2009 (2) TMI 39 - HC - Income Tax

Income from un-disclosed sources submission that agreement to sell produced before first Appellate Authority has not been considered while sustaining additions - finding of CIT (A) that the amount received allegedly for sale of land cannot be co-related with the dates of deposits in the bank account, is based on valid reasons CIT (A) has held that the agreement to sell being an additional evidence is not covered by exceptions of Rule 46A(1) no question of law arise appeal dismissed

Issues Involved:
1. Maintainability of the appeal due to non-impleadment of the Income Tax Appellate Tribunal (Amritsar Bench).
2. Validity of the assessment order regarding undisclosed income.
3. Consideration of additional evidence (agreement to sell) by the Commissioner of Income Tax (Appeals).
4. Substantial question of law under Section 260-A of the Income Tax Act, 1961.

Detailed Analysis:

1. Maintainability of the Appeal:
The appellant filed the appeal under Section 260-A of the Income Tax Act, 1961, challenging the orders of the Income Tax Appellate Tribunal (Amritsar Bench), the Commissioner of Income Tax (Appeals), and the assessment order by respondent No.1. However, the Tribunal was not impleaded as a party respondent in this statutory appeal, raising questions about the maintainability of the appeal. The court noted that the order of the Income Tax Officer had merged into the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, thus questioning the maintainability of the appeal.

2. Validity of the Assessment Order:
The assessment order passed by respondent No.1 determined the appellant's net taxable income for the assessment year 2004-05 as Rs. 16,13,800/-, with a tax liability of Rs. 6,45,436/-. The order also initiated penalty proceedings under Section 271(1)(c) of the Act. The appellant's explanation regarding the deposits in his bank accounts was partially accepted, but the explanation for Rs. 14,67,137/- was rejected due to lack of documentary evidence. The Commissioner of Income Tax (Appeals) upheld this decision, and the Income Tax Appellate Tribunal dismissed the subsequent appeal.

3. Consideration of Additional Evidence:
The appellant submitted a photocopy of an agreement to sell to substantiate his claim regarding the deposits. The Commissioner of Income Tax (Appeals) considered this document but found it unconvincing due to the absence of details about the date and mode of receipt of the total amount of Rs. 28 lakhs. The document was also not attested or certified by any authority, rendering it unreliable. Additionally, the Commissioner noted that the document was an "additional evidence" not covered by the exceptions in Rule 46A(1) of the Income Tax Rules, 1962, and thus, could not be admitted.

4. Substantial Question of Law:
Under Section 260-A of the Income Tax Act, an appeal to the High Court is permissible only if it involves a substantial question of law. The appellant did not clearly formulate any substantial question of law in the memorandum of appeal. The court referred to the Supreme Court's definition in "Kashmir Singh v. Harnam Singh," emphasizing that a substantial question of law must be debatable, not previously settled, and have a material bearing on the case. The court found that the agreement to sell had been considered and rejected for valid reasons, and thus, no substantial question of law was involved.

Conclusion:
The court concluded that no substantial question of law was involved in this case. The appeal was dismissed on these grounds. The court emphasized that the agreement to sell was considered by the first appellate authority, but it was rejected due to lack of details and certification, and it did not meet the criteria for additional evidence under Rule 46A(1). The appeal was thus dismissed, affirming the decisions of the lower authorities.

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