M/S SHYAM SUNDER INDUSTRIES PVT. LTD. vs. COMMISSIONER OF INCOME TAX ROHTAK AND ANR
What did the High Court hold?
The High Court found it necessary to admit the appeal on the additional question of law regarding the Tribunal's orders containing no reasons whatsoever. As the appeal was admitted on this ground, the Court deemed it unnecessary to consider the other grounds raised at that stage. The Court noted that the Tribunal had reduced the estimated stock of returned Vanaspati Ghee to 5% without furnishing any reasons. Similarly, the Tribunal had set aside the CIT(A)'s deletion of ₹12.5 lacs by merely stating that the AO's addition was reasonable, again without providing any reasoning. Consequently, the High Court set aside the order of the Tribunal and remanded the matter back to the Tribunal for a fresh decision, with a direction to consider the material on record. The principle established is that appellate orders must provide reasons for their conclusions.
What were the facts?
These appeals by M/s Shyam Sunder (Haryana) Industries Pvt. Ltd. (the appellant) are against the order of the Income Tax Appellate Tribunal (Tribunal) which modified the orders of the Commissioner of Income Tax (Appeals) (CIT(A)). The appeals pertain to assessment years 1999-2000 and 2000-01. The Assessing Officer (AO) had made additions to the appellant's income, including ₹12,50,000/- for Uchanti sales and ₹19,00,000/- on account of stock of Vanaspati Ghee returned as suppressed sales. The CIT(A) deleted the addition for Uchanti sales and estimated the returned Vanaspati Ghee stock at 20% of the alleged returned amount, considering previous years' figures. The Tribunal, however, reduced this to 5% without providing reasons and also set aside the CIT(A)'s deletion of ₹12.5 lacs, stating the AO's addition was reasonable, again without furnishing reasons.
What were the issues?
The High Court had to decide the following substantial questions of law: 1. Whether the principle of natural justice was violated, rendering the impugned orders unsustainable. 2. Whether the authorities below acted unsustainably by assuming a 20% figure despite acknowledging sales returns. 3. Whether the authorities exceeded their jurisdiction by rejecting seized books of accounts. 4. Whether the Tribunal erred in concluding undisclosed purchases without proof. 5. Whether the impugned orders were sustainable in light of Section 158B of the Act. Additionally, the Court permitted the appellant to raise a further question: 6. Whether the Tribunal's orders are liable to be set aside for containing no reasons whatsoever. Assessee's Contentions: The appellant argued that natural justice was violated, the assumption of a 20% figure was unsustainable, seized books were wrongly rejected, there was no proof of undisclosed purchases, and the orders violated Section 158B. The appellant also contended that the Tribunal's orders lacked reasons. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.
Which sections of the Income-tax Act were involved?
Section 158B
AI-generated summary — verify with the full judgment below
ITA No.148 of 2013 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.148 of 2013 (O&M) Date of decision:- 19.03.2015 M/s Shyam Sunder (Haryana) Industries Pvt. Ltd. Hisar ...Appellant Versus CIT Rohtak and another ...Respondents A N D ITA No.149 of 2013 (O&M) M/s Shyam Sunder (Haryana) Industries Pvt. Ltd. Hisar ...Appellant Versus CIT Rohtak and another ...Respondents CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE G.S. SANDHAWALIA Present: Mr. Akshay Bhan, Sr.Advocate with Mr. Alok Mittal, Advocate for the appellant. S.J. VAZIFDAR, A.C.J. (ORAL) CM No.13331-CII of 2013 CM is allowed. For the reasons mentioned in the application, delay of 27 days in refiling the appeal is condoned. ITA No.148 of 2013 1. These appeals are filed against the order of the Income Tax Appellate Tribunal modifying the orders of the Commissioner of Income MEENU KUMARI 2015.03.30 13:39 I attest to the accuracy and authenticity of this document High Court, Chandigarh
ITA No.148 of 2013 -2- Tax (Appeals) (for short `CIT' (Appeals). The appeals arise out of the common order of the Tribunal and are disposed of by this common order and judgment. The appeals pertain to the assessment years 1999-2000 and 2000-01 respectively. 2. The appellant contends that the following substantial questions of law arise for determination of this Court: (i) Whether in facts and circumstances of the case, the principle of natural justice has been violated and the impugned orders are therefore legally unsustainable in the eyes of law? (ii) Whether in fact and circumstances of the case, the action of the ld. Authorities below in assuming the figure of 20% despite coming to the conclusion that there have been sales returns is legally unsustainable in the eyes of law? (iii) Whether in the facts and circumstances of the present case, the ld. Authorities exceeded their jurisdiction in rejecting the copy of the books of accounts produced by the appellant which were seized by the central excise department? (iv) Whether in the facts and circumstances of the present case, the ld. Tribunal erred in coming to the conclusion that there have been undisclosed purchases, without there being any proof for the same? (v) Whether in facts and circumstances of the case, the impugned orders Annexure A-1 to A-3 are legally sustainable in the eyes of law in view of the fact the impugned orders have been passed in violation of the mandate prescribed under section 158B of the Act. 3. After having gone through the order of the CIT (Appeals) and order of the Tribunal, we find it necessary to permit the appellant to raise the following further question of law: “Whether the orders of the Tribunal are liable to be set aside on the ground that they contain no reasons whatsoever.” 4. The appeal is admitted on this additional question of law. MEENU KUMARI 2015.03.30 13:39 I attest to the accuracy and authenticity of this document High Court, Chandigarh
ITA No.148 of 2013 -3- As we have admitted the appeal on this ground, it is not necessary at this stage to consider the other grounds raised in the appeal. 5. The Assessing Officer added an amount of `12,50,000/- to the appellant's income in respect of Uchanti sales and an amount of `19 lacs on account of stock of Vanaspati Ghee returned to the appellant as Suppressed Sales. 6. The CIT (Appeals) after dealing with the issues in considerable detail deleted the additional amount of `12,50,000/- in respect of Uchanti sales and estimated the stock of returned Vanaspati Ghee at 20% of the total amount allegedly returned. In this regard, the CIT (Appeals) for instance took into consideration the figures of the previous years. 7. The Tribunal, however, reduced this to 5% but without furnishing any reasons for the same. Similarly, the Tribunal has set aside the order of the CIT(Appeals) deleting the amount of `12.5 lacs as undisclosed investment by merely stating that in its view the addition by the Assessing Officer was reasonable. 7. In these circumstances, the order of the Tribunal is set aside. The matter is remanded to the Tribunal for fresh decision. Needless to say that the Tribunal will consider the material on record. (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (G.S. SANDHAWALIA) JUDGE 19.03.2015 Meenu MEENU KUMARI 2015.03.30 13:39 I attest to the accuracy and authenticity of this document High Court, Chandigarh
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