GEMINI INDUSTRIES AND IMAGING LIMITED,CHENNAI vs. DCIT, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax-IV, Chennai, dated 26.03.2014, Act').

Shri Anil Nair, Ld. representative of the assessee, submitted that though the assessee has raised as many as three grounds, viz. interest payment to Mrs. Indra Anand, applicability of Section 50C of the Act and the expenditure claimed under Section 35D of the Act, the only grievance now remains to be adjudicated is the expenditure claimed by the assessee under Section 35D of the Act. Referring to provisions of Section 35D of the Act, the Ld. representative submitted that the assessee has meritorious case for claiming deduction under Section 35D of the Act. On a query from the Bench whether the Assessing Officer considered the claim of the assessee under Section 35D of the Act, the Ld. representative clarified that the assessment order is silent on this aspect.

We heard Shri Pathlavath Peerya, Ld. Departmental Representative also.

We have considered the rival submissions on either side and perused the relevant material on record. Admittedly, the assessment order is silent with regard to claim made by the assessee under Section 35D of the Act. The assessment proceeding before the Assessing Officer is a judicial proceeding under Section 136 of the Act. Therefore, the assessment order shall reflect the application of mind by the Assessing Officer. The Assessing Officer one way or other discusses the matter for allowing or disallowing the claim of the assessee. Unless the reasons for allowing or disallowing the claim of the assessee are recorded in the assessment order itself, the appellate/revisional authority may not be able to appreciate the reasons for allowing or disallowing the claim of the assessee by the Assessing Officer.

Moreover, whether it is a judicial order or an administrative order, the reason for conclusion shall contain in the order itself. It is a well settled principle of law that reason for the conclusion arrived filing additional document or affidavit in appellate or revisional proceeding. In other words, the reason shall be contained in the order itself.

The reason recorded in the assessment order would be the live link between the order and the officer who is passing the order. Requirement of recording reason in the order would remove the arbitrariness in decision making process. In this case, admittedly, no such reasons were recorded. Therefore, this Tribunal is of considered opinion that the assessment order is not only erroneous but also prejudicial to the interests of Revenue. This view of the Tribunal is fortified by the judgment of the Constitutional Bench of the Apex Court in Mukherjee v. Union of India 1990 AIR SC 1984 and in Toyota Motor Corporation v. CIT (2008) 306 ITR 52 (SC). The Commissioner has simply set aside the order of the Assessing Officer and directed to pass an order de novo after conducting proper enquiry. Therefore, this Tribunal is of considered opinion that the assessee may not have any grievance at all. It is for the assessee to place all the material before the concerned Assessing Officer. The Assessing Officer shall consider all the materials that may be filed by the assessee and thereafter decide the issue in

With the above observation, the order of the Commissioner is confirmed. The appeal of the assessee stands dismissed.