Sh. Tara Chand v. Commissioner Of Income Tax, Chandigarh And Another

ITA-25-2001 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH 410 ITA-25-2001 (O&M)Date of Decision : 30.1.2020 Sh. Tara Chand ee. Appellant Versus Commissioner of Income Tax, Chandigarh and another | . Respondents CORAM : HON'BLE MR.JUSTICE AJAY TEWARI* HON'BLE MR.JUSTICE AVNEESH JHINGAN888 Present ;Mr. Alok Mittal, Advocatefor the appellant. Ms. Urvashi Dhugga, Sr. Standing counselfor the respondents, 888 AJAY TEWARI, J. (Oral) inThis appeal has been filed by the assessee under Section 260-A of the Income Tax Act, 1961 (for short ‘the act’) against the order dated29.9.2000 of the Income Tax Appellate Tribunal, Chandigarh Bench 'B'Chandigarh (for short ‘the Tribunal’) passed in Income Tax AppealNo.2143/Chandi/1992 relating to A.Y. 1990-91, claiming the followingsubstantial questions of law :- (a). Whether in thefacts and circumstances of the case, theorders Annexures P-I and P-3 are legally sustainable ?(b). Whether in thefacts and circumstances of the case, theorder passed by the Appellate Tribunal is legally sustainablein as much as allfacts and evidence was in the knowledge of ITA-25-2001 (O&M) the Assessing Authority prior to passing of the assessmentorder ? (c). Whether in the facts and circumstances of the case,|order passed by the Appellate Tribunal is legally sustainablein as much as no opportunity of hearing had been affordedto the assessee-appellant by the Assessing Authority duringthe proceeding initiated U/s I3lof theAct against Shri SumerChand and the same have not been brought on record ? (d).Whether in the facts and circumstances of the case,the order of the Appellate Tribunal in remanding the caseback to the Assessing Authority 1s legally sustainable in asmuch as the Assessing Authority had the knowledge of thefacts and evidences qua the said additions of Rs. 2,77,375/-and Rs.3,95,200/-? (e).Whether in thefacts and circumstances of the case, theorder of the Appellate Tribunal is legally sustainable in asmuch as the factum of the retraction of the affidavit dated29.6.1992 by Shri Sumer Chand subsequent to the issuanceof Notice U/s 131 of the Act during the pendency of theassessee-appellant appeal before the CIT(A) had not beentaken into consideration by the Appellate Tribunal ? !Brief facts of the case are that the assessee was trading inwheat and also had a rice sheller. He had filed its return of income tax forthe assessment year 1990-91 on 30.11.1990 declaring income ofRs.1,43,970/-. By this appeal the appellant has challenged the order of theTribunal whereby the case was remanded back to the Assessing Officer tore-decide the issue regarding the addition. The Assessing Officer hadtreated some sales to be outside the book of accounts and other sundryissues relating to yield. In appeal, the Commissioner set aside the orderof the Assessing Officer and accepted the appeal of the assessee. TheTribunal noticed that two sets of documents had been placed before the ITA-25-2001 (O&M) authorities and thought it fit that the entire issue be re-looked at by theAssessing Officer after considering all the documents afresh. Relevantportion of Tribunal order is quoted below :- ITA-25-2001 (O&M) authorities and thought it fit that the entire issue be re-looked at by theAssessing Officer after considering all the documents afresh. Relevantportion of Tribunal order is quoted below :- “7. Now before us there are two statements ofSumer Chand,one made before the CIT(A) and the other recorded by theAO dis-owning his earlier statement and the affidavit madebefore the CIT(A) and similarly there are two copies ofstock register, one filed before the CIT(A) and the otherproduced before the AO in support of his submissions madebefore the AO. The CIT(A) has rejected second statementgiven by Shri Sumer Chand before the AO recorded butduring the proceedings initiated u/s 271(1)(c)though ofcourse during the pendency of appellate proceedings. TheCIT(A) rejected the statement of Sumer Chand, made beforethe AO and supporting the case of the department to theeffect that no sales were made in the month of June to theassessee by M/s Angel Rice Mills, because according to theCIT(A) the AO had recorded the statement of this witness atthe back of the assessee andfurther because the AO has notallowed an opportunity to the assessee to cross-examine thiswitness. It is also important to mention here that thesecontradictory stands taken by Shri Sumer Chand one beforethe CIT(A) and the other before the AO, are so significantand important that their values cannot be under estimatedbecause of the statement of this witness as well as theveracity of the entries in the stock register of Angel RiceMills is going to resolve the main controversy 1.e. as towhether any rice was sold by this firm to the assessee on26.6.89 or the same was sold in the month of July 1989because this very rice in turn had been sold by the assesseefirm to some other party. If we carefully go through theorder of CIT(A) wefind that even on theface of his orders itappears that the statements recorded by the CIT(A) duringthe course of appellate proceedings, the affidavits of the ITA-25-2001 (O&M) parties taken on record and the copies of stock register ofAngel Rice Mills obtained by the CIT(A) and kept on recordduring appellate proceedings, the affidavits of the partiestaken on record and the copies of stock register of AngelRice Mills obtained by the the CIT(A) and kept on recordduring appellate proceedings do not seem to have beenproperly confronted to the AO and itfurther appears that theCIT(A) has also not given proper opportunity to the AO tocross examine these persons whose statements and affidavitswere taken on record by the assessee though the CIT(A)seems to have completed the formalities of writing in hisorder that he had complied with the requirements of lawbecause he observed that the AO was present during theentire proceedings because in our opinion, had the CIT(A) inreal sense allowed appropriate opportunity to the AO tocross examine these witnesses and had allowed opportunityto him in confronting the affidavits of the parties taken onrecord, there would have been no needfor the AO to call thewitness Shri Sumer Chand again to produce the recordsbefore him and make statement before him wherein he hasexplained in detail before the AO as to how he gave wrongstatement before the CIT(A) and as to how the wrongaffidavit was filed before the CIT(A) supporting the case ofthe assessee though in fact the stand taken by the departmenton the basis of the records ofAngel Rice Mills was correctwith regard to the fact that Angel Rice mills as per theirstock register and other relevant records has sold the rice tothe assessee in the month of July and not in the month ofJune 1989 as claimed by the Assessee. In the peculiarcircumstances of the case we refrain from commenting onthe evidentiary value of the statement of the witness of ShriSumer Chand recorded by the CIT(A) and the one recordedby the AO as well as regarding evidentiary value of theaffidavit well as material collected and placed on the recordby The CIT(A) during the appellate proceedings as well as ITA-25-2001 (O&M) 5 ITA-25-2001 (O&M) 5 the proceedings initiated u/s 271(1)(c) against the assessee(of course both the proceedings in this regard tookplace onor near about the same time), but we cannot helpcommenting on the point that the CIT(A) has not affordedopportunity to the AO before admitting the statement,affidavit and other material as evidence. At the same timewe also find that the AO also does not seem to have affordedappropriate opportunity to the assessee before relying uponthe statement given by Sumer Chand as well as before takingother materiaql on record which lateron also came intconsideration before the CIT(A). 3In these circumstances of the case, we do not find theimpugned order to be a perverse or illegal. 4Consequently, the appeal stands dismissed.5Since the main case has been decided, the pendingapplication, if any, also stands disposed of. (AJAY TEWARIT) JUDGE 30.1.2020anuradha (AVNEESH JHINGAN)JUDGE Whether speaking/reasoned$Yes/NoWhether reportable$Yes/No