KUNDAN LAL vs. COMMISSIONER OF INCOME TAX

ITC/65/1998HC Punjab & HaryanaPHHC01037869199807 January 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE ALOK SINGH4 pages
AI SummaryDismissed

What were the facts?

The assessee, a commission agent, was subjected to a survey under Section 133-A of the Income Tax Act, 1961, on June 23, 1987. Discrepancies were found between the assessee's records and those of the Market Committee and Food and Supply Department. Following a questionnaire, additions were made to the assessee's income, and a penalty was levied. The Commissioner of Income Tax (Appeals) upheld these additions and made a further enhancement. The Income Tax Appellate Tribunal affirmed the CIT(A)'s order. The assessee then sought a reference to the High Court under Section 256(1) of the Act, which was declined. The present petitions are filed under Section 256(2) of the Act, seeking a direction for reference.

What did the High Court hold?

The High Court held that no referable question of law arises from the order of the Tribunal. The Court found no merit in the assessee's petitions. The CIT(A) had noted that the assessee failed to explain the huge discrepancy in wheat records between different registers. The plea regarding six farmers not unloading their produce was raised belatedly and supported by self-serving affidavits, which were not entertained as additional evidence. The CIT(A) also noted that the Income Tax Officer had given credit for bags returned to farmers, indicating that the assessee's explanation was not fully accepted. The Tribunal had reiterated these observations. The Court concluded that the findings of the CIT(A) and the Tribunal were based on the appreciation of material on record and were not shown to be perverse. Therefore, the petitions were dismissed.

What were the issues?

1. Whether, in the facts and circumstances, the Income-Tax Appellate Tribunal was justified in upholding the addition and enhancement of income, ignoring the explanation provided by the assessee regarding the disbursal of wheat bags noted during the survey? (Question of law and fact, turning on Section 133-A and general principles of evidence). 2. Whether the Tribunal was justified in adjudicating the appeal by relying solely on the pleadings from the first appeal, disregarding the facts and figures before it? (Question of law and fact, turning on procedural fairness). 3. Whether the order passed by the Tribunal, ignoring unassailable evidence, constitutes a violation of the principles of natural justice? (Question of law, turning on principles of natural justice). 4. Whether the Tribunal's finding was perverse and vitiated, based on both relevant and irrelevant material while ignoring vital material presented during the hearing? (Question of law, turning on perversity of findings). 5. Whether the Tribunal's conclusion was perverse, as it based its decision on figures of wheat arrival from the A.D.E.S.C. register but failed to use the same register for outgoing figures? (Question of law and fact, turning on consistency of evidence). Assessee's contentions: The enhancement of addition was unjustified as the survey discrepancies were duly explained. The Tribunal ignored evidence and violated principles of natural justice. Revenue's contentions: No referable question of law arises due to concurrent findings of fact by the CIT(A) and the Tribunal.

Which sections of the Income-tax Act were involved?

Section 133-A,Section 256(1),Section 256(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITC No.65 of 1998 (O&M) & other connected case being ITC No.66 of 1998(O&M) Date of decision: 7.1.2011 Kundan Lal Narain Dass. -----Applicant. Vs. Commissioner of Income Tax. -----Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE ALOK SINGH Present:- Mr. Akshay Bhan, Advocate for the petitioner. Mr. T.K. Joshi, Standing Counsel for the respondent. --- ADARSH KUMAR GOEL, J.

1.

This order will dispose of I.T.C. No.65 and 66 of 1998, as both the petitions are stated to be inter-connected.

2.

I.T.C. No.65 of 1998 has been preferred by the assessee under Section 256(2) of the Income Tax Act, 1961 (for short, “the Act”) seeking direction for referring for opinion of this Court following questions of law:- (i) Whether in the facts and circumstances of the case, the Income-Tax Appellate Tribunal was justified to uphold the addition made on assessment as also the enhancement made in the first appeal altogether ignoring the pleadings supported by paper-book filed explaining the disbursal of wheat bags received and noticed by the survey party?

ITC No.65 of1998 (ii) Whether in the facts and circumstances o

The order continues below.

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