2013 (9) TMI 159 - AT - Income Tax

Adjournment of case - Request for repeated adornments - The learned Counsel for the assessee Shri Praeep Kumar Kapoor, Chartered Accountant has moved two sets of applications for adjournment in his individual capacity and not on behalf of the assessee Held that - If a particular Advocate or a Chartered Accountant is not comfortable or has reservation with a particular judicial forum, it is his sweet will for making a representation before the said judicial forum but for that reason the judicial forum cannot be forced to adjourn all the matters for an unlimited period where the stakes of the revenue are substantially involved. The I.T.A.T. is created to adjudicate the disputes amongst the Income-tax Department and the assessee. If a particular advocate has some reservation with a particular Bench, it is for him to take a decision in this regard. Similar is the position with regard to the assessee as he has to take a final decision with regard to the appointment of his advocate or representative to represent his case before the judicial authority. The judicial authority, be it may be the Tribunal are concerned about the material placed before them while adjudicating the issues involved irrespective of the personalities of the Advocates appearing before him representing the case of the parties. In the light of these facts, when the Judicial Member has already withdrawn his order of reclusal from hearing of the cases being represented by Shri S. K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C. A., there is no valid reason for the adjournment on the ground that the Judicial Member has recused himself from hearing the cases of Shri S. K. Garg, Advocate and more so in the light of the facts that about 25% of the appeals pending before the Bench are being represented by Shri S. K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C. A. If Counsel for the appellant have any reservation with the Bench comprising of Judicial Member, they may take independent decision with regard to their representation before the Bench. But for the reason that they do not want to represent the cases, the hearing cannot be adjourned and assessee would be at liberty to make some other arrangement to prosecute his case in effective manner - Appeals being represented by Shri S. K. Garg, Advocate and Shri Pradeep Kumar Kapoor, C. A.(Counsels for the appellant) can be heard by the Bench comprising of the Judicial Member and the assessee would be at liberty to make some alternate arrange if Shri S.K. Garg, Advocate or Shri Pradeep Kumar Kapoor, C. A. do not wish to appear before the said Bench. Non-disclosure of sales revenue Held that - Assessing Officer instead of making an independent enquiry in order to work out the unaccounted sales has solely relied upon the order of the Settlement Commission before whom the assessee has agreed to pay a sum of Rs. 98,51,490/- whereas the Assessing Officer was required to make independent enquiry with regard to the different set of invoices found after obtaining the comments of the assessee. Since the Assessing Officer has made the additions without making independent enquiry in this regard, issue requires fresh adjudication by the Assessing Officer. Though the Hon ble High Court has remanded the matter to the Tribunal for adjudicating the appeal on merits, but in the absence of cogent material it has become practically impossible for the Tribunal to adjudicate the issue on merit as the enquiry on factual aspect is required to be conducted by the Assessing Officer - Since the matter is old, it is directed to the Assessing Officer to complete the assessment within a period of six months from the date of receipt of this order of the Tribunal.

Issues Involved:
1. Validity of initiation of proceedings under Section 147.
2. Service of notice under Section 148.
3. Computation for relief under Section 80 HHC.
4. Application of the order passed by the Hon'ble Settlement Commission under Excise Laws.
5. Addition of Rs. 72,51,612/- on account of suppression of sales.
6. Rejection of books of account and inference about unrecorded sales.
7. Conversion of entire sale into the income of the appellant.
8. Overall validity of the assessment order.

Detailed Analysis:

1. Validity of Initiation of Proceedings under Section 147:
The appellant challenged the initiation of proceedings under Section 147 on the grounds that the reasons recorded for the initiation were based merely on a show-cause notice issued by the Central Excise Authorities, which could not constitute the requisite material for such initiation. The Tribunal found that the reasons recorded by the Assessing Officer were not supplied to the assessee, depriving them of the opportunity to file objections. This issue was remanded back to the Assessing Officer for fresh adjudication after supplying the reasons for reopening to the assessee and obtaining their objections.

2. Service of Notice under Section 148:
The appellant contended that the jurisdiction notice under Section 148 was served on an unauthorized person, vitiating the initiation of proceedings. The Tribunal noted that this issue was not specifically adjudicated by the CIT(A) and required fresh examination. The Tribunal directed the Assessing Officer to re-examine the validity of the service of notice under Section 148.

3. Computation for Relief under Section 80 HHC:
The appellant argued that the CIT(A) erred in not accepting their computation for relief under Section 80 HHC. This issue was not specifically addressed in the Tribunal's order, indicating that it may not have been a focal point of the appeal.

4. Application of the Order Passed by the Hon'ble Settlement Commission under Excise Laws:
The appellant contended that the order passed by the Hon'ble Settlement Commission under Excise Laws was wrongly applied to conclude the suppression of sales of Rs. 72,51,612/-. The Tribunal noted that the Assessing Officer did not make an independent enquiry and solely relied on the Settlement Commission's order. This issue was remanded back to the Assessing Officer for independent verification and adjudication.

5. Addition of Rs. 72,51,612/- on Account of Suppression of Sales:
The appellant argued that the addition of Rs. 72,51,612/- was based on an incorrect application of the Settlement Commission's order and without independent verification. The Tribunal found merit in this argument and remanded the issue back to the Assessing Officer for fresh adjudication after obtaining the comments of the assessee and making necessary verifications.

6. Rejection of Books of Account and Inference about Unrecorded Sales:
The appellant contended that the books of account were not rejected, and no inference about unrecorded sales could be validly drawn. The Tribunal directed the Assessing Officer to re-examine this issue in light of the fresh enquiry to be conducted regarding the suppression of sales.

7. Conversion of Entire Sale into the Income of the Appellant:
The appellant argued that the authorities below were not justified in converting the entire sale of Rs. 72,51,612/- into the income of the appellant. The Tribunal remanded this issue back to the Assessing Officer for fresh adjudication, emphasizing the need for independent verification and consideration of the appellant's comments.

8. Overall Validity of the Assessment Order:
The appellant claimed that the assessment order was contrary to the facts, law, and principles of natural justice. The Tribunal found that several issues raised by the appellant required fresh examination and independent enquiry by the Assessing Officer. Consequently, the Tribunal set aside the order of the CIT(A) and remanded the matter to the Assessing Officer for fresh adjudication on multiple grounds.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to conduct a fresh enquiry and adjudicate on various issues, including the validity of the initiation of proceedings under Section 147, the service of notice under Section 148, and the addition of Rs. 72,51,612/- on account of suppression of sales. The Tribunal emphasized the need for independent verification and consideration of the appellant's objections and comments.

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