TMI Blog2016 (5) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Hemant Gupta ) The assessee is in appeal under Section 260A of the Income-tax Act, 1961 (for short, the Act ) arising out of an order dated 31.12.2007 passed by the Income Tax Appellate Tribunal, Patna Bench, Patna (for short, the Tribunal ) in ITA No.128 (Pat)/05 relating to assessment year 1987-88. 2. The facts, in brief, are that a search was conducted in the premises of the father of the assessee on 11th February, 1988. A notice under Section 148 of the Act was issued to the assessee on 24th October, 1989. No return had been filed till then for the assessment year 1987-88. Another notice was issued on 18th of January, 1990, but the representative of the assessee replied that return can be submitted only after taking photocopy of the seized materials. The documents were supplied. A detailed questionnaire was issued on 20th February, 1991, but the assessee did not reply to this questionnaire nor filed return of the income before the assessing officer. The Assessing Officer, thereafter, proceeded to frame assessment to the best of his judgment. 3. The assessment officer took into consideration a loose sheet marked KS-19 taken in possession from the house of the fathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that presumption under Section 132(4A) of the Act can be raised only against the person whose premises were searched and the documents seized. Since the document marked as KS-19 was found from the residential portion of his father, therefore, no presumption can be raised against him. He relies upon the judgments passed by the Hon ble Supreme Court in cases of P. R. Metrani v. Commissioner of Income- Tax, [2006] 287 ITR 209(SC); and also Additional Commissioner of Income-Tax, Bombay City-I v. Miss Lata Mangeshkar, [1974] 97 ITR 696 (Bom). He relies on the judgment reported as Central Bureau of Investigation v. V.C. Shukla and others, (1998) 3 SCC 410 to contend that loose sheets of paper are not the books of account which can be relied upon to fasten any liability on the appellant. 8. On the other hand, learned counsel for the Revenue argued that in fact, the expression used by the Assessing Officer in the assessment order that the presumption u/s 132(4A) is also on the assessee is surplusage. In substance, from the reading of the entire order it is clear that it is an assessment framed under Section 147 of the Act for the reason that income of the assessee has escaped assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1922); or (d) where excessive loss or depreciation allowance has been computed. Explanation 2.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of this section. 11. A perusal of the aforesaid provision would show that if the Assessing Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Assessing Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax can be said to have escaped assessment for that year. 12. As per the facts on record, the assessee has not filed any return for the assessment year 1987-88 even after notice was served upon him nor he responded to the questionnaire. He was asked to explain the entries in loose sheets marked as KS-19, but did not respond in respect of the relevant assessment year. However, he submitted response in the subsequent year that it was his father account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross rate of profit on sales, both by the Income-tax Officer and the Tribunal seems to be based on surmises, suspicions and conjectures. 14. In a later Constitutional Bench Judgment in the case of Union of India v. T. R. Verma, AIR 1957 SC 882, the Supreme Court held that the evidence of the respondent and his witnesses was not taken in the mode prescribed in the Evidence Act; but that Act has no application to enquiries conducted by tribunals, even though they may be judicial in character. The Court held to the following effect: 10. Now, it is no doubt true that the evidence of the respondent and his witnesses was not taken in the mode prescribed in the Evidence Act; but that Act has no application to enquiries conducted by tribunals, even though they may be judicial in character. The law requires that such tribunals should observe rules of natural justice in the conduct of the enquiry, and if they do so, their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that, which obtains in a Court of law. Stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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