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TAXAP/1379/2009 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1379 of 2009
To
TAX
APPEAL No. 1380 of 2009
=========================================================
COMMISSIONER
OF INCOME TAX - Appellant(s)
Versus
DIPAK
KANTILAL TAKWANI - Opponent(s)
=========================================================
Appearance :
MRS
MAUNA M BHATT for
Appellant(s) : 1,
MRS SWATI SOPARKAR for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 18/04/2011
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE AKIL KURESHI)
The
Revenue in this appeal against the common judgment of the Income Tax
Appellate Tribunal (‘the Tribunal’ for short) dated 30/01/2009,
raising following questions for our consideration.
“[A] Whether
on the facts and circumstances of the case and in law, the Appellate
Tribunal erred in confirming the order of the CIT (A), in deleting
the penalty levied u/s. 271D, on the grounds that the same has been
barred by limitation in view of section 275 (1) (a)?
[B] Whether
on the facts and circumstances of the case and in law, the Appellate
Tribunal erred in not observing that various transactions which have
been subject matter of penalty proceedings are also dealt with in the
assessment order. In fact the original of which are not books of
accounts of the assessee, as such, section 275 (1) (c) is applicable
in this case and not section 275 (1) (a)?”
From
the above portion it can be seen that issue pertains to imposition of
penalty against the assessee under Section 271 D of the Income Tax
Act and whether the same in facts of the case was barred by
limitation in view of the provisions contained in Section 275 (1) (c)
of the Act.
Previously
finding that the Tribunal had not given reasons for rejecting of the
appeal of the revenue, in our order dated 28/02/2011 we had issued
Notice for final disposal recording the contention of the Counsel for
the revenue that no reasons are recorded by the Tribunal.
We
have thus heard learned Counsels appearing for the parties for final
disposal of the appeal. From the record we find that the question of
penalty imposed by the Assessing Officer was carried further in
appeal by the assessee. CIT (A) has deleted the penalty by detailed
order primarily holding that the proceedings were barred by
limitation. It was this issue which the Revenue carried in further
appeal before the Tribunal. Tribunal by the common order dismissed
the appeals. After recording the background and a portion of CIT
(A)’s order, the Tribunal’s own conclusions were recorded in
paragraph No.11 of the judgment which reads as under:
“11. We
have considered the submissions of the DR and perused the contents of
the written submissions, we find that the CIT (A) while deleting the
penalty levied by the CIT has quoted various decisions of the High
Courts and Tribunals. Therefore, we need not to go into the merits
of the case and accordingly we are not inclined to interfere with the
order of the CIT (A). We confirm the same.”
From
the above portion we find that the Tribunal gave no reasons
whatsoever for rejecting the appeals. All that the Tribunal stated
was that the CIT (A) has quoted various decisions of the High Courts
and Tribunals. The Tribunal therefore was of the opinion that it need
not go into merits of the case and was not inclined to interfere with
the order of the CIT (A).
In
few cases we have noticed that the Tribunal without giving any
reasons at all has either rejected or allowed the appeals, be of the
assessee or the revenue. We are of the opinion that the Tribunal
discharging important judicial functions, is required to give reasons
howsoever brief for the ultimate conclusion, it has reached while
either accepting or rejecting the appeal. It is by now well settled
that the Tribunal is a final fact finding authority. Income Tax
Tribunal also is a specialized Tribunal dealing permanently in Income
Tax matters.
As
a final fact finding authority, Tribunal’s factual conclusions hold
immense importance in Tax Appeal carried before us. Being a
specialized Tribunal, it’s appreciation on legal questions also holds
considerable importance to us. When a Tribunal’s judgment is bereft
of any discussion either on facts or in law, it besides being an
unreasoned order of a quasi judicial tribunal, also increases our
burden together facts from other record and to verify whether the
ultimate conclusion that the Tribunal arrived at, calls for any
interference or not. In absence of any discussion on facts or on law
by the Tribunal, we are left to imagine what must have weighed with
the Tribunal to arrive at a particular conclusion.
Requirement
of recording reasons by all authorities discharging judicial or quasi
judicial functions has been considered by the Apex Court in time
without numbers. In recent decision in case of Kranti Associates
Private Limited & Anr. Vs. Masood Ahmed Khan and Ors., reported
in (2010) 9 SCC 496, the Apex Court referring to large number of
judgments on the point summarized the position as thus.
“47. Summarizing
the above discussion, this Court holds:
a. In India the judicial trend
has always been to record reasons, even in administrative decisions,
if such decisions affect anyone prejudicially.
b. A quasi-judicial authority
must record reasons in support of its conclusions.
c. Insistence on recording of
reasons is meant to serve the wider principle of justice that justice
must not only be done it must also appear to be done as well.
d. Recording of reasons also
operates as a valid restraint on any possible arbitrary exercise of
judicial and quasi-judicial or even administrative power.
e. Reasons reassure that
discretion has been exercised by the decision maker on relevant
grounds and by disregarding extraneous considerations.
f. Reasons have virtually
become as indispensable a 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 of
incrementalism.
l. Reasons in support of
decisions must be cogent, clear and succinct. A pretence of reasons
or ‘rubber-stamp reasons’ is not to be equated with a
valid decision making process.
m. It cannot be doubted that
transparency is the sine qua non of restraint on abuse of judicial
powers. Transparency in decision making not only makes the judges and
decision makers less prone to errors but also makes them subject to
broader scrutiny.
(See
David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law
Review 731-737).
n. Since the requirement to
record reasons emanates from the broad doctrine of fairness in
decision making, the said requirement is now virtually a component of
human rights and was considered part of Strasbourg Jurisprudence. See
(1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford,
2001 EWCA Civ 405, wherein the Court referred to Article 6 of
European Convention of Human Rights which requires, “adequate
and intelligent reasons must be given for judicial decisions”.
o. In all common law
jurisdictions judgments play a vital role in setting up precedents
for the future. Therefore, for development of law, requirement of
giving reasons for the decision is of the essence and is virtually a
part of “Due Process”.
Under
the circumstances, the impugned order is set aside. Proceedings are
remanded to the Tribunal for fresh consideration and disposal in
accordance with law after giving its reasons. We have not expressed
any opinion on merits of the issue decided by the CIT (A).
(AKIL
KURESHI, J.)
(SONIA
GOKANI, J.)
sompura
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