Pr. Commissioner Of Income Tax (Central), vs. M/S Tirupati Buildcon Pvt. Ltd.,

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SMT. JUSTICE ANURADHA SHUKLA ON THE 24th OF JANUARY, 2025 INCOME TAX APPEAL No. 236 of 2024 PR. COMMISSIONER OF INCOME TAX (CENTRAL), Versus M/S TIRUPATI BUILDCON PVT. LTD., Appearance: Shri Siddharth Sharma - learned Senior Standing Counsel for the appellant. Shri Abhijeet A. Awasthi - learned counsel for the respondent. ORDER Per: Justice Sushrut Arvind Dharmadhikari Heard on I.A. No. 634/2025, which is an application for ignoring the defaults pointed out by the Office. On due consideration, I.A. No. 634/2025 stands allowed and defaults pointed out by the Office are hereby ignored. Also heard on I.A. No. 636/2025, which is an application filed under Section 5 of the Limitation Act for condonation of 11 days delay in filing the appeal. For the reasons mentioned in the application, I.A. No. 636/2025 stands allowed and delay of 11 days in filing the instant appeal is hereby condoned. Further heard on admission. Instant appeal is filed by the appellant-Revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961') being aggrieved by the order dated 28/06/2024 passed by the Income Tax Appellate 1 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

Tribunal (ITAT), Jabalpur in ITA No. 22/JAB/2018 for the Assessment Year 2015-2016. 2. The following substantial question of law has been proposed in this appeal : "(1) Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal: was justified in deleting the addition of Rs.1,84,58,000/-, made on account of illegal payments made to government functionaries: (a) That, completely ignoring the plethora of evidence and aspects quoted in detail in the assessment order, including seized incriminating documents available with department giving date wise illegal payments to government functionaries; the fact that Shri Govind Prasad Pandey senior employee (Project Director) of the assessee having admitted in his statement recorded under Section 132(4) of the I.T. Act of cash payment on behalf of the assessee to the government functionaries; the AO has brought the corroborative evidence on records in terms correlation between the cash withdrawal from assessees bank account and such illegal payment dates, the detailed test of human probability applied by the AO ? (b) without testing the matter on the touch stone of 'Human Probability' and to check if the apparent was real on the basis of the ratio laid down by the Hon'ble Supreme Court in the case of Sumati Dayal 214 ITR 801 (SC)? 2. Whether on the facts aridin the circumstances of the case andin law, the Appellate Tribunal was justified in deleting theaddition of Rs.1,73,63,660 /- made on account of unaccountedreceipts from one Shri Ashok ‘Singh in view of incriminatingseized documents A-1/ LPS-4 / Page-21 which is admittedly inthe handwriting of the ‘key person Shri Padam Singhaniahimself and his. ‘detailed ‘revealing admission statementrecorded ‘u/s 132(4), on the ground that Shri Singhania hasretracted and the RTI reply from the. government departmentdoes not indicate any contract given to the said Ashok Singh,without appreciating that: (a) the RTI reply does not contradict the stand of the AO that Shri Ashok Singh is a subcontractor, and hencenot reported in RTI reply of the governmentDepartment, and the Hon’ble ITAT being the final factfinding authority did not give a finding on this issuenor caused .any inquiry to be carried out on thisaspect? (b) testing the so-called retraction to the dictum of lawpronounced in case of Banna Lal Jat Construction (P)Ltd vs ACIT 106 Taxmann 128(SC) and in ignoring that the statement recorded u/s 132(4) of the act has evidentiary value and the burden lays on the personwho made the statement, to. provide a reasonedexplanation’ for retracting from the 2 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

statement, specifically, when he himself declared that thestatement is made in sound state of mind and without coercion? 3. Whether on the facts and in the circumstances of the case andin law, the Appellate Tribunal was right in deleting theaddition ofRs.4,14,08,000 /- made on account of difference inwork in progress on the ground that the assessee hasretracted, without: (a)appreciating the fact that the assessee could not give anyexplanation and ‘surrendered the difference amount ofRs.4,14,08,000/- in the course of statement recorded u/s132(4) of the IT Act? (b) appreciating that the said .‘retraction’ was invalid andopportunisticas evidenced by the request for telescopingthe surrender against the already surrendered amount of Rs. 9 crores if the AO disagreed with retraction, and the ITAT failed to note that opportunism from ‘the fact that the assessee has not surrendered any amount in the ITRs filed in response to notice u/s 153A (as seen from page 2 of Assessment order)? (c) without prejudice to the above, without testing the so-called retraction to the test of “the dictum of law pronounced in case of Banna lal Jat Construction (P) Ltd vs ACIT 106 Taxmann 128(SC) and in ignoring thatthe | statement recorded u/s 132(4) of the act hasevidentiary value and the burden lays on the person who made the statement, to provide a reasoned explanationfor retracting from the statement, specifically, when hehimself declared that the statement is made in soundstate of mind arid without coercion? 4. Whether on the facts and circumstances of the case and in law, the findings given and decision made by ITAT suffers fromperversity on facts and law asit failed to allude. To relevant facts,misread the evidence and its probative value and the legal position, which itself gives rise to question of law in view of ratio of decisions in several cases including in the case of Sudarshan Silk and Sarees 300 ITR 205 (SC)? AND/OR Any other question of law that may arise during the course of hearing based on the relevant law in view of the factual backdrop in the instant matter?" 3. Brief facts of the case are that the ITAT decided the appeals ITA No.82/JAB/2019 for A.Y. 2007-08, IT(SS)A Nos. 5 to 10/JAB/2018 for AY 2009- 10 to 2014-15, ITA No. 22/JAB/2018 for A.Y 2015-16 in the impugned composite order. The tax effects in the appeals for A.Y. 2007-08, 2010-11 and 2014-15 are below the monetary limit i.e. Rs.2,00,00,000/- as prescribed in CBDT's Circular No. 9/2024 dated 17/09/2024, therefore, the issues do not fall in 3 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

any of the exceptions as laid down in CBDT Circular No.5/2024 dated 15/03/2024 for filing of appeal before the High Court. A search and seizure operation under Section 132(1) of the Act of 1961 was carried out in the case of Singhania Group, Shahdol (M.P.) on 16/10/2014. The search action under Section 132 of the Act of 1961 was executed on 27 premises pertaining to Singhania Group Shahdol and M/s Shobha Mineral, Jabalpur. The assessee was one of the persons of Singhania Group. The assessee, Tirupati-Build-Con Pvt. Ltd. was engaged in various road development projects as the main contractor and sub-contractor at various sites in M.P. and Chattisgarh. The administrative office cum business premises of the Company located at Opp. Railway Station, Burhar, District Shahdol and registered Office of the Company located at 50, Western Street Kolkata were also covered under Section 132 of the Act of 1961. On 23/12/2016, consolidated assessment orders for the Assessment Years 2009-2010 to 2015-2016 were issued under Section 153A read with Section 143(3) of the Act of 1961 and the order for Assessment Year 2015-2016 was issued under Section 143(3) of the Act of 1961. Thereafter, the respondent preferred an appeal against the aforementioned assessment order before the learned CIT(A), wherein the learned CIT(A) passed its order dated 23/11/2017. Being aggrieved by the aforesaid order, learned Revenue preferred an appeal before the Income Tax Appellate Tribunal, wherein learned CIT(A) passed impugned order dated 28/06/2024, whereby order dated 23/11/2017 passed by AO got affirmed. Feeling aggrieved by the same, present appeal has been filed on the substantial questions of law, which have been enumerated in the preceding paragraphs. 4. Learned counsel for the appellant contended that the learned ITAT has erred in allowing the appeal filed by the assessee-company, therefore, on the aforesaid 4 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

substantial questions of law, this appeal is fit to be entertained. 5. Per contra, learned counsel for the respondent/assessee vehemently opposed the prayer and submitted that the learned ITAT has not committed any error so as to admit this appeal. He further contended that present ITA is based merely on questions of facts and on this ground also present appeal is not maintainable. No question of law muchless any substantial question of law is involved in the appeal, therefore, same deserves to be dismissed. 6. Heard learned counsel for the parties and perused the substantial questions of law. 7. Before dealing with the aforesaid controversy, it would be expedient to refer to Section 260-A of the Act of 1961. The provisions, relevant for our purpose, read thus: "260-A. Appeal to High Court - (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. (2) The Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commission or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub- section shall be (a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner; (b) xxx (c) in the form of a memorandum of appeal precisely stating therein 5 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

the substantial question of law involved. (2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2) if it is satisfied that there was sufficient cause for not filing the samewithin that period. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question : Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question,(5) The High Court shall decide the question of law so formulated and deliver such a judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which- (a) has not been determined by the Appellate Tribunal; or (b) has been wrongly determined by the Appellate Tribunal, by reasons of a decision on such question of law as is referred to in sub- Section (1). (7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section." 8. From a bare reading of the Section, it is apparent that an appeal to the High Court from a decision of the Tribunal lies only when a substantial question of law 6 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

is involved, and where the High Court comes to the conclusion that a substantial question of law arises from the said order, it is mandatory that such question(s) must be formulated. The expression "substantial question of law" is not defined in the Act. Nevertheless, it has acquired a definite connotation through various judicial pronouncements. 9. While explaining the import of the said expression, the Apex Court in case of Sir Chunilal V. Mehta & Sons, Ltd. Vs. Century Spinning and Manufacturing Co. Ltd., AIR 1962 SC 1314, observed that: "6. The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest Court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law." 10. Similarly, in Santosh Hazari Vs. Purushottam Tiwari, (2001) 3 SCC 179 it was observed that: "A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be "substantial" a question of law must be debatable, not previously settled by law of the land or a binding precedent, AIR 1962 SC 1314 (2001) 3 SCC 179 and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law "involving in the case" there must be 7 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis." 11. In Hero Vinoth (Minor) Vs. Seshamma, (2006) 5 SCC 545 , the Apex Court has observed that: "The general rule is that High Court will not interfere with the concurrent findings of the courts below. But it is not an absolute rule. Some of the wellrecognised exceptions are where (i) the courts below have ignored material evidence or acted on no evidence; (ii) the courts have drawn wrong inferences from proved facts by applying the law erroneously; or (iii) the courts have wrongly cast the burden of proof. When we refer to "decision based on no evidence", it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding." 12. A finding of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. (See : Madan Lal Vs. Mst. Gopi & Anr. (1980) 4 SCC 255; Narendra Gopal Vidyarthi Vs. Rajat Vidyarthi, (2009) 3 SCC 287; Commissioner of 8 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

Customs (Preventive) Vs. Vijay Dasharath Patel (2007) 4 SCC 118; Metroark Ltd. Vs. Commissioner of Central Excise, Calcutta (2004) 12 SCC 505; West Bengal Electricity Regulatory Commission Vs. CESC Ltd. (2002) 8 SCC 715). 13. The Apex Court in case of K.Ravindranathan Nair vs. CIT, (2001) 1 SCC 135 has observed as under : "The High Court overlooked the cardinal principle that it is the Tribunal which is the final fact finding authority. A decision on fact of the Tribunal can be gone into by the High Court only if a question has been referred to it which says that the finding of the Tribunal on facts is perverse, in the sense that it is such as could not reasonably have been arrived at on the material placed before the Tribunal. In this case, there was no such question before the High Court. Unless and until a finding of fact reached by the Tribunal is canvassed before the High Court in the manner set out above, the High Court is obliged to proceed upon the findings of fact reached by the Tribunal and to give an answer in law to the question of law that is before it." 14. When tested on the anvil of the afore-noted legal principles, we are of the opinion that in the instant case no substantial question of law arises from the order of the Tribunal as the appellant has raised all the question of facts and have disputed the fact findings of the ITAT in the garb of substantial questions of law which is not permitted by the statute itself. This Court refrains from entertaining this appeal as there is no perversity in the order passed by the ITAT since the ITAT has dealt with all the grounds raised by the appellant in the order impugned and has passed a well reasoned and speaking order taking into consideration all the material available on record. The Tribunal being a final fact finding authority, in the absence of demonstrated perversity in its finding, interference with the concurrent findings of the CIT (A) as well as the ITAT therewith by this Court is not warranted. 9 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified

(SUSHRUT ARVIND DHARMADHIKARI) JUDGE (ANURADHA SHUKLA) JUDGE 15. For the aforesaid reasons, we have no hesitation in holding that no question of law, much less any substantial question of law arises from the order of the Tribunal requiring consideration of this court. There is no merit in the appeal as making addition/deletion cannot be said to be erroneous and prejudicial to the interest of revenue. Thus, in our opinion, the present case does not involve any substantial question of law so as to meet the provisions of Section 260(A) of the Act for admitting the appeal. 16. In view of the aforesaid discussion, we do not find any merit in this appeal, which in our opinion deserves to be and is hereby dismissed in limine. skt

10 ITA-236-2024 NEUTRAL CITATION NO. 2025:MPHC-JBP:3844 Signed by: SANTOSH KUMAR TIWARI Signing time: 1/27/2025 6:10:13 PM Signature Not Verified