TMI Blog1996 (6) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... cer in respect of cash payment of Rs. 61,200 made on various dates to Sharma Enterprises, Gauhati, was proper ? 2. Whether, on the facts and in the circumstances of the case and in view of the decision of the Gauhati High Court on identical issue in the case of Paul Brothers v. CIT [1990] 186 ITR 356, the finding of the Tribunal was not erroneous in law ? " The questions relate to the assessee's assessment year 1985-86. For the said assessment year, the assessee claimed deduction under rule 6DD(j) of the Income-tax Rules, 1962 (for short, " the Rules "). The case of the assessee, inter alia, is that it made payment in cash for repair of truck, etc., to Sharma Enterprises, A. T. Road, Guwahati, on different dates amounting to Rs. 61,20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had failed to establish the exceptional and unavoidable circumstances under which payment had to be made in cash exceeding Rs. 2,500, that there was a wide gap between the date of raising the bill and the date of payment by the assessee and that it was not the case of the assessee that there had been urgency for which payment had to be made in cash nor was it the case of the assessee that both the parties did not have bank accounts. As regards the confirmatory letter from Sharma Enterprises, the Commissioner of Income-tax (Appeals) held that it could not be admitted within the meaning of rule 46A of the Rules. The assessee being aggrieved further took up the matter before the Income-tax Appellate Tribunal, Guwahati. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of questions quoted earlier and referred by the Tribunal. We heard Mr. J. P. Bhattacharjee, learned counsel appearing on behalf of the assessee, and Dr. A. K. Saraf, learned special counsel appearing on behalf of the Revenue. Dr. Saraf submitted that the finding regarding existence of exceptional and unavoidable circumstances by the Tribunal was a question of fact and this court in exercise of the power under section 256(1) might not answer such question of fact. Dr. Saraf further submitted that if the challenge was against the finding of the Tribunal on the basis that it was unjustified or perverse or not based on reasonably acceptable evidence, that could be the subject-matter of a reference and in the absence of such challenge the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh exceptional or unavoidable circumstances under which payment has to be made in cash exceeding Rs. 2,500. " Before coming to a decision regarding failure to establish exceptional and unavoidable circumstances, the authority must give reasons why it came to such conclusion. On a perusal of the order of the Commissioner of Income-tax (Appeals), we find that no specific reason has been given. Mr. Bhattacharjee also drew our attention to the order passed by the Tribunal. On a perusal of the order passed by the Tribunal, we do not find any ground why the Tribunal held that the assessee failed to prove exceptional and unavoidable circumstances. The Tribunal held thus : " The findings of the Commissioner of Income-tax (Appeals) had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... que/draft and the purchaser's business interest would suffer due to non-availability of goods otherwise than from this particular seller ; or (v) The seller, acting as a commission agent, is required to pay cash in turn to persons from whom he has purchased the goods ; or (vi) Specific discount is given by the seller for payment to be made by way of cash. " The circular itself indicates that these are not the only circumstances which can be said to be exceptional and unavoidable. There may be some other exceptional and unavoidable circumstances which may not be put in writing. In this case, the Income-tax Officer disallowed deduction on the ground that clauses of rule 6DD(j) of the Rules did not apply to the case of the assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment in cash. The same idea is writ large in the Rules. The assessee will have to show that there was no way left for the assessee except to pay in cash. In the nature of things whether in the statute, rules or circulars, all the contingencies cannot be enumerated exhaustively. Parliament referred to the inadequacy of facilities in section 40A. The rule-making authorities illustrated some of the circumstances in the Rules. The Revenue supplemented the further circumstances when exemptions can be claimed and allowed. " From the decision, it appears that there may be various circumstances which can be regarded as exceptional and unavoidable. Therefore, in our opinion, in view of the decision of this court in Paul Brothers' case [1990] 186 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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