D.PERIASAMY,SIVAKASI vs. ITO, VIRUDHUNAGAR

This appeal of the assessee is directed against the order of the Principal Commissioner of Income Tax, Madurai, dated 28.03.2017 and pertains to assessment year 2010-11.

Shri S. Chandrasekaran, the Ld. representative for the assessee, submitted that the assessee has purchased a land from Co-operative Industrial Estate, Sivakasi in favour of partnership firm M/s Graphic Technic Prints. The Ld. representative further submitted that the assessee is one of the partners in M/s Graphic Technic Prints. The property was again sold to Shri P. Dharmar, father of the assessee on 24.07.2009 for a sale consideration of `9,00,000/-. However, the guideline value stood at `14,00,000/-.

The Ld. representative for the assessee further submitted that the Assessing Officer made thorough investigation and then allowed the claim of the assessee. According to the Ld. counsel, merely because the Assessing Officer has not recorded his observation in the impugned order in so many words, it does not mean that the Assessing Officer has not considered the same in the assessment order. According to the Ld. representative, drafting of assessment order is discretion of the Assessing Officer and the assessee has no role to play in drafting the assessment order. Merely because the Assessing Officer committed mistake in making reference about the enquiry in the assessment order, according to the Ld. representative, the assessee cannot be made to suffer, therefore, the Principal Commissioner is not justified in interfering with the order of the Assessing Officer.

We heard Ms. S. Vijayaprabha, the Ld. Departmental Representative also. We have carefully gone through the impugned order of assessment. The Assessing Officer accepted the returned income without any discussion in the assessment order. The assessment proceeding before the Assessing Officer is a judicial proceeding. Therefore, the Assessing Officer is expected to apply his mind to the material available on record. The application of mind to the material available on record shall be reflected in the assessment order itself. The reason for conclusion arrived in the assessment proceeding shall be reflected in the assessment order itself. Reasons for conclusion reached in the assessment proceeding cannot be substituted by way of affidavit or other material in the appellate / revisional proceeding. This Tribunal is of the considered opinion that the proceeding before the Assessing Officer being a judicial proceeding, the Assessing Officer is bound to pass a speaking order bringing all the facts on record. The reason for conclusion reached in the assessment order is the live link to the material available on record and mind of the decision maker. A speaking order would avoid arbitrariness.

No doubt, the assessee has no role to play in drafting of assessment order. It is in the exclusive domain of the Assessing Officer to draft the assessment order on the basis of the material available on record and enquiry conducted by him. However, we cannot forget the fact that the assessment order is subjected to scrutiny in the appellate proceeding and revisional proceeding. The order of the Assessing Officer is also subjected to further appeal before the Tribunal, High Court and Supreme Court. Therefore, unless the Assessing Officer records his reason for conclusion reached in the assessment, the appellate / revisional authorities may not be able to appreciate the order of the Assessing Officer in proper manner. Therefore, judicial discipline requires the Assessing Officer to record the reason for the conclusion reached in the assessment order. Even though the assessee has no role to play in drafting of the assessment order, this Tribunal is of the considered opinion that it is for the Assessing Officer who, being a quasi-judicial authority, has to apply his mind to the material available on record and enquiry conducted and record his reasons for conclusion reached in the assessment order. Since such an exercise was not done, this Tribunal is of the considered opinion that the Principal Commissioner has rightly exercised his jurisdiction under Section 263 of the Act. The Assessing Officer shall independently examine the claim of the assessee and thereafter decide the same in accordance with law without being influenced by any of the observation made by the Principal Commissioner in the impugned order, after giving a reasonable opportunity to the assessee.