By TIOL News Service

BANGALORE, NOV 30, 2018: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether conclusion to be recorded by any authority should stand preceded by reasons, and in absence of same becomes unsustainable. YES IS THE VERDICT.

Facts of the case:

The assessee is an individual and also partner in the business concern Kaypee Exporters. During the relevant year, the premises of Kaypee Exporters was subjected to search proceedings u/s 132 in addition to the premises of assessee. Pursuent thereto, several documents were recovered and the AO initiated assessment proceedings against Kaypee Exporters. Certain material belonging to the assesee was handed over on the ground that they were undisclosed income in his hands. Pursuant to the receipt of the material, a notice was issued u/s 158 BD calling upon the assessee to file her return. The return was accordingly filed and the AO computed capital gains arising from the K.G.F.property at Rs.5,01,207/- as against the claim of capital loss of Rs. 3,20,642/-. On appeal, the assessee was granted partial relief.

High Court held that,

++ this Court is of the considered view that the contentions of assessee's counsel requires to be accepted. Whenever a question of jurisdiction is raised before the authority, the same should be adjudicated. The very power of the authority to consider the plea of assessee is called in question. Whether it is to be accepted or not is completely within the jurisdiction of the authority. However, the question of jurisdiction should necessarily be answered by the authority which has not been done. Therefore, the first substantial question of law is answered in favour of the assesee;

++ in so far as second substantial question of law, with regard to modification in respect of KGF property is concerned, the Tribunal has not given any reasons for recording such a finding. Any conclusion to be recorded by the authority should stand preceded by reasons. In the absence of recording any reasons, the order becomes unsustainable. Hence, the order stands vitiated and therefore, the second substantial question of law is accordingly answered. The matter is therefore remanded to the Tribunal for a fresh adjudication.

(See 2018-TIOL-2486-HC-KAR-IT)