COMMISSIONER INCOME TAX,RAIPUR vs. M/S.CHHATTISGARH IRON and STEEL WORKS

ITA/47/2004HC ChhattisgarhCGHC01001671200430 August 2009Author: HON'BLE SHRI JUSTICE DHIRENDRA MISHRA,HON'BLE SHRI JUSTICE RANGNATH CHANDRAKAR21 pages
AI SummaryRemanded

What were the facts?

A search operation under Section 132 of the Income Tax Act, 1961, was conducted in July 1982 on the business and residential premises of the assessee group, including M/s Chhattisgarh Iron & Steel Works and M/s Bansal Brothers. During the search, various documents, including loose sheets containing cash transactions for the financial year 1981-82 for both firms, were seized from the residence of Smt. CR Bansal. The assessee contended that these papers were fictitious, false, and unreliable. Subsequently, affidavits from the group's accountants, Shri NB Lalson and Shri P. Rajan, were filed, confessing to planting fabricated documents at Shri KK Bansal's residence to blackmail their employers and expect rewards from the revenue department.

What did the High Court hold?

The High Court held that the ITAT was not justified in law in not giving a finding regarding the applicability of the presumption under Section 132(4A) of the Income Tax Act, 1961, to the assessment proceedings. The Court found that both the CIT(A) and the Tribunal had reversed the AO's findings without adequately addressing the AO's cogent reasons for rejecting the assessee's explanation regarding the seized loose sheets. The Court noted that the AO had rightly held that the confessional statements of the accountants were made to save the assessees from the consequences of the seizure, as the loose sheets detailed clandestine business activities. The Court relied on the Supreme Court's decision in Sree Meenakshi Mills Ltd. to emphasize that a finding of fact is open to attack as erroneous in law only if it is not supported by evidence or is unreasonable and perverse, and that the cumulative effect of facts must be assessed. The High Court answered the question of law in the negative, in favour of the revenue and against the assessees. The appeals preferred by the revenue were allowed, and the impugned orders of the Tribunal were set aside. The matters were remanded to the Tribunal for a fresh decision after recording its finding on the applicability of Section 132(4A).

What were the issues?

1. Whether, under the facts and circumstances of the case, the Income Tax Appellate Tribunal (ITAT) was justified in law in not giving a finding in its order regarding the applicability of the presumption under Section 132(4A) of the Income Tax Act, 1961, to the assessment proceedings? (Question of law) Assessee's Contention: The ITAT's order was justified as the seized documents were proven to be fabricated and planted by the accountants. The burden was on the revenue to prove the genuineness of the documents, and they failed to do so. The confessional statements of the accountants, supported by affidavits, established the falsity of the seized papers. Revenue's Contention: The ITAT erred in not considering the applicability of Section 132(4A) and in reversing the Assessing Officer's (AO) findings without cogent reasons. The AO had rejected the assessee's explanation with valid reasons, and the confessional statements of the accountants were made at the instance of the assessees to escape consequences. The CIT(A) and Tribunal failed to appreciate the cumulative effect of evidence and wrongly placed the burden of proof.

Which sections of the Income-tax Act were involved?

Section 132,Section 132(4A),Section 256(1),Section 292C

AI-generated summary — verify with the full judgment below

t: l~< K: 'jilt..,) o ^- THE HIGH COURT OF JUDICATURE AT BILASPUR (CHHATTISGARHS I. T. A. No.4/-T OF 2004 APPELLANT ../'" ^ Commissioner, Income Tax, Raipur (Chhattisgarh) VE R S US RESPONDENT :-\.<-- ''M/s Chhattisgarh Iron &, Steel Works, 1-A, Light Industrial ^-'^""~ r,<^...c>¥-''T'' Area, Nandini Road, Bhilai, B.^O''""Y^|I'''.^<;^^A.. District Durg [Chhattisgarh] •.~,t"^ ^V l'/l / "'7/ -'-•'* pies^n^' r\s.--" da^"id APPEAL UNDER SECTION 260A OF INCOME TAX ACT 1961

/-\f- I? '&l'd-O HIGH COURT QF CHHATTISGARH AT BILASPUR /'' D.B. HON'BLE SHRI DHIRENORAJVIISHRA, & HON'BLE SHRI R.N. CHANDRAKAR, JJ I.T.R.No.17of2002 I.T.R.No.10of2002 I.T.R.No.11of2002 I.T.A.No.17of2002 I.T.A.No.19of2002 I.T.A.No.20of2002- I.T.A.No.21 of 2002 Appellant Commissioner of Income Tax, Jabalpur. Versus Respondent Shri DR Bansal, Bhilai. Appellant Commissioner of Income Tax, Jabalpur. Versus Respondent Shri VK Bansal, Bhilai Appellant CommissionerofWealth Tax, Jabalpur. Versus Respondent Smt. CR Bansal, Bhilai. Appellant Commissioner of Income Tax, Raipur Versus Respondent KK Bansal, Bhilai, Dist, Durg (CG) Appellant Commissioner of Income Tax, Raipur (CG). Versus Respondent VK Bansal, Bhilai, Dist. Durg

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 132

All 14,286 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →