The Indian Hotels Company Ltd. & Others vs The Income Tax Officer, Mumbai & Others on 8 August, 2000
AR ,are not disputed. The various decisions were rendered on peculiar facts and
circumstances of their own. However, in the instant case before us, neither the
8 ITA no.980/Del./2012
ld. AR nor the ld. DR explained before us as to which specific products are
manufactured by the assessee or what are the ingredients used therein or what
is the manufacturing process involved. There is nothing in the impugned order or
order of the ld. CIT(A) in the preceding year as to the products manufactured or
produced or even the manufacturing process. As regards decision relied upon
by the AO in the case of Indian Hotel Company Ltd. Vs. Income-tax Officer
(2000) 112 Taxman 48 (SC) holding that catering food is not a manufacturing
activity, we find that the ld. CIT(A) in the preceding assessment year while
referring to a circular no. 281 dated 22.9.1980 issued in the context of extant
provisions of clause (iia) in sec. 32(1) by the Finance(No.2) Act, 1980,allowed the
claim of the assessee ,without recording any findings as to whether or not the
said decision is applicable. Since the provisions of section 32(1)(iia) inserted by
Finance(No.2) Act, 1980 were quite different from the provisions applicable in
the year under consideration, we are of the opinion that the ld. CIT(A) without
recording his specific findings as to how the conditions stipulated in the
aforesaid provisions of sec. 32(1)(iia)of the Act are fulfilled and without even
analyzing the manufacturing process involved in various products prepared by
the assessee, was not justified in accepting the claim of the assessee for
additional depreciation, merely on the basis of aforesaid circular dated
22.9.1980. A mere glance at the impugned order reveals that the order
passed by the ld. CIT(A) is cryptic and grossly violative of one of
the facets of the rules of natural justice, namely, that every
judicial/quasi-judicial body/authority must pass a reasoned order,
which should reflect application of mind by the concerned authority
to the issues/points raised before it. The application of mind to the
material facts and the arguments should manifest itself in the order.
Section 250(6) of the Act mandates that the order of the CIT(A)
while disposing of the appeal shall be in writing and shall state the
points for determination, the decision thereon and the reasons for
the decision. The requirement of recording of reasons and
communication thereof by the quasi-judicial authorities has been
9 ITA no.980/Del./2012
read as an integral part of the concept of fair procedure and is an
important safeguard to ensure observance of the rule of law. It
introduces clarity, checks the introduction of extraneous or
irrelevant considerations and minimizes arbitrariness in the
decision-making process.