1981 (6) TMI 25 - HC - Income Tax

Summary

Issues involved: Assessment proceedings for the assessment year 1969-70, addition of cash credit of Rs. 25,000, explanation by the assessee, consideration of additional evidence by the Tribunal, opportunity for the assessee to explain or rebut the additional evidence.

Summary:
In the assessment proceedings for the assessment year 1969-70, the Income Tax Officer (ITO) noticed a cash credit of Rs. 25,000 in the assessee's books of account. Despite the explanation provided by the assessee, the ITO made an addition of Rs. 25,000 to the total income. This addition was upheld by the Appellate Authority Commissioner (AAC) and further appealed by the assessee to the Income-tax Appellate Tribunal. The Tribunal considered additional evidence, in the form of bank and co-operative societies' certificates/statements, which was objected to by the assessee. The Tribunal, however, overruled the objection stating that the assessee was aware of this evidence from previous penalty proceedings. The Tribunal's decision was challenged on the grounds that the assessee was not given an opportunity to explain or rebut the additional evidence during the assessment proceedings.

The High Court held that the Tribunal should have provided the assessee with an opportunity to address the additional evidence presented by the revenue. It was emphasized that the assessee did not have a chance to respond to this evidence during the assessment proceedings, and justice required such an opportunity. Therefore, the Tribunal's consideration of the additional evidence without granting the assessee a chance to rebut it was deemed improper. The High Court decided to remit the matter back to the Tribunal for fresh disposal in accordance with the law, allowing the assessee to explain or rebut the additional evidence. The Tribunal was also given the discretion to remand the matter to the lower authority for recording further evidence if deemed necessary.

In conclusion, the High Court declined to answer the question referred and directed the matter to be reconsidered by the Tribunal, emphasizing the importance of providing the assessee with a fair opportunity to address the additional evidence presented during the assessment proceedings.