Emkay Industries Limited, Through Shri Rakesh Khanna, M.D. Vs. Cit - Court Judgment

Excerpt:
- administrative law - government contract: [vijender jain, c.j., rajive bhalla & sury kant, jj] government contract rejection of highest bid challenge as to held, state has no dominus status to dictate unilateral terms and conditions when it enters into contract. its actions must be reasonable, fair and just in consonance with rule of law. as a necessary corollary thereto, state cannot refuse to confirm highest bid without assigning any valid reason and/or by giving erratic, irrational or irrelevant reasons. the state is free to enter into a contract just like any other individual and the contract shall not change its legal character merely because other party to contract is state. though no citizen possesses a legal right to compel state to enter into a contract, yet latter can neither pick and choose any person arbitrarily for entering into such agreement nor can it discriminate between persons similarly circumstanced. similarly, where breach of contract at hands of state violates fundamental rights of a citizen or its refusal to enter into a contract is contrary to statutory provisions or public duty, judicial review of such state action is inevitable. likewise, if state enters into a contract in consonance with article 299 rights of the parties shall be determined by terms of such contract irrespective of fact that one of the parties to it is a state or a statutory authority. for these precise reasons the equitable doctrine of promissory estoppel has been made applicable against the government, as against any other private individual, even in cases where no valid contract in terms of article 299 was entered into between the parties. hence, if government makes a representation or a promise and an individual alters his position by acting upon such promise, the government may be required to make good that promise and shall not be allowed to fall back upon the formal defect in the contract, though subject to well known limitations like larger public interest. the state, thus, has no dominus status to dictate unilateral terms and conditions when it enters into contract and its actions must be reasonable, fair and just and in consonance with rule of law. as a necessary corollary thereto state cannot refuse to confirm highest bid without assigning any valid reason and/or by giving erratic, irrational or irrelevant reasons. -- consumer protection act, 1986 [c.a. no. 68/1986]. articles 14 & 300a: government contract noon-acceptance of highest bid held, it does not result in taking away right to property of highest bidder highest bid, per se, unless it is accepted by competent authority, and consequential sale certificate is issued, does not grant the highest bidder right to property of type which is protected under article 300a right to property is limited to confer highest bidder the right to challenge action of appropriate authority in refusing to accept highest or other bids. [air 1984 p&h 282 (fb) explained] articles 14 & 226: government contract rejection of highest bid held, highest bidder has locus standi to maintain writ petition and assail action of state government or its authorities by contending that his bid has been turned down for arbitrary, illegal or perverse reasons however in such matters, heavy onus would like on petitioner bidder to establish his allegations as state action shall always be presumed to be in accordance with law - ' 3. whether under the facts and circumstances of the present case finding of the itat in not considering the present case in its true prospective is perverse and thus bad in law? ' 4. whether under the facts and circumstances of the case and in view of the specific finding of cit (a) that the provisions of sections 68, 69, 69a, 69b, 69c and 69d are not applicable at all to the facts of the present case since the assessee himself has declared the amount of commission received as income, the orders of the itat setting aside to the file of cit(a) for re-examining the additional evidence is perverse and bad in law? 2. the assessing officer during the course of assessment made certain additions under section 68 of the act holding that the assessee had failed to establish the identity, genuineness and creditworthiness of the transactions. the ao sought time for verification but failed to send his report. hence, in our opinion, it would have been better, if the learned cit(a) would have directed the ao to examine the parties in accordance with law to establish the identity genuineness and creditworthiness of those parties and thereupon decide the issue since the detailed enquiry is required, was not carried out. since the work is not properly entrusted to the ao and cit(a) is doing it all by himself, the learned cit(a) would have been justified, if he had get the evidence verified by the ao which he failed to do so.adarsh kumar goel, j.1. this appeal has been preferred by the assessee under section 260a of the income tax act, 1961 (for short, 'the act') against the orders of itat amritsar bench in i.t.a. no. 428 (asr) 2008 dated 8.10.2008 for assessment year 2004-05, proposing to raise following substantial questions of law: 1. 'whether i.t.a.t. was justified in setting aside the issues to the file of cit(a) without appreciating the findings of cit(a) on record in addition to facts and evidences and also being a final fact finding body and that too without giving reasonable opportunity to the appellant by denying hearing on the first adjournment application by the counsel that too under unavoidable circumstances?' 2. 'whether the i.t.a.t. was not justified in setting aside the issues to the file of cit(a) against the established principles of law that no one should be allowed to play second innings and that too without going into merits of the case, it being a last fact finding body and thus order of itat being perverse needs to be set aside?' 3. 'whether under the facts and circumstances of the present case finding of the itat in not considering the present case in its true prospective is perverse and thus bad in law?' 4. 'whether under the facts and circumstances of the case and in view of the specific finding of cit (a) that the provisions of sections 68, 69, 69a, 69b, 69c and 69d are not applicable at all to the facts of the present case since the assessee himself has declared the amount of commission received as income, the orders of the itat setting aside to the file of cit(a) for re-examining the additional evidence is perverse and bad in law?2. the assessing officer during the course of assessment made certain additions under section 68 of the act holding that the assessee had failed to establish the identity, genuineness and creditworthiness of the transactions. in the course of appellate proceedings, the assessee furnished additional evidence in the form of confirmation letters which were forwarded to the ao. the ao sought time for verification but failed to send his report. the cit (a) allowed the appeal of the assessee by accepting additional evidence. 3. on appeal by the revenue to the tribunal, it was held that cit (a) should have awaited the opinion of the ao or should have conducted inquiry himself as provided under section 250(4) of the act. the tribunal remitted the matter for fresh decision. the conclusion of the tribunal is as under: hence, in our opinion, it would have been better, if the learned cit(a) would have directed the ao to examine the parties in accordance with law to establish the identity genuineness and creditworthiness of those parties and thereupon decide the issue since the detailed enquiry is required, was not carried out. since the work is not properly entrusted to the ao and cit(a) is doing it all by himself, the learned cit(a) would have been justified, if he had get the evidence verified by the ao which he failed to do so. hence in the interest of justice, we set aside the issue to the file of the cit(a) and direct the ao to send remand report after duly examining the concerned parties. since we have set aside the issue to the file of the learned cit(a) we refrain from going to the merits of the case.4. we have heard learned counsel for the appellant. he submits that the cit (a) had analysed the additional evidence properly and in such a situation, rem and by the tribunal is uncalled for. 5. the tribunal has merely remanded the matter with the finding that the cit(a) had not fully enquired into the matter. in the impugned order, option has been left to the cit(a) to either look into the matter himself or to have a verification done from the assessing officer. no prejudice is caused to the appellant. view taken by the tribunal is a possible view. no substantial question of law arises. 6. the appeal is dismissed.