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Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR
Before: SHRI SANJAY ARORA, HON’BLE & SHRI MANOMOHAN DAS, HONBLE
O R D E R Per Bench: This is a set of two Appeals, i.e., by the Revenue and the Assessee, in respect of it’s assessment for Assessment Year (AY) 2011-12. While the assessee’s appeal is directed against the revision of it’s assessment under section 153A read with sec. 143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) dated 28/3/2013, vide order u/s. 263 dated 31/3/2015, the Revenue’s appeal is against the part acceptance of the assessee’s appeal by the Commissioner of 1 | P a g e & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates Income Tax (Appeals)-1, Jabalpur (‘CIT(A)’, for short) contesting it’s said assessment dated 30/3/2016 pursuant to the first appellate order dated 01/4/2019.
The assessee’s appeal was taken up for hearing first. This is as acceptance of it’s appeal, impugning the revision of it’s original assessment, would render infructuous the Revenue’s appeal. The only contention, raised per additional ground by Shri Bardia, the ld. counsel for the assessee, who did not argue any other ground of appeal of the Memorandum of Appeal, was of the revision under reference being barred by time. The impugned order (IO), though dated 31/3/2015, so that it was apparently passed on that date, could not, in view of the material on record and surrounding circumstances, be said to have been passed on that date, being the last date on which it could be made in terms of s. 263(2), but only later. Toward his this contention, Sh. Bardia would take us through the following: a) reply dated 09/02/2016 by the Principal Commissioner of Income Tax -1, Jabalpur, to the assessee’s application under Right to Information Act, 2005 (RTI Act) dated 08/02/2016 explaining the modus operandi, i.e., of the despatch being made through the Despatch Section after being entered in the Despatch Register, with the speed-post acknowledgement operating as a surrogate proof of receipt by the addressee, and that the articles returned are served through the Notice Server. It is further informed that the requisite information stands already communicated on an earlier occasion in response to an application under RTI Act (PB-2, pg.6); b) the affidavit dated 09/04/2016 by Shri Mahesh Kemtani, partner in the assessee-firm, averring that the date of booking of the parcel containing the IO, identified by speed post acknowledgment number, at the Jabalpur Head Post- Office, is on 07/04/2015 (PB-2, pgs.10-11); c) copy of the assessee’s letter dated 11/4/2016 to the postal department, Civil Lines, Jabalpur, seeking the date of receipt of dak, and the reply thereto, subscribed therein, stating the same to have been received (from the department for delivery), and delivered, on 08/04/2015 (PB pg. 7); and d) copy of the order-sheet entry by this Bench of the Tribunal dated 11/4/2016, i.e., on an earlier occasion when the matter came up before it for hearing. which was read out during hearing, and wherein the Tribunal had required the Revenue to furnish evidence as to IO having been indeed passed on 31/3/2015, including, though not limited to, delivery thereof to the postal department (PB-2, pgs.8-9). & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates No response to these directions by the Bench, it was contended by Shri Bardia, stands received since from the Revenue, even as the touring Bench was only up to 13/4/2016. The Revenue was, in view of the same, required to furnish all the documents it wished to rely upon in support of it’s claim that the IO is not time- barred, and was indeed passed on 31/3/2015, i.e., the date subscribed on the order, viz. the date on which the secretarial staff of the revisionary authority received the order, or was transmitted to the postal department for despatch, and which is claimed by the latter to be on 07/4/2005. The Revenue, after a couple of adjournments, produced only the despatch register for 31/3/2015 (copy on record), in which the assessee’s order is listed at sr.no. 5299. The said register, as explained by Sh. Gotru, the ld. CIT-DR, is maintained by the despatch section, through which the despatch function is organized. We observe that it is not signed (for any entry therein) by the receipt clerk, and which (signature of the receipt clerk) is said to be obtained on the internal record, maintained separately by each section, on passing of the letter (article) for being conveyed to the addressee, to the despatch section, i.e., in token of it having been handed-over thereto. The said internal record is stated to be not available. On being further asked by the Bench as to why, in that case, the despatch clerk retained the article (order) with him for several days, and did not despatch it the same or the following day, no satisfactory answer was forthcoming from Shri Gotru. It is understandable that a parcel/article may not be dispatched the same day, but on the succeeding day or even the day after, i.e., due to rush of work. This becomes all the more relevant as, as explained, as per the understanding arrived at with the postal department, a person from the said Department visits the Income-Tax Department on a daily basis for collection of posts, and who again provides a receipt to the despatch clerk in token of his acceptance of the article for post. Needless to add that the said record, evidencing the delivery of the posts to the postal department, which acts as the Revenue’s agent for delivery of it’s communications, etc., and which would be retained only by its’ dispatch section, is not available. The despatch register also does not bear 3 | P a g e & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates either the date of delivery to the postal department or the receipt number/date per which it stands delivered thereto. Further, it is not shown that all the Dak of 31/3/2015, which ranges from serial no. 5248 to 5301, was dispatched along with, i.e., only on 07/4/2015, several days later, which could be the case if the person from the postal department indeed did not visit the Income-tax department all this while. Further still, i.e., in case of non-visit of the concerned person from the postal department, which would require suitable confirmation in this regard being issued by the postal department, dak of the intervening days, i.e., 01/04/2015 to 07/04/2015, i.e., five working days later, would also have been dispatched on the same day, i.e., 07/4/2015, besides requiring a confirming statement from the head of the despatch section, on which he is liable to be questioned. The deposition of the despatch clerk, who would not be only staff in that section, so that his absence, assuming so, would not stall matters, may be required to clarify matters. On this being asked by the Bench, Shri Gotru was unable to even state the name of the concerned staff/clerk; rather, stating that it would not be possible for him to do so. What, then, one may ask, is the basis to say that the IO was indeed received for despatch on 31/3/2015, the date on which it is entered in the despatch register – a grossly incomplete record, no basis for entry/s in which is shown, with even the identity of the person maintaining the same being conspicuous by its absence, and nothing to exhibit it as an authenticated document, justifying the entries therein.
3. This Bench has recently, i.e., on 01/7/2022, passed an order in Suresh Kumar Upadhya & Sons v. ITO (ITA Nos. 19 to 21/Jab/2017), wherein orders dated 31/3/2017, similarly received by the assessee on 13/4/2017, i.e., 13 days later, was not considered by the Bench as liable to be construed as not made on the date of the order, i.e., 31/3/2017. This is as the date of dispatch (07/4/2017) could not by itself be regarded as the date of the order, even as explained by the Apex Court in CIT v. Mohammed Meeran Shahul Hameed [2021] 438 ITR 288 (SC) as well as the Hon'ble jurisdictional High Court in Bhagwan Das Oil Mills vs. CCIT & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates 2016 (28) STG 620 (MP), as claimed by the assessee. No other material was brought on record by the assessee, so that the Tribunal held that the presumption of regularity of official acts u/s. 114(e) of the Indian Evidence Act, shall hold. There could be, it explained, several stages before the despatch of an order. The order would require being vetted, corrected and verified by the ministerial staff; entered in the relevant records, before being forwarded by it to the despatch section, through which the despatch is centralised, for being in turn forwarded to the postal department, which makes the actual delivery. The order under reference though could be said to be issued the moment it is signed and made-over to the secretarial staff for the purpose, which may be signified by record, i.e., goes out of control of the signing authority, who becomes functus officio upon the said signing. In the case of the Tribunal, for instance, the order is passed on its pronouncement in the open court, even as the same may be, for various reasons, received by the Registry from the secretarial staff only later, much less the date on which the verified copies of the order are made-over by the despatch section of the Registry to the postal department for transmitting it to the parties. Further, in that case, it was too late in the day to call for any record from the Department – the onus for which though was on the assessee, who may, in case of non-cooperation by the Department, inasmuch as it is it which is in the possession of the record, be directed by an appellate authority, with a failure of compliance being even otherwise liable to be viewed adversely. In the instant case, on the contrary, the assessee had filed under RTI even prior to 08/4/2016, reference to which is made in the Revenue’s reply dated 09/4/2016, stating its compliance as the reason for not furnishing the information called for per the instant application. No response was forthcoming from the Department despite clear instructions by the Bench vide it’s order sheet entry dated 11/4/2016. It was incumbent on the Revenue to have produced the necessary details in respect thereof, i.e., both as per the assessee’s application/s under RTI and the Bench directions. Further still, production of despatch register, which is the only document produced by the Revenue, wherein the impugned order 5 | P a g e & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates is stated as received on 31/3/2015, is itself highly suspect as regards its veracity and authenticity, besides raising several questions, so that it does not assist the Revenue’s case in any manner. Rather, it removes any doubts as regards the movement of the IO from the revisionary authority to his secretarial staff, and from the latter to the despatch section, so that considerations such as vetting, correction and verification (endorsement) of the order passed; making copies thereof; entering it in the relevant records, etc., which may consume time, particularly considering the increased volume of work at the year-end, which prevailed with the Tribunal in Suresh K. Upadhyaya & Sons (supra), did not in fact obtain. All that was required of the Revenue was to clarify the delay by several days in forwarding the order to the postal department by its despatch section, which ought to have been, rather, in view of the last date, with despatch. The statutory presumption of sec. 114(e) of the Evidence Act would, in our view, not be available in the instant case. And, on the contrary, an adverse inference is liable to be drawn in the matter in the absence of any corroborative material brought on record by the Revenue. In fact, the very fact that the matter stands taken up by the assessee within a reasonable time of the order, coupled with the directions by the Bench on an earlier occasion, leaves one in no manner of any doubt that the Revenue is completely clueless, and has no explanation in the matter. A failure to adduce evidence would, on the contrary, raise the presumption as to adverse inference, as is settled law (refer: Union of India v. Rai Deb Singh Bist [1973] 88 ITR 200 (SC); CIT v. Krishnaveni Ammal [1986] 158 ITR 826 (Mad)). The law in the matter is well-settled, with there being instances galore of the higher courts drawing an adverse inference in the absence of the requisite evidence being led by the person raising the claim. In Delhi Cloth & General Mills Co. Ltd. v. State of UP [1979] 118 ITR 277 (SC), for example, the Revenue raising a claim before the Hon’ble Court that the return filed by the assessee on November 8, 1958 was not in response to the notice u/s. 15(3) dated April 7, 1955, inasmuch as it was not within the time prescribed per the said notice, the Hon’ble Court allowing time to 6 | P a g e & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates the parties, particularly the Revenue, to produce material in that behalf, drew an adverse inference in the absence of it producing the relevant record, ostensibly in it’s possession, also finding support therefor from the non-raising of any objection in this regard by the Assessing Officer upon receipt of the said return vide his order dated 27/3/1959 (pg. 288).
4. We, in view of the foregoing, do not consider the ratio of the decisions in Mohammed Meeran Shahul Hameed (supra) and Bhagwan Das Oil Mills (supra), found applicable by the Tribunal in Suresh K. Upadhyay (supra), as applicable in the instant case. The question arising, it may be clarified, is strictly a matter of fact. That an inferential finding of fact is based on well-established rules of evidence, would not make it any less a finding of fact. The decision by the Tribunal in that case, as indeed in the instant case, is based on the material on record, of course drawing on the settled jurisprudence with regard to taking cognizance of evidence or, as the case may be, drawing adverse inference in its absence. The Revenue has been completely unable to discharge the burden cast on it in establishing the existence of the order as on 31/3/2015, the date subscribed thereon, with the surrounding circumstances raising considerable doubts with regard thereto, entitling drawing an adverse inference. The reliance on decisions by the assessee, viz. CIT v. Rai Bahadur Kishore Chand & Sons [2008] 4 DTR 162 (P&H); CAIT v. Kappumalai Estate [1998] 234 ITR 187 (Ker), etc., is apposite.
5. We, in view of the foregoing, hold the impugned revision order as not passed on 31/03/2015, so that it is barred by time u/s. 263(2). The same, as well as the ensuing assessment, disputed by the Revenue, accordingly, fail. It is not necessary therefore to travel to the other Grounds of the Assessee’s appeal or that by the Revenue, with, as afore-said, the arguments before us being limited to the status of the revision order as a valid order in law in view of the challenge to it being within the time prescribed by law. We decide accordingly. & 71/Jab/2015 (AY: 2011-12) Kemtani & Associates 6. In the result, the assessee’s appeal is allowed and the Revenue’s appeal is dismissed. Order pronounced in open Court on December 09, 2022 Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 09/12/2022 vr/- Copy to:
1. 1. The Assessee : Kemtani & Associates, B-663, Mahanadda, Madam Mahal, Jabalpur (MP) 2. The Revenue: 1)Pr.CIT-1,Jabalpur 2) Dy.CIT,Circle-1(1), Jabalpur.