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2015 (7) TMI 1265 - AT - Income TaxScope of consideration under the purview of section 254(2) - suppressed sales on account of settlement petition - Held that:- As before us while arguing the Miscellaneous Application, the Ld. Special AR has vehemently stressed that the Tribunal has erred in not extrapolating the sales for the entire year based on the evidence i.e. the petition before the Settlement Commission and hence, there is an error in assumption of facts and mistake of law in this regard. We find no merit in the said arguments raised by the Ld. Special AR before us during the course of hearing of Miscellaneous Application and the same is beyond the scope of consideration under the purview of section 254(2) of the Act. As referred to by us in the paras hereinabove, such a plea could have been raised by the Department during the appellate proceedings before the Tribunal for the first time. However, in the absence of such plea being raised during the course of hearing of the main appeal, raising of such an argument before the Tribunal vide Miscellaneous Application is sheer waste of judicial time and process of law. This is a fit case for levy of costs against the Department for raising frivolous and vexatious arguments and pleas about estimation of income, which were never raised during the course of hearing of the appeal before the Tribunal Admittedly, during the course of search and seizure operation on certain brokers, evidences of clandestine removal of material without payment of Excise duty, was found against the assessee. However, no search and seizure operation was carried out against the assessee, but the assessee claims that in order to buy peace of mind, it had declared the said amount by way of petition before the Settlement Commission. The said offer made by the assessee was accepted in toto. It may be noted that the Excise authorities have the power to re-visit the offer made by the assessee, in case, any adverse material is available against the person making the offer. It may also be noted that the Settlement accepted in the hands of the assessee is for the financial year and is not restricted to the number of days for which it has offered. In other words, once a person makes a settlement petition for a particular year on account of the evidence found for part of the period and once the petition is accepted in the hands of the assessee, no further addition can be made on account of alleged clandestine removal of goods or suppressed sales, in the absence of evidence for the balance period. Even on merits, the Revenue has no case against the assessee. The reliance placed upon by the Ld. Special AR on the ratio laid down in assessee’s own case relating to assessment year 2006-07 is misplaced as the addition in the hands of the assessee in that year was made on account of search and seizure operations carried out by the Income-tax Department, wherein sales outside books were found for few days. However, no independent investigation / inquiry by the Income-tax Department has been made before completing assessment proceedings against the assessee. The assessee had offered the additional income on account of such clandestine removal of goods before the Assessing Officer for assessment year 2007-08 and the same was the reason for reopening the assessment under section 148 of the Act. Once a particular fact was available with AO, which was taken note of and considered by him during the assessment proceedings, but the addition having been made on only on the issue of erratic consumption of electricity, which is the basis of order passed by CCE, Aurangabad, who was also in knowledge of the clandestine removal of material and the investigation carried out by the DGCEI and the petition before the Settlement Commission, even the Third Member of CESTAT was aware of all these proceedings, but since the settlement petition filed by the assessee had been accepted in toto by the Settlement Commission, no further addition could be made in the hands of the assessee on this ground, in the absence of any inquiry or investigation by the Assessing Officer. As pointed out by us in the paras hereinabove, the Ld. Special AR has failed to establish its case of the Tribunal in not considering any material and in the absence of the same, no power can be exercised under section 254(2) of the Act. In the entirety of the above said facts and circumstances, we hold that the Miscellaneous Application moved by the Revenue is not maintainable and the same is dismissed. - Decided against revenue
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