Assistant Commissioner of Income Tax vs Gautam Investments (P.) Ltd.

M.F. Saldanha, J.—We have heard the appellant''s learned counsel who has assailed the impugned order passed by the Tribunal. His principal submission proceeds on the footing that the cryptic finding recorded by the Tribunal is unjustified in law. In defence of the Tribunal''s order learned senior counsel Mr. Sarangan submitted that in a given situation where the principles of law are well defined and where the Tribunal is of the opinion that the appellate order does not require interference, whether the Tribunal would be justified in disposing of the appeal through a short summary order.

We do not propose to comment about the latter submission made by learned counsel which may be valid in certain cases, but we need to observe here that the Tribunal is the final fact-finding authority and that if the Tribunal goes wrong, as we have found in case after case wherein the amount of the Revenue involved is also substantial, the Department is virtually left with almost no remedy ; a reference to the High Court will presuppose that a pure point of law or a point of law of substantial importance is involved, but if on appreciation of the evidence much is to be decided, a virtual dead lock could arise. This is one such case. We have seen the three orders, starting with the original assessment order, which is nothing but a summary order. The appellate order is hardly better than the original order and the third order is as cavalier as the earlier two. As a matter of principle we propose to remand this case to the Tribunal after sounding a note of caution, insofar as it is not the question of the length of the order but the intrinsic quality that matters. In all judicial proceedings it is a well-settled principle of law that the quality of the order that is passed must implicitly demonstrate that there has been total application of mind by the authority who has passed the order. This does not have to be stated but it has got to be apparent from the order. Equally necessary is the fact that in a case of the present type particularly where a sufficiently high authority such as the Income Tax appellate authority is concerned a high sense of responsibility must pervade the order at all times. The grievance may be projected by the assessee or on the other hand, it may be the Department that has approached the Tribunal. The point that we emphasise is that there has got to be proper consideration of the facts and an appreciation in the manner prescribed by law which is not to be assumed to be cursory or careless and more importantly, the application of all the well defined principles that govern the case in question.

On a reading of the present order we are unable to say that any of the aforesaid principles have been followed. It is true, as pointed out to us by learned counsel on both sides, that the short point that is involved in this case, namely, the question as to whether in the case of an isolated instance of a transaction which may be different from the normal line of business of the assessee the question arises whether the proceeds are to be treated as capital or business income, that there are several decisions of the courts in a large number of instances wherein the courts have taken differing views. A simple analysis would however indicate that from these decisions certain well-defined principles have crystallised. It is not at all difficult to cull out these principles and apply them to the facts of this case. This is all we expect from the Tribunal to whom we propose to remand the case as this court has had the unhappy experience of coming across orders of the present type in numerous cases which have ultimately resulted in injustice to one side or the other.

It is in this background, that the impugned order is set aside and we need to observe that if the lower or previous authority has not applied its mind, it is open to the higher authority to remand the case for a full and proper consideration or in an appropriate instance if a remand is unnecessary the higher authority must substitute the unsatisfactory order with a totally valid and legally tenable order. Here, we find that the malady started at the stage of the assessment, that it became glaring at the appellate stage and virtually reached the level of malignancy when it came to the level of the Tribunal. In the end result, cases which should have been disposed of at any of the three stages earlier are unnecessarily required to be brought to the High Court which is also avoidable. The impugned order is accordingly set aside, the Tribunal is directed to issue fresh notice, to hear the assessee and reconsider the case on the facts and law and re-decide the same. We have refrained from making any comments on the merits of the case because it is the function of the Tribunal and we do not propose to prejudice either of the parties.

With these observations, this appeal succeeds. No order as to costs.