TMI Blog1993 (10) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Incometax (Appeals)'s on November 11, 1987, being in the nature of additional evidence has been considered in violation of rule 29 of the Appellate Tribunal Rules, 1963 : (i) Statements of Bahadur Singh recorded on April 29, 1988, and November 22, 1989, considered in paragraphs 10 and 11 of the order. (ii) Statements of Prithvi Raj recorded on April 29, 1988, and November 22, 1989, considered in paragraph 12 of the order. (iii) Statements of Ved Pal recorded on April 29, 1988, and November 22, 1989, considered in paragraph 12 of the order. (iv) Evidence relating to savings in 1985 considered as evidence relevant for judging the genuineness of transactions in 1981-82. 2. Mistakes of fact : Paragraph 10(i) 'Regarding the crop raised, he had submitted "If there is rain, there is crop, otherwise, there is no crop". This is in direct contrast with what Mr. Varma had submitted that all the lands were very well irrigated'. The correct position, as also borne out from page 13 of the assessment order is that Bahadur Singh had 254 K of Nahriland, i.e., irrigated and 14 K-24 M of Barani land. The statement of this person recorded on December 17, 1985, indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to the assessee's averments under the head "Mistakes of law" should also be closely looked into and, therefore, reproduced as follows : "Alleged mistakes of law : 1. It is now sought to point out that there were certain apparent mistakes in the order of the Tribunal passed in I. T. A. No. 51/(ASR) of 1988, dated September 27, 1990. (i) The first error which is alleged to have crept in is regarding the violation of rule 29 of the Appellate Tribunal Rules, 1963. More particularly, it has been stated that statements of Shri Bahadur Singh recorded on April 29, 1988, and November 22, 1989, taken note of in paragraphs 10 and 11 of the Tribunal's order were in violation of rule 29 of the Income-tax Appellate Tribunal Rules. After perusing the Tribunal's order, it is abundantly clear and it can be stated with authority that there is no mistake apparent from the record in this regard. In fact, both the statements were cited by the assessee in his favour and not by the Revenue. In fact, the assessee wanted to rely on the statements to prove the cash credits. Therefore, in the circumstances, if at all, the Revenue could have objected to this additional evidence. However, neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, on July 20, 1990, and the last paragraph of the covering letter stating as follows : "Certified that all the pages included in the paper book are on the record of the Assessing Officer/Commissioner of Income-tax (Appeals). The pages at serial Nos. 50, 51, 56, 57, 62, 63, 92, 115 are, however, copies of letters and statements recorded by the Assessing Officer after the assessment order and the order of the Commissioner of Income-tax (Appeals). " The pages at serial Nos. 50, 51, 56, 57, 62, 63, 92, 115 were the evidence and statements which, as a fact, have been recorded after the Commissioner of Income-tax (Appeals) had passed his order. Since I was a party to the order of the Tribunal dated September 27, 1990, it can be stated as a fact that the statements recorded after the Commissioner of Income-tax (Appeals)'s order were not even referred to by the assessee or his representative. A short argument was raised towards the close of the hearing that the said papers had been filed by way of abundant caution to show that the Revenue was not sure of its case and was making enquiries even after the first appellate authority's order but since the learned Departmental Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and Rajinder also own similar areas of agricultural land. Regarding the crop raised, he had submitted 'If there is rain, there is crop, otherwise, there is no crop'. This is in direct contrast with what Mr. Verma had submitted that all the lands were very well irrigated. He had accepted that there was only a saving of Rs. 5,000 to Rs. 10,000 with him at home. Now, if his statement was to be accepted, then he must be having considerably large savings with him. The savings of Rs. 5,000 to Rs. 10,000 does not show that much of savings which first statement would take us to believe. Shri Verma has a very ingenuous explanation for this. He submitted that there was no direct question put by the Income-tax Officer about the savings. The savings referred to by the creditor was perhaps the savings of that year, and did not refer to the total past savings from the income. This explanation though, on the face of it, attractive, has to be rejected. That is because Shri Bahadur Singh had accepted that he does not deposit his money in any bank, post office or with Arhatias. If that is so, then the savings have only to be in his house. In fact, he agrees and admits so. It is in this context tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29, 1988, accepted that the loan was returned, but, later on, retracted from that statement. Here also, although Shri Prithvi Raj claimed a net saving of Rs. 30,000 per year, the savings with him were meagre. All the reasonings given in the case of Bahadur Singh would be equally applicable in his case also. In the case of Ved Pal, although he claims a heavy amount as savings, he agrees that he does not deposit the money anywhere and keeps them in his house. Therefore, all past savings must be with him unless they were invested anywhere else. But still he says 'I do not have any cash savings at my house'. Shri Verma's explanation for this is that the current year's crop had not yet been sold and that was clear when he says that they were still to be sold by him. This explanation of Shri Verma would, no doubt, cover the current year, but what about the prior years. According to his own statement, the savings from the prior years must be in the residence, yet he admits that there was none. So in this case also, the Department was justified in treating the loan as bogus. 13. We next take up the case of Dev Pal. He is also from village Chautala and he had given a loan of Rs. 1 lakh i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that some facts had not been taken into consideration. On January 30, 1986, the Tribunal accepted this application. The Tribunal noted that this was an application under section 254(2) of the Act and, after dealing with the merits of the application, it came to the conclusion that there was a mistake in the Tribunal's order and, as such, it required to be recalled. Being aggrieved, the assessee filed an application under section 256(1) of the Act requiring the Tribunal to state the case and refer certain questions of law to the Delhi High Court. By order dated September 17, 1986, the Tribunal came to the conclusion that no question of law arose from its order because the said questions were only questions of fact. Thereafter, the Commissioner of Income-tax submitted a petition under section 256(2) of the Act before the High Court. For the assessee, the petition was resisted and it was submitted that the miscellaneous order dated January 30, 1986, of the Tribunal in relation to which the reference application had been submitted was not an order passed under the provisions of the Act and, therefore, an application under section 256(2) of the Act was not maintainable. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the case. With respect, we see no warrant for this in legal jurisprudence. The appellate court can hear a case and decide it on the merits, once for all, and cannot keep on rehearing the same appeal over and over again. Full effect has to be given to the provisions of section 254(4) which specifically provides that a decision of the Tribunal passed in appeal is final. This decision is final not only for the assessee but also final as far as the Tribunal itself is concerned. We have, therefore, no hesitation in coming to the conclusion that the Tribunal can only exercise its jurisdiction under section 254 of the Act in the manner indicated above and, de hors the provisions in the Act, it has no jurisdiction to recall its order on merits. '' In the present case, we are with the Senior Departmental Representative, that the Tribunal cannot upset its own order and give relief on various grounds sought by the assessee, but it is a case where, on the accepted facts, it must be held that the Tribunal, by oversight, relied on the evidence and statements which had been brought on the department records after the assessment and the Commissioner of Income-tax (Appeals)'s orders and since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmissible under section 11 of the Act. Since the income of the two donor-trusts was exempt under section 11, section 12(2) of the Act was to apply to the assessment of the assessee-trust. Accordingly, the Revenue pressing the said miscellaneous application prayed that the order of the Tribunal be cancelled or suitably modified in the light of the facts gathered from the assessment orders of the donor-trusts. At the time of hearing of the miscellaneous application before the Tribunal, it was argued in the said case that the Appellate Assistant Commissioner had decided the issue on an erroneous assumption of facts which the Tribunal confirmed. Since the correct facts had been brought on record, the Tribunal should rehear the appeal. The Tribunal, however, dismissed the said miscellaneous application. The High Court held on the facts that it was an inherent duty of the Tribunal to rehear the matter accepting the Revenue's miscellaneous application. The said case is a converse of the present one and, therefore, we see no justification for the Revenue's contention that the assessee is not entitled to any relief. After giving our thoughtful moments, therefore, we refrain from reviewing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 9,49,000 representing the cash credits introduced by the assessee in the names of 12 different persons. The application under section 254(2) filed by the assessee alleging certain mistakes of facts and law, on the basis of which the Tribunal's order is proposed to be recalled, have been reproduced in the order of my learned brother, Judicial Member, and I do not propose to repeat them here. The factual position in a nutshell is that the addition of Rs. 9,49,000 came to be confirmed by the Tribunal representing the cash credits in the names of 12 persons by relying on their statements recorded during the course of assessment proceedings and also statements of 3 out of 12 creditors which were once again recorded after the passing of the order by the Commissioner of Income-tax (Appeals) presumably in connection with the penalty proceedings under section 271(1)(c), which were submitted before the Tribunal in the form of a paper book by the assessee and this fact has been noted in paragraphs 5 and 6 of the order of my learned brother in M. A. No. 4/(ASR) of 1992. My learned brother is of the opinion that, since the Tribunal has relied on the additional statements of the three cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces stated as under : The assessee, a registered firm engaged in the manufacture and sale of cotton ginning machines, filed its return for the assessment year 1983-84 declaring an income of Rs. 78,460. In the course of examination of the accounts, the Income-tax Officer found certain credits in the accounts of the following persons : Rs. Rs. 1. Shri Bahadur Singh, son of Shri Shera Ram 1,00,000 2. Shri Prithvi Raj, son of Shri Shera Ram 1,00,000 3. Shri Ved Pal, son of Shri Shera Ram 1,00,000 4. Shri Dev Pal, son of Shri Basti Ram 1,00,000 5. Shri Jit Singh, son of Shri Lila Dhar 1,00,000 6. Shri Baldev Singh, son of Shri Hazoor Singh 42,200 7. Shri Gopi Ram, son of Shri Kasra Ram 1,00,000 8. Shri Mukh Ram, son of Shri Sahi Ram 1,00,000 9. Shri Gag Singh, son of Shri Basant Singh 35,000 10. Shri Basant Singh, son of Shri Hazur Singh 1,36,000 11. Shri Makhan Singh, son of Shri Basant Singh 32,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record that this money was not genuine borrowals from the alleged creditors. There was then an appeal filed before the Income-tax Appellate Tribunal raising, inter alia, the ground that when the assessee had established the identity of the creditors and the genuineness of the transaction and when the creditors had admitted of having advanced the moneys and corroborated those statements by filing affidavits and they were crossexamined on affidavits, the Income-tax Officer should not have come to a different conclusion other than accepting the assessee's version. It was also pointed out that the assessee could not be expected to know the source of the income of the creditor and also the nature of the source. The Tribunal, by its order dated September 27, 1990, dismissed the assessee's appeal and confirmed the addition. Thereafter, the assessee filed a miscellaneous application under section 254(2) seeking rectification of certain mistakes, said to have crept into the order of the Tribunal. In effect, it says that certain evidence collected after the disposal of the order, both by the Assessing Officer and the Commissioner of Income-tax, was considered by the Tribunal in arriving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objected to this additional evidence. However, neither side having objected to the user of the said statements during the course of hearing, it cannot be said now in a miscellaneous petition that any rule has been violated. (ii) Similar is the case regarding the statements of Shri Prithvi Raj, discussed in paragraph 12. (iii) Again, the same position remains in respect of the statements of Shri Ved Pal considered in paragraph 12. (iv) The said evidence regarding savings in 1985 has been correctly appreciated and it cannot be said that there is any mistake apparent from the record. '' Thereafter, the assessee filed another miscellaneous petition on January 16, 1992, raising another point as under : "1. Mistake of law : The Tribunal in paragraph No. 25 has rejected the additional ground of appeal by observing that the addition had been made under section 68 by disbelieving the creditors. However, it has escaped the notice of the Tribunal that the Assessing Officer had made the addition on this ground. As per paragraph 8 of the order of the Commissioner of Incometax (Appeals), the addition had been sustained on the ground that the assessee had introduced 'his own money in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing language: "Whether, on the facts and in the circumstances of the case, the proposed order of the Judicial Member recalling the Tribunal's order dated September 27, 1990, is justified or the opinion of the Accountant Member that in view of the Supreme Court's decision in the case of Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151, the miscellaneous application should be dismissed, is correct ?" After hearing the parties at length and after considering their long arguments, the case law relied upon and perusing the records, I am of the opinion that the opinion expressed by the learned Accountant Member deserves to be agreed with. There is an agreement between both the Members that the Tribunal had taken into consideration the statements which were recorded by the Income-tax Officer after the passing of the order by the Commissioner of Income-tax (Appeals). The order of the Commissioner of Income-tax (Appeals) was passed on November 11, 1987. The statements from these three creditors were recorded subsequently on two dates, i.e., April 29, 1988, and November 22, 1989. There is no reference to this particular aspect in the order passed by the Tribunal originally dismissin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of justice by considering these statements. When the statement was particularly referred to by the assessee in the course of arguments, the Tribunal has to give its opinion thereon when the admission and consideration of this evidence was not objected to by the Revenue and the Revenue also sought to rely upon the very same evidence. I am, therefore, unable to find any ground to hold that the order of the Tribunal was vitiated by the consideration of this evidence. The assessee is not, in my opinion, justified in making a grievance of the consideration by the Tribunal of the evidence it sought to produce before the Tribunal. Having led the Tribunal to admit this evidence and when the conclusion drawn by the Tribunal on the appreciation of that evidence was adverse to it, the assessee cannot complain that the Tribunal was not justified in considering that evidence and, therefore, its conclusion was vitiated. In the case of Omar Salay Mohamed Sait v. CIT [1959] 37 ITR 151 (SC) referred to by the learned Accountant Member in his differing order and also in the difference of opinion, the Supreme Court held (headnote) : "The Income-tax Appellate Tribunal is a fact-finding Tribunal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision is, therefore, an authority for the proposition that, if the Income-tax Officer gathers evidence after the assessment was over, it is necessary for the appellate authorities to consider that evidence also in accordance with the principles of natural justice, i.e., by affording an opportunity to the other side for explaining it and then arrive at the conclusion, but a conclusion arrived at without considering that kind of evidence collected afterwards would not be a proper conclusion in law. Applying the principle laid down by the Supreme Court in this decision, it cannot be said that the evidence collected by the Income-tax Officer, namely, the statements recorded subsequent to the order of the Commissioner of Income-tax (Appeals), cannot be said to be irrelevant and when the assessee itself made use of that evidence in support of a particular stand it took before the Tribunal, it can have no grievance if that evidence was considered and an adverse decision to it was arrived at. I am, therefore, in agreement with the view expressed by the learned Accountant Member and I am not able to support the view taken by the learned Judicial Member. It is strange that, when the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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