2007 (11) TMI 88 - HC - Income Tax

Single member bench, tribunal can decide the appeal where computed income is less than 5 lac even though same has been made in excess of Rs 5 lac by Comm(A) no records produced by revenue to prove that assessee was not willing to examine witness revenue s appeal is dismissed

Summary

Issues:
1. Jurisdiction of a single member of the Tribunal for appeals exceeding Rs. 5,00,000.
2. Justification of the Tribunal's decision to reverse findings on burden of proof under section 68 of the Income-tax Act.

Jurisdiction of a Single Member Tribunal:
The case involved an appeal by the Revenue challenging the Tribunal's decision in an income tax matter. The primary issue was whether a single member of the Tribunal had jurisdiction to decide the appeal when the subject matter exceeded Rs. 5,00,000. The Revenue argued that as per section 255(3) of the Income-tax Act, a single member could not adjudicate appeals exceeding this amount. The Revenue contended that the Tribunal should not have heard the appeal as the income computed by the Assessing Officer was Rs. 2,27,614, but the Commissioner of Income-tax (Appeals) enhanced it to Rs. 13,89,795. The Revenue requested the court to set aside the Tribunal's decision and remand the matter for reconsideration by a two-member bench. However, the respondent argued that the jurisdiction of a single member should be based on the income computed by the Assessing Officer, not the appellate authority. The court held that the words "Assessing Officer" in section 255 referred to the original authority's computation of income, not any enhancements made by the appellate authority. Therefore, the court ruled against the Revenue on this issue.

Burden of Proof under Section 68:
The second issue revolved around the Tribunal's decision to reverse the findings of the Commissioner (Appeals) regarding the burden of proof under section 68 of the Income-tax Act. The assessee had failed to explain a cash credit of Rs. 13,18,795, claiming it was a loan from various agriculturists. The Tribunal found that the assessee was willing to produce evidence to support the loan, contrary to the Commissioner's findings. The Revenue contended that the Tribunal erred in reversing the Commissioner's findings without proper evidence. However, the court noted that no records were presented to show that the assessee did not make the statement about producing witnesses before the authorities. As a result, the court held that the Tribunal did not commit any illegality in reversing the Commissioner's findings on the burden of proof under section 68.

In conclusion, the court dismissed the appeal, finding no merit in the Revenue's arguments. The court upheld the Tribunal's decision on both issues, affirming the jurisdiction of a single member based on the Assessing Officer's computation and supporting the Tribunal's reversal of the Commissioner's findings on the burden of proof.