2016 (7) TMI 1276 - HC - Income Tax

Realization of premium - Whether on the facts and in the circumstances of the case, the Tribunal ought to have deleted the interest charged upon the applicant under Section 215 of the Act? - Whether the applicant should be allowed to cross examine only 5 witnesses instead of all the witnesses whose testimony had been used / relied by the department against the assessee company? Held that - All contentions of the parties including those arising in this Reference are expressly kept open to be urged before the Tribunal. Taking into account the fact that the appeal pertain to the year 1993, the Tribunal will endavour to dispose of the appeal as expeditiously as possible and preferably within a period of six months from today.

Summary

Issues:
1. Compliance with principles of natural justice in assessment
2. Deletion of alleged premium realization
3. Deletion of interest charged under Section 215 of the Act
4. Cross-examination of witnesses by the applicant

Compliance with principles of natural justice in assessment:
The High Court was approached for a Reference under Section 256(1) of the Income Tax Act, 1961, seeking an opinion on several substantial questions of law. One of the questions pertained to whether the Tribunal, upon finding non-compliance with the principles of natural justice, should have canceled the assessment or deleted the addition made by the Income Tax Officer. However, during the proceedings, it was highlighted that subsequent events had occurred post the Tribunal's order, leading the parties to agree not to press the Reference further. Consequently, the parties arrived at a consensus not to pursue the Reference, and the Court returned the Reference unanswered, disposing of the matter accordingly.

Deletion of alleged premium realization:
Another issue raised in the Reference was whether the Tribunal erred in not deleting ?23 crores, representing the alleged realization of premium. However, due to subsequent developments and the agreement between the parties not to press the Reference, this issue was not addressed by the Court, and the Reference was disposed of without providing an opinion on this matter.

Deletion of interest charged under Section 215 of the Act:
The Reference also sought clarification on whether the Tribunal should have deleted the interest charged on the applicant under Section 215 of the Act. Despite the questions framed for the Court's opinion, the Reference was ultimately returned unanswered due to the agreement between the parties not to pursue the matter further, thus leaving this issue unresolved.

Cross-examination of witnesses by the applicant:
Lastly, the Reference questioned whether the applicant should be allowed to cross-examine only five witnesses instead of all witnesses relied upon by the department. However, as the parties mutually decided not to press the Reference, this issue, along with others, was left unaddressed, and the Reference was disposed of accordingly.