TMI Blog1998 (2) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... come from purchase and sale of tractor and its spare parts which are mainly required by the agricultural sector. The assessee is also dealing in other implements which are relatable to agricultural operations, like cultivators, levellers, karache, drill etc. The assessment in this case was completed under section 143(3) at a total income of Rs. 2,01,001 as against the returned income of Rs. 1,94,136 vide order dated March 30, 1993. Subsequently, it appears that the Commissioner of Income-tax, Patiala has called for the record of the assessee and has issued notice under section 263 on 6/9th February, 1995, intimating to the assessee that the order passed by the Assessing Officer on March 30, 1993, was erroneous in so far as it was prejudicial to the interests of the Revenue within the meaning of section 263 because the Assessing Officer has erred in framing the assessment by allowing the benefit of the provisions of rule 6DD(j) in respect of cash payments exceeding Rs. 10,000 to the tune of Rs.43,27,009 as these payments were disallowable under section 40A(3). Accordingly, the learned Commissioner of Income-tax requested the assessee to show cause why the order passed by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of rule 6DD(j). The Tribunal accordingly held that the assessment order framed by the Assessing Officer could not be held to be erroneous and prejudicial to the interest of the Revenue on the ground of its being a non-detailed and cryptic order. At the time of hearing of the reference application, Shri B. R. Kaushik, the learned Departmental Representative, submitted that no doubt the copies of bills and confirmations were filed before the Assessing Officer by the assessee, yet these were simply kept on record and no verifications were made with the books of account. According to the learned Departmental Representative, the order was passed by the Assessing Officer in a routine manner and a question of law does arise in view of the decisions of the Supreme Court in the cases of Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 and Tara Devi Aggarwal (Smt.) v. CIT [1973] 88 ITR 323. Shri Sudhir Sehgal, learned counsel for the assessee, on the other hand, submitted that the Tribunal has adjudicated the issue on the basis of facts available on record and no referable question of law arises out of the order of the Tribunal. It was submitted that in similar circumstances, no refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls were beyond the accounting year relevant to the year under consideration and the bills were also in the handwriting of one person. Apparently, the orders were passed in a routine manner, without making the necessary enquiries required in the facts and circumstances of the case and satisfaction of the Assessing Officer with reference to each transaction to give benefit under rule 6DD(j) read with Circular No. 220 (see [1977] 108 ITR (St.) 8), dated 31st May, 1977, was not there before allowing such benefit. Reference has rightly been made to the cases reported as Rampyari Devi Saroogi v. CIT [1968] 67 ITR 84 (SC) and Tara Devi Aggarwal (Smt.) v. CIT [1973] 88 ITR 323. It is also mentioned that, during reassessment proceedings, it has been established that some of the sellers were non-existent. The facts of the decisions of the Tribunal relied upon by the assessee s counsel in Jagdish Chand Gupta s case (R. A. Nos. 56 and 57 of 1996, dated July 4, 1996) ; Kewal Ram Chauhan s case (R. A. Nos. 9 and 10 of 1997, dated April 30, 1997), etc., are distinguishable. On the facts of this case, the question as suggested by the Revenue does arise and the same is referred to the High Court fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 10,000 were disallowable under section 40A(3). The assessee objected to the proposed action under section 263 and filed written submissions dated February 27, 1995. After considering these, the Commissioner passed an order setting aside the order of the Assessing Officer passed on March 30, 1993 holding the same to be erroneous in so far as it was prejudicial to the interests of the Revenue. He directed the Assessing Officer to verify the genuineness of the cash payments and record his satisfaction in respect of each transaction exceeding Rs. 10,000 as required by the Central Board of Direct Taxes Circular bearing No. 220 (see [1977] 108 ITR (St.) 8) of 31st May, 1977. Aggrieved by the order of the Commissioner of Income-tax, the assessee filed an appeal before the Tribunal and the Tribunal, after considering the facts on record and the submissions of both the parties, cancelled the order passed under section 263 restoring that of the Assessing Officer passed under section 143(3) on March 30, 1993. It would be relevant at this stage to set out para. 7 of the order of the Tribunal in the appeal as under : 7. We have considered the rival submissions and have also gone throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the report of the Deputy Commissioner of Income-tax, Patiala Range, Patiala, who forwarded the proposal submitted by the Assessing Officer under section 263 to the Commissioner of Income-tax in relation to an audit objection raised by the Revenue audit party and in furtherance to the instructions issued by the Deputy Commissioner of Income-tax (Audit) referred to in the letter of the Range Deputy Commissioner of Income-tax to the Commissioner of Income-tax. The Deputy Commissioner of Income-tax, who is the controlling officer of the Assessing Officer, has specifically stated in the forwarding letter dated September 26, 1994, which has been reproduced by us above, that the Assessing Officer has duly verified the cash payments amounting to Rs. 43,28,009 during the course of assessment proceedings and all the material facts relating to these payments were also brought on record and discussed although he has not recorded his satisfaction in the body of the assessment order before allowing benefit of rule 6DD(j). Accordingly, we are of the opinion that the assessment order framed by the Assessing Officer could not be held to be erroneous and prejudicial to the interests of the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith reference to vouchers and bills. (v) The report of the Deputy Commissioner of Income-tax, Patiala Range, Patiala who forwarded a proposal submitted by the Assessing Officer under section 263 to the Commissioner categorically stated that the Assessing Officer had duly verified the cash payments amounting to Rs. 43,28,009 during the course of assessment proceedings and all the material facts relating to these payments had been brought on record and discussed. (vi) That the order under section 263 had been passed by the Commissioner only as per the instructions of the Board in relation to the raising of major objections by the audit party although the objections raised may not be accepted by the department. As against the findings of fact recorded in paras. 7 and 8 of its order by the Tribunal at the time of deciding the appeal and which were taken note of by the learned Accountant Member in rejecting the reference application, the learned Judicial Member took a view to the contrary by holding that a question of law arose out of the order passed by the Tribunal. I may, however, at the outset mention that he has not rebutted or contradicted any of the observations recorded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had become null and void. The learned Departmental Representative before me strongly supported the view expressed by the learned Judicial Member placing reliance on numerous reported decisions whereas learned counsel for the assessee supported the view taken by the learned Accountant Member canvassing a view point to the effect that the reference application had been rightly rejected as the question was one of fact and no legal proposition arose from the order passed by the Division Bench of the Tribunal. The learned counsel for the assessee once again referred to para. 5 (pages 53-4) of the order of the learned Accountant Member inviting attention to the orders passed by the Tribunal in various cases where on identical facts and circumstances, the reference applications filed by the Department were either rejected or no reference applications were filed. The submission, in other words, was to the effect that a consistent view was required to be taken. In my opinion, the view taken by the learned Accountant Member is correct as the question was clearly one of consideration of evidence and correlating this to the facts on record in coming to the conclusion that the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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