TMI Blog2019 (8) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... arises to the writ petitioner to seek condonation of delay, notwithstanding exclusion of time spent in the instant writ petition, it is open to the writ petitioner to file a delay condonation application before CIT-A and the same shall be decided by CIT-A on its own merits and in accordance with law. As this Court is now relegating the writ petitioner to alternate remedy of a statutory appeal before CIT-A, though obvious it is made clear that all questions raised by the writ petitioner in the instant writ petition, including grounds canvassed and contentions urged are left open. With regard to scope of the appeal itself, the same has been alluded to and set out supra elsewhere in this order. If the writ petitioner chooses to file a statutory appeal, the same shall be decided by the Appellate Authority namely CIT-A keeping in mind observations of this Court regarding the scope of the appeal, more particularly, Section 250(4). - Writ petition is disposed of with the above directions - W.P.No.1896 of 2019 And W.M.P.No.2098 of 2019 - - - Dated:- 19-8-2019 - Mr. Justice M. Sundar For the Petitioner : Mr.Sandeep Bagmar R., for Mr.K.Gowtham Kumar. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner assessee under one more head, i.e., business promotion expenses to the tune of little over ₹ 13 lakhs (₹ 13,14,362/- to be precise) was disallowed, but this was given quietus by writ petitioner assessee and is not before this Court now. 8. With regard to aforementioned two donations and eligibility under Section 35(1)(ii) of IT Act, writ petitioner assessee carried the matter in appeal by way of a regular statutory appeal under IT Act to the Commissioner of Income Tax Appeals, who vide order dated 04.05.2017 dismissed the appeal confirming the assessment order made by the Assessing Officer. Writ petitioner carried this matter further to ITAT by way of a further statutory appeal under Section 254 of IT Act (as mentioned supra) and the ITAT, vide aforementioned order dated 27.09.2017 set aside the order of the Assessing Officer as well as the order of the Commissioner of Income Tax Appeals and remitted the matter back to the Assessing Officer with certain directions. The crux and gravamen of the remittal order passed by ITAT is contained/articulated in paragraphs 6 to 8 of the order of ITAT and the same read as follows: '6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same has to be furnished to the assessee and an opportunity shall be given to the assessee to rebut the same. In India, we are following adversary system of judicial administration, therefore, no order can be passed against any person by the judicial authorities/officers who are entrusted with judicial work without furnishing relevant copies of the document and statement on which reliance was placed. 8. In this case, admittedly, the Assessing Officer placed reliance on the statement recorded during the course of survey operation and other material found during the course of survey operation. Principles of natural justice is one of the cordial rule to be followed in the adversary system of judicial administration. Rule of law is supreme in this country, therefore, unless it otherwise provided in the relevant statute enacted by the Legislature, the principles of natural justice cannot be taken away by means of the procedure or the formalities prescribed in the Office Manual which is meant for the internal administration of Department. In this case, even the Office Manual was not brought to the notice of the Bench even though the Ld. D.R. claims that as per Office M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at we had resorted to unfair means and passed an order against us. b. The sworn statement was recorded under Section 133A wherein there are numerous judicial precedence that the sworn statement cannot be taken as a basis to reach conclusion in the assessment. c. Whatever statement is recorded under Section 133A of the Income Tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law, vide Paul Mathews and Sons vs. CIT (2003) 263 ITR 101 (Ker). d. An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of accounts do not correctly disclose the correct state of fats, vide decision of the Apex Court in Pullangode Rubber Producer Co. Ltd. vs. State of Kerala, [1973] 91 ITR 18. e. Hence as per the point c. stated above we request you to kindly give as evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame reads as under: 'The Hon'ble ITAT vide their order dated 27.09.2017, has categorically directed the Assessing Officer to provide the documents relied upon and not anything beyond that. Hence, your request made in your letter dated 12.10.2018 for cross-examination of the parties from whose statements were recorded, cannot be considered and hence rejected.' 13. After the aforesaid two sets of communications, the respondent has written one more letter dated 19.11.2018, reiterating its earlier request and thereafter the impugned order came to be passed. 14. In the hearing today, learned counsel for writ petitioner, adverting to the impugned order, submitted that it refers to sworn statements from Secretary of Genetics School and Founder Director of Herbicure Foundation. The impugned order mentions that in these sworn statements, these two individuals have admitted to having given accommodation entries by way of commission to different beneficiaries in the guise of donation receipts to be finally given back to the donors in the form of cash or cheque. 15. There is no disputation or disagreement before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the writ petitioner post remand by ITAT and submitted that Founder Director of Healthcare Foundation has deposed that the accommodation of bogus donations was facilitated by one Kishan Bhawasingka. It was submitted that neither Kishan Bhawasingka's statement was furnished to the writ petitioner nor any cross-examination permitted. 17. Furthering his submissions in this direction, learned counsel for writ petitioner submitted that this is clearly violation of 'natural justice principle' ('NJP' for brevity). 18. Responding to the aforesaid submissions, learned Revenue Counsel submitted that what is of utmost importance is that the aforesaid two sworn statements from the two individuals alone do not constitute the basis of the impugned order. In other words, it was submitted by learned Revenue Counsel that there are other corroborating material before the Court and the impugned order was passed based on such corroborating material. 19. It was also pointed out that respondent has come to the conclusion that it is not just a case of accommodation being provided, but it is also a case where the cash was rerouted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, learned counsel for writ petitioner pointed out that a statutory appeal remedy is available to the writ petitioner, by way of a statutory appeal to the Commissioner of Income Tax Appeals under Section 246A of IT Act. A perusal of Section 246A of IT Act reveals that the instant case will fall under Section 246A(1)(a). 25. Before adverting to alternate remedy, it is also necessary to notice that the question of permitting cross-examination will turn heavily on the facts and circumstances of each case. In the instant case, the question as to whether there was routing back at all is a very crucial question, which will impact the writ petitioner's right to seek cross-examination. In this regard, a judgment of Hon'ble Supreme Court in Andaman Timber Industries vs. Commissioner of Customs Excise, Kolkata-II reported in MANU/SC/1250/2015 is of significance, relevant paragraph is paragraph-6 and the same reads as under: '6. As mentioned above, the Appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter dispose of the statutory appeal on the basis of such inquiry conducted by himself or on the basis of post inquiry report from the Assessing Officer in this regard. 29. In the light of sub-section (4) of Section 250, it is clear that if the writ petitioner is relegated to alternate remedy of appeal under Section 246A(1)(a) of IT Act, in the instant case, the appeal will not be ineffectual or not efficacious. In other words, the appeal has ample and adequate scope to permit the writ petitioner to raise this issue of cross-examination and the Appellate Authority can also look into the same in the light of factual disputes pertaining to the factual issue of re-routing and thereafter decide the appeal. 30. This takes us to alternate remedy as a principle. 31. With regard to exercise of writ jurisdiction on the teeth of alternate remedy, the restraint which the Writ Courts have placed on themselves is a self-imposed restraint. In other words, Rule of alternate remedy is clearly a self-imposed restraint. It follows as a sequitur that the alternate remedy rule is not a rule of compulsion and it is a rule of discretion. To put it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Oswal Woollen Mills Ltd. [(1984) 2 SCC 646 : 1984 SCC (Cri) 348] we had occasion to consider an interim order passed by the Calcutta High Court in regard to a matter no part of the cause of action relating to which appeared to arise within the jurisdiction of the Calcutta High Court. In that case the interim order practically granted the very prayers in the writ petition. We were forced to observe: [SCC para 4, pp. 649-50: SCC (Cri) p. 352] It is obvious that the interim order is of a drastic character with a great potential for mischief. The principal prayer in the writ petition is the challenge to the order made or proposed to be made under clause 8-B of the Import Control Order. The interim order in terms of prayers ( j ) and ( k ) has the effect of practically allowing the writ petition at the stage of admission without hearing the opposite parties. While we do not wish to say that a drastic interim order may never be passed without hearing the opposite parties even if the circumstances justify it, we are very firmly of the opinion that a statutory order such as the one made in the present case under clause 8-B of the Import Control Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hew case regarding rule of alternate remedy, the principle that such a rule, though a rule of discretion and not a rule of compulsion, should be exercised with greater rigour in fiscal law statutes has been laid down. More importantly, in Satyawati Tondon case , Hon'ble Supreme Court held that such a rule has to be applied with utmost rigour when it comes to cases involving taxes, cess, fees etc., In other words, when it comes to fiscal statutes, these rules have to be applied with greater rigour and it is to be applied very strictly with regard to recovery of taxes, CESS, fess etc., Relevant paragraph in K.C.Mathew case (cited supra) is paragraph 10 and the same reads as follows: ' 10. In Satyawati Tondon the High Court had restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, the availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, the object and purpose of the legislation, it was observed that a writ petition ought not to be entertained in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernate remedy of statutory appeal before CIT-A under Section 246A(1)(a) of IT Act in the instant case, the same has to be filed within 30 days from the date of service of notice of demand. In the instant case, the notice of demand as per usual practice was served along with the impugned order dated 29.11.2018 and it was served on the writ petitioner on 24.12.2018. Before the expiry of 30 days therefrom, instant writ petition has been presented before this Court on 22.01.2019. Therefore, this Court deems it appropriate to exclude the period spent by the writ petitioner in the instant writ petition i.e., the period from 22.01.2019 to the date on which copy of this order is made available, by applying the principle adumbrated in Section 14 of Limitation Act. 36. Notwithstanding such exclusion, even if delay occurs, the same is condonable under Section 249(3) of IT Act and there is no cap for the same. The power to condone the delay is vested with CITA. If the need arises to the writ petitioner to seek condonation of delay, notwithstanding exclusion of time spent in the instant writ petition, it is open to the writ petitioner to file a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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