TMI Blog1992 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... n 3-5-1991 originally and also was numbered by the office of the Tribunal as ITA No. 1427 (Cal.) of 1991. On 9th May, 1991, the ITO (judicial) at Calcutta filed a letter with the Assistant Registrar of the Calcutta Benches of the Tribunal informing him that the appeal filed on 3-5-1991 in the assessee's case may be treated as withdrawn. The appeal was posted for hearing immediately and by order dated 31-5-1991, the Tribunal dismissed the appeal as withdrawn. The operative portion of the order of the Tribunal is as under : " The CIT vide his letter dated 9-4-1991 expressed his desire not to pursue the appeal and seeks permission to withdraw the same. Permission is granted and the appeal is dismissed as not pressed and withdrawn. " The reference in the order to the letter of the CIT dated 9-4-1991 is a mistake and the correct date should be 9-5-1991. 3. Thereafter, the department again preferred an appeal to the Tribunal on 24-6-1991 in the assessee's case against order of the CIT(A) (impugned order) and raised the same ground which was raised earlier. The appeal papers were accompanied by a letter dated 24-6-1991 signed by the Assistant Commissioner of Income-tax, Investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking as CIT., WB-VI, Calcutta at 54, Rafi Ahmed Kidwai Road, Calcutta-16 solemnly affirm and declare as under :-- 1. That the order of the Ld. CIT(A)-VIII Calcutta dated 7-1-1991 in the above case in appeal No. 254/(A)-VIII/90-91/5(2) was received in my office on 5-3-1991 and as such appeal before the ITAT was to be filed by 4-5-1991 against the order. 2. That I was out of station for attending Conference of Chief Commissioners and Commissioners of Income-tax in New Delhi from 1-5-1991 to 4-5-1991 (5-5-1991 was Sunday). 3. That the original appeal in this case was filed by mistake on 3-5-1991 vide No. JS/1246/CT/4A/167/91-92 without my authorisation. On detection of the mistake the appeal was withdrawn on 9-5-1991 vide letter No. JS/1429/CT/4A/167/91-92. 4. That I authorised the appeal in question on 8-5-1991 on 9-5-1991 enquired about the fact of the appeal from the Judicial Wing and it was found that further decision in this matter could not be taken up due to misplacement of the relevant folder but ultimately it was found that the file was lying with the Authorised Representative in connection with the withdrawal matter. 5. That the file was received in the Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be true copy by the Head Clerk, Judicial Section, Scrutiny Wing, Calcutta of the office of the CIT, WB-VI, Calcutta. The original was called for by us and was also produced by the Ld. Departmental Representative. We found that the original authorisation also had not been signed by the CIT which bears out his averment in paragraph 3 of his affidavit. When the original appeal has not been properly authorised as required by section 253(2) of the Income-tax Act. It is no appeal in the eyes of law and even the order passed by the Tribunal on the same in ITA No. 1427 of 1991 dated 31-5-1991 is a nullity in the eyes of law. It should be remembered that authorisation under section 253(2) of the Act, the person who has the right to appeal is the Commissioner of Income-tax and not the Income-tax Officer. The Income-tax Officer when he filed the appeal under the direction of the CIT performs only a ministerial function (Please see the decision of the Supreme Court in CIT v. Anil Kumar Roy Chowdhury [1967] 66 ITR 367, if the CIT is the person who is to be treated as an appellant for all practical purposes as directed by the Supreme Court, the appeal filed by the department on 3-5-1991 canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the last day of the earlier accounting year. Therefore, they were the opening balances for the accounting year in question. The ITO found that there were no such firms by the name of M/s. Mira Cloth Stores and M/s. Tere Tex at the addresses given above. He, therefore, concluded that the liabilities were not genuine. Because, the liabilities were treated by him as non-genuine, he took the view that it is a case of cessation of the liability which would justify the resort to section 41(1). He also noticed from the relevant ledger accounts which were seized by the department that the liabilities even though paid of during the relevant year of account, such payments were only a make-believe affair. In addition to the amount of Rs. 5,66,895 in the account of M/s. Mira Cloth Stores, ITO also noticed from the ledger account of the said firm that there was a credit of Rs. 5,53,628. The explanation offered by the assessee was that the cheque issued on 31-8-1985 to the said firm by the assessee-company was returned without being honoured and the credit entry represented a reversal entry to take note of the fact that the cheque had been returned without being honoured. This explanation w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer to examine the same. We are unable to agree. The Assessing Officer himself has stated that he has examined the ledger accounts appearing at ledger folio nos. 44, 45 and 47 relating to the above three concerns and noticed the credit balances. When such is the position and the original ledger account marked NV-8 itself is lying with the ITO having been seized by the department, we are unable to appreciate how the production of the copies of the ledger a/c before the CIT(A) can be stated to be filing of fresh evidence. The ledger accounts, copies of which were filed before us, also did not show the addresses of three firms. The Ld. counsel for the assessee submitted that the addresses given against the three firms in the assessment order were not furnished by the assessee. The correct addresses were found in the bank account of the three firms which were furnished by the assessee before the CIT(A). However, even assuming that the production of the bank accounts of M/s. Mira Cloth Stores and M/s. Tere Tex showing the correct addresses can be taken as fresh evidence, it is not clear as to how the department can be stated to be agrieved by this. It is to be remembered that the ITO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reasoning or findings of the ITO, the assessment cannot be sustained, it is still necessary to find fault with the procedure adopted by the appellate authority and restore the issue to him with directions to follow the procedure prescribed by the said rule. It seems to us that such a futile or meaningless exercise reducing the exalted position enjoyed by the rule to an empty formality or ritual cannot be adopted by shutting our minds to the question whether the failure of the first appellate authority to afford an opportunity to the ITO while admitting fresh evidence has caused any damage or prejudice to the case of the department in real terms or whether the grievance is merely imaginary without any substance. In the present case, as seen earlier, the ITO has ensured that the claim for deduction of the liabilities of Rs. 20,90,829 receives full scrutiny by reopening the assessment for the assessment year 1986-87. The CIT(A) has not also relied so much on the fresh evidence in deleting the addition as on the facts that the liabilities, being considered bogus, can be disallowed on general principles themselves in the year to which they relate and further that they, having been pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
