2000 (8) TMI 81 - SC - Income Tax

Summary

Issues involved:
The issues involved in the judgment are:
1. Whether evidence can be used without affording an opportunity for cross-examination under section 131 of the Income-tax Act, 1961.
2. Whether failure to summon witnesses and consider affidavits under section 131 vitiates the assessment.

Issue 1:
The High Court considered questions arising from an order passed by the Tribunal in a rectification application. The High Court's judgment was based on the premise that the matters at hand were beyond the scope of rectification and involved the merits of the case rather than apparent errors. The reference application under section 256(1) sought to address questions stemming from the principal order of the Tribunal. The High Court's misdirection led to the order being set aside, and the case was restored for fresh consideration by the High Court of Madhya Pradesh, sitting at Jabalpur, with a directive for expeditious resolution.

Issue 2:
The High Court's decision was against the assessee, indicating that the assessment was not vitiated by the failure to summon witnesses and consider the affidavit filed by Mohd. Rashid under section 131. The Supreme Court allowed the civil appeal, setting aside the High Court's order and restoring the reference for reconsideration. No costs were awarded in this matter.