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Facts
The revenue filed appeals against multiple orders of the CIT(A) for assessment years 2015-16 to 2021-22. The CIT-DR sought an adjournment due to rotational duty and personal involvement in some of the appeal orders, which the Tribunal rejected, though accepting his recusal. The CIT(A) had set aside additions by applying the 'no incriminating material' principle, based on the Supreme Court's decision in Abhishar Buildwell Pvt. Ltd., despite a search operation revealing substantial incriminating evidence.
Held
The Tribunal accepted the CIT-DR's recusal but rejected the adjournment request, disposing of the matters on merits ex-parte. It held that the CIT(A) erred in applying the Abhishar Buildwell principle as incriminating material, including bogus audit statements and non-existent company premises, was found during the search. Consequently, the Tribunal reversed the CIT(A)'s orders and remanded the issues back to the CIT(A) for fresh adjudication on merits.
Key Issues
Whether an adjournment sought by the CIT-DR on administrative grounds and personal involvement should be granted. Whether the CIT(A) correctly applied the 'no incriminating material' principle when substantial incriminating evidence was found during a search.
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN, JM & SHRI RATNESH NANDAN SAHAY, AM
O R D E R Per Bench : These are the appeals filed by the revenue against the separate orders passed by the ld. CIT(A), Patna-3, all dated 27.02.2024, for the assessment years 2015-2016, 2016-2017, 2017-2018, 2018-2019, 2019- 2020, 2020-2021 & 2021-2022, respectively. 2. None for the assessee. The ld. CIT-DR also sought adjournment in these cases on the following grounds :-
3. The number of cases posted during the week is nearly 250, out of the same, on daily basis, nearly in 72 to 75% of the cases, adjournments are being sought. As the Bench was constituted and the same was also intimated much in advance and the adjournment has been sought in the last minute, therefore, the adjournment applications are being rejected.
It may also be worthwhile to mention here that another reason given by the ld. CIT-Departmental Representative for adjournment is that in some of the appeals, orders have been passed by the office of the impugned CIT- DR personally. Here, it is to be mentioned that in respect of the orders of the ld. CIT(A), which have been challenged by the revenue, it can be said that it would be difficult for the ld. CIT-Departmental Representative to defend such orders, in so far as he would be arguing against his own orders. But in such cases, where the orders have been passed against the assessee and the assessee is in appeal, we find no reason as to why the ld. CIT-DR would not be able to defend his own orders. In any case orders have been issued against the assessee. When this was put to the ld. CIT- DR, it was a submission that should the Tribunal pass an order reversing the order of ld. CIT(A), he could be questioned under administrative provisions. This does not stand to be a reason, in so far as the appeal provisions have been provided by the statute. It is human to err. If there is no order passed by the Assessing Officer, then obviously post of CIT(A) is required and if there is no order of ld. CIT(A), there is no requirement of the Tribunal so on and so forth. Various stages of appeals are provided so that necessary proceedings are available for both the assessee and the revenue to defend their stands. Decisions taken by the appellate authority as a judicial or quasi judicial forums, are not subject to administrative reviews. Appeal provisions are provided by the statute. It would also be worthwhile to mention here that repeatedly the courts have been holding that the ld. CIT(A) are quasi judicial authorities and no administrative pressure can be put on them to decide any issues in any specific manner. We are of the view that such apprehension of the ld. CIT-DR is unfounded. Consequently, the submission of the ld. CIT-Departmental Representative was that he is recusing from the arguments. His plea is accepted. The matters are disposed off on merits on the basis of records and documents available before the Tribunal, ex-parte qua the assessee and the revenue.
We have perused the assessment order as well as the order of the ld. CIT(A). A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) has applied the decision of Hon’ble Supreme Court in the case of Abhishar Buildwell Pvt. Ltd., reported in 452 ITR 212 (SC)/149 taxmann.com 399 (SC) on the ground that there is no incriminating material. A perusal of the assessment orders in all the case shows that as a consequence of search at the official address of the assessee company, it was found that no such physical office with the office related paraphernalia was found to be existing in the premises. The assessment order also shows that upon opening the shop, it was found that certain sacks with readymade garments and curtains were kept in the shop. No books of accounts, computers or any note book etc., was found in the shop during the search. Simultaneous search has been done on the office-cum-residential premises of Chartered Accountant Sri Prasanta Kumar Roy Barman, wherein he has admitted that he has signed the audit report without examining the same. The statements of Sri Prasanta Kumar Roy Barman and others were also recorded at the search premises and they have admitted the modes operandi. The fact remains that incriminating material in the form of statement of bogus audit, non-existence of the company have also been found in the course of search. This has not been considered by the ld. CIT(A) when he has applied the principle laid down by the Hon’ble Supreme Court in the case of Abhishar Buildwell Pvt. Ltd., referred to supra. It must also be mentioned here that in regard to the issue of treating the assessee to be a commission agent earning @ 0.15% commission, the ld. CIT(A) has accepted the fact that the assessee himself shows that it is a paper company and the commission rate applied is on the higher side. In the present case, as so much evidence is available and these are incriminating in nature, we are of the view that the ld. CIT(A) has erred in applying the principle laid down by the Hon’ble Supreme Court in the case of Abhishar Buildwell, referred to supra. Consequently, as there are incriminating materials found and relied upon by the AO in his assessment order, the order of the ld. CIT(A) stands reversed. It must be mentioned here that there is no finding of the ld. CIT(A) on merits, therefore, the issues in all these appeals are restored to the file of the ld. CIT(A) for readjudication on merits of the addition.