TMI Blog2004 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... hether such explanation was filed before the Assessing Officer before the assessment was made – matter remanded – appeal of assessee is allowed - - - - - Dated:- 30-9-2004 - Judge(s) : D. K. SETH., TAPAN KUMAR DUTT. JUDGMENT D.K. Seth J. The question: The question of law that has been raised by Mr. Khaitan in this appeal is that despite the explanation in terms of section 68 furnished by disclosing the list of subscribers along with the particulars of the permanent income-tax account number wherever available and the numbers of shares allotted and the face value of the shares, the Assessing Officer added the share capital as undisclosed income of the assessee without arriving at any conclusion as to the question whether the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent's contention: Mr. Dutt, on the other hand, contends that no explanation was ever submitted before the Assessing Officer. As such there was no scope for infraction of the principle laid down in those two decisions on which he relied to contend that the power of the Assessing Officer under section 68 is absolute where no explanation is submitted. In the present case, no explanation having been submitted there was no infraction of the principle laid down in the said decision and as such the appeal should be dismissed. Irregularities: Technicalities: Whether should prevail: After having heard learned counsel for the parties, it appears that the learned Tribunal had dismissed the appeal on twofold reasons; first, that the paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation, it is incumbent upon the Assessing Officer to examine the explanation and arrive at a conclusion as to whether the explanation was satisfactory. The conclusion arrived at by the Assessing Officer is to be communicated to the assessee if the explanation is not satisfactory. If thereupon the assessee submits any comments or furnishes further information, in that event, the Assessing Officer has to examine the same and arrive at his own conclusion. The inbuilt safeguard provided in section 68 cannot be ignored by the Assessing Officer. The Assessing Officer can add the share capital as an undisclosed income if no explanation is offered by the assessee. But since the explanation was offered, it was incumbent on the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CIT [1978] 112 ITR 405. In that case the court had held that ordinarily an appeal should be decided by the Appellate Tribunal on the materials before it. This rule is, however, subject to a further rule, namely, that if the Tribunal is unable to decide the appeal on the materials before it or if the relevant facts for deciding the appeal are not before it, it may adopt any one of the three alternative courses which are open to it in order to do substantial justice between the parties. It may admit further evidence and decide the appeal. Or it may keep the appeal pending before it and direct any one of the authorities below to ascertain further facts, which are essential for the purpose of determination of the appeal and then on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Appellate Tribunal and the Commissioner of Income-tax (Appeals) shall stand affirmed. In case it is found that such explanation was furnished to the Assessing Officer before the assessment was made by the Assessing Officer, in that event, the matter should be remitted by the learned Tribunal to the Assessing Officer for examining the said explanation and arriving at a conclusion after giving opportunity to the assessee in terms of the principles laid down in Hindusthan Tea Trading Co. Ltd. [2003] 263 ITR 289 (Cal) and Kundan Investment Ltd. [2003] 263 ITR 626 (Cal). Order: In the result, this appeal succeeds and is allowed. The order of the learned Income-tax Appellate Tribunal subject to this order shall remain suspended and the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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