent-assessee. The respondent-assessee also submitted copies of 7/12 extract dated 22.06.2011. However, the Assessing Officer had called for the photocopies of 7/12 extract from the office of Talathi, which according to the Assessing Officer, had shown the land was under 'gawatpad' (weedy fallow land) or the 'pad' (fallow land), whereas, the 7/12 extracts submitted by the respondent-assessee had mentioned that the lands were 'gawatpad' (weedy fallow), ghewada (green beans), watana (peas), bhuimug (groundnut). The Assessing Officer also issued summons to the Talathi, Shri Maruti Sadu Gosawale, who was Talathi on 22.06.2011 and recorded statement on 11.03.2016, wherein, he had stated that the 7/12 extracts submitted by the respondent-assessee were not issued by him. His statement recorded was extracted at page no.7 of the assessment order. Even the Talathi holding office as on 14.03.2016 was also examined, wherein, he had stated that 7/12 extracts submitted by the respondent-assessee were not issued by him. During the course of assessment proceedings, the respondent-assessee vide letter dated 11.03.2016 addressed to the Assessing Officer had agreed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and which was sold by the respondent-assessee was not used for agricultural purposes in 2 years immediately preceding the year of the sale of land based on the following evidence :- (i) the land sold was not an agricultural land for the purpose of the deduction u/s. 54B of the Act as no agricultural activities had been carried out in the said land in past years prior to the date of sale. (ii) no agricultural income had been offered / shown by the appellant in the past years' returns of income filed and the same had only been declared of Rs. 69,344/- in this relevant AY 2013-14. (iii) the revenue records including 7/12 extracts did not mention the agricultural activities and crops grown. (iv) the 7/12 extracts which had been furnished by the appellant during assessment proceedings before the AO were fabricated and forged as the AO had issued summons u/s. 131 to the then Talathi whose signature was found in 7/12 extracts and he denied in his statement that he had put any signature on such 7/12 extracts and therefore mentioning in the 7/12 extracts of crops grown such as Jowar, Bajara etc. were also false. The enquiry conducted by the AO from the Talathi who was holding office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the 7/12 extracts etc, in-fact, no reasons whatsoever were given by the NFAC in support of the conclusion reached by it. The order passed by NFAC is bereft of any factual discussion of case nor met the reason given by Assessing Officer while denying claim for deduction u/s 54B of the Act. 10. The Hon'ble Supreme Court in the case of Siemens Engg. vs. UOI, AIR 1976 SC 1785 held that the rule requiring reasons to be given in support of an order is like the principle of audi alteram partem, a basic principle of natural justice, which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. Further, the Hon'ble Supreme court in the case of CIT vs. Walchand and Co. P. Ltd. (1967) 65 ITR 381 (SC) held that the practice of recording a decision without reasons in support cannot, but be deprecated. In S. N. Mukherjee vs. Union of India [(1990) 4 SCC 594], the Supreme Court held that irrespective of the fact whether the decision is subject to appeal, revision or judicial review, the recording of reasons by an administrative authority by itself serves a statutory purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as indispensable component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior Courts. (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son is no order in the eyes of law. Therefore, the order passed by the NFAC does not meet the requirements of being a reasoned order as enunciated by the Hon'ble Supreme Court in the decisions referred to above supra and cannot be sustained in the eyes of law. The NFAC had not met the reasoning of the Assessing Officer and there is no material brought before the NFAC or before us controverting the findings of the Assessing Officer that the respondent-assessee had filed fabricated/forged documents of 7/12 extracts. Further, there is material on record in the form of the statement on oath of Talhati that no agricultural operation was carried on. The finding of the Assessing Officer that the land was purchased by the respondent-assessee not with the intention of carrying out any agricultural activities, but with the intention of development of properties remains uncontroverted. There is no cogent material brought on record in support of retracting the statement of the respondent-assessee withdrawing the claim for deduction u/s 54B of the Act during the course of assessment proceedings. The fact that the agricultural lands were situated within the 8 kilometres from the Municipal Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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