Telangana High Court
Dongfang Electric Corporation Ltd. vs Commissioner Of Income Tax on 7 January, 2025
Author: G.Radha Rani
Bench: G.Radha Rani
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE DR. JUSTICE G.RADHA RANI
WRIT PETITION Nos.35796, 36006 AND 36007 OF 2024
COMMON ORDER:
(per Hon’ble Sri Justice Sujoy Paul)
Sri C.V.Narasimham, learned Senior Counsel appears for
Sri Mohd Mukhairuddin, learned counsel for the petitioner and
Sri Vijhay K Punna, learned Senior Standing Counsel for Income
Tax Department appears for respondent Nos.1 and 2.
2. With the consent finally heard.
3. Regard being had to the similitude of the questions involved,
these matters were analogously heard and decided by this
common order.
4. The facts are taken from WP.No.35796 of 2024. The
petitioner was subjected to assessment for the Assessment Year
2013-2014 and assessment order (Annexure P.4) was passed on
18.05.2022 determining the attributable income in India to the
tune of 10%. The petitioner received a notice dated 16.06.2023
under Section 263 of the Income Tax Act, 1961 proposing revision
of percentage to the tune of 25%.
5. Learned counsel for the petitioner informed that against the
said notice, WP.No.33230 of 2023 and batch were filed, which
were subsequently withdrawn with liberty to avail the remedy
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under the Direct Tax Vivad Se Vishwas Scheme, 2024 ( Scheme
of 2024). Learned counsel further submits that the petitioner
preferred an application online in prescribed form under Section
91 of the said scheme. The petitioner has paid the requisite
amount before filing the application under Section 91 of the
scheme, which can be gathered from part-E of the application
(Annexure P.3). By taking this Court to part-F of said application,
which as per contention of petitioner is an auto generated amount
determined by the Department, an amount of Rs.-2,07,58,934/-
was refundable. The petitioner was shocked to receive the
rejection order captioned as “rejection remarks”. Learned counsel
for the petitioner submits that “rejection remarks” are not properly
worded. It gives an impression as if the Scheme of 2024 does not
override the Scheme DTVSV of 2020 (Scheme of 2020), whereas, a
plain reading of Section 90 of Scheme of 2024 makes it clear that
it is pregnant with a non-obstante clause, which has an overriding
effect not only on income tax, but, also on any other law which
was in force. Thus, it has over riding effect even on the Scheme of
2020. Section 94(2) was heavily relied upon to submit that tax is
very much refundable, if conditions are satisfied. Thus, the
impugned order is bad in law.
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6. It is submitted that the impugned order is sought to be
supported by assigning different and supplementary reasons in
the counter, which cannot be taken into account in view of the
Constitution Bench Judgment of Supreme Court in Mohindhr
Singh Gill and Another v. Chief Election Commissioner, New
Delhi and others 1.
7. Learned Senior Standing Counsel for Income Tax
supported the impugned order and submits that the counter
shows the decision taken by “rejection remarks” is
in consonance with law.
8. The parties have confined their arguments to the extent
indicated above.
9. We have heard the parties at length and perused the record.
The impugned order reads thus:
“Rejection remarks:
The assessee’s Issues related to disputes and taxes
settled in DTVsV 2020, but violates conditions of the
same including no refund of taxes paid. DTVsV 2024
does not override the DTVsV 2020 and has to be read
harmoniously with it. Hence, the form 1 is rejected.
Rejection date:
05-Dec-2024″
1
(1978) 1 Supreme Court Cases 405
4
10. Before dealing with the contents of the “rejection remarks”,
we deem it proper to deal with the argument of learned Senior
Standing Counsel for Income Tax based on the counter filed in
this matter. In Mohindhr Singh Gill‘s case supra, the
Constitution Bench made it clear that validity of an order of a
statutory authority must be judged on the basis of reasons
assigned in the order and new reasons cannot be provided by
filing counter affidavit in the Court. The relevant portion reads
thus:
“8. The second equally relevant matter is that when a
statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so
mentioned and cannot be supplemented by fresh reasons
in the shape of affidavit or otherwise. Otherwise, an order
bad in the beginning may, by the time it comes to court
on account of a challenge, get validated by additional
grounds later brought out. We may here draw attention to
the observations of Bose, J. in Gordhandas Bhanji:
“Public orders, publicly made, in exercise of a statutory
authority cannot be construed in the light of
explanations subsequently given by the officer making
the order of what he meant, or of what was in his mind,
or what he intended to do. Public orders made by
public authorities are meant to have public effect and
are intended to affect the actings and conduct of those
to whom they are addressed and must be construed
objectively with reference to the language used in the
order itself.”
Orders are not like old wine becoming better as they grow
older.”
(Emphasis Supplied)
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11. The law laid down by Constitution Bench in Mohindhr
Singh Gill‘s case supra is still a good law. Thus, the reasons
assigned in the counter, which does not form part of rejection
order will not instill life or improve the rejection order. Thus, we
are not inclined to enter on those reasons and deem it proper to
examine the reasons given in the “rejection remarks”.
12. We may hasten to add that first line of “rejection remarks” is
not happily worded. It is difficult to gather exact meaning of the
first line. It is incomprehensible. However, the first line gives an
impression as if something is settled pursuant to Scheme of 2020
cannot result into refund of taxes paid. Assuming that this is the
meaning arising therein, this needs to be examined in view of
Section 90 of the Scheme which reads thus:
“90. Subject to the provisions of this Scheme, where a
declarant files under the provisions of this Scheme on or
before the last date, a declaration to the designated
authority in accordance with the provisions of section 91
in respect of tax arrear, then, notwithstanding anything
contained in the Income-tax Act or any other law for the
time being in force, the amount payable by the declarant
under this Scheme shall be as mentioned in the Table
below…”
(Emphasis Supplied)
13. The second reason in the “rejection remarks” is that the
Scheme of 2024 does not override the Scheme of 2020. This
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reason is also required to be relooked in the light of language
employed in Section 90 reproduced hereinabove. In the considered
opinion of this Court, the impugned order is too sketchy, too short
and too cryptic in nature. The ‘reasons’ are held to be heart beat
of the ‘conclusions’. In the absence of reasons, conclusions
cannot sustain judicial scrutiny. The Supreme Court in Kranti
Associates (P) Ltd. v. Masood Ahmed Khan 2 emphasized the
need of assigning reasons in administrative, quasi judicial and
judicial orders. Relevant para reads thus:
“47. Summarising 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.
2
(2010) 9 SCC 496
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(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 lifeblood
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 Harvard Law Review 731-37] .)
(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
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was considered part of Strasbourg Jurisprudence. See Ruiz
Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29
and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)] ,
wherein the Court referred to Article 6 of the 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.”
14. If the impugned order is tested on the anvil of principles laid
down in Kranti Associates (P) Ltd. (supra), it cannot sustain
judicial scrutiny because of its cryptic nature and non-disclosure
of reasons. Thus “rejection remarks” in all the matters are set
aside. The matters are restored back in the file of respondent
No.1, who, shall give personal hearing to the petitioner and pass a
fresh order, in accordance with law, without getting mechanically
influenced by previous order and counter filed.
15. Learned Senior Counsel for the petitioner intended to take
us to the calculation part and the refund part and the related
provision. We are not inclined to enter into this aspect in these
proceedings. It may be remembered that the scope of judicial
review under Article 226 of the Constitution is basically on the
decision making process and relating to the reasons assigned in
the impugned order. If impugned order suffers from non
application of mind and does not contain adequate reasons, the
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proper course is to set aside the order by directing the authority
concerned to rehear the party and pass a fresh order. Thus we
are not inclined to undertake the aforesaid exercise suggested by
learned counsel for the petitioner (see Kalinga Mining Corpn. v.
Union of India 3).
16. Accordingly, the Writ Petitions are disposed of, without
expressing any opinion on the merits of the case. No order as to
costs.
Miscellaneous petitions pending, if any, shall stand closed.
_______________________
JUSTICE SUJOY PAUL
_______________________________
DR. JUSTICE G.RADHA RANI
07.01.2025
nvl/sa
3
(2013) 5 SCC 252