2015 (12) TMI 977 - HC - Income Tax

Undisclosed sources and the nature of credit entries mentioned in the UTI Bank Account - Held that - Addition of ₹ 1.20 crores was made to the total income of the assessee for the period under consideration. The assessee filed revision petition before the CIT(C). It was inter alia recorded by the CIT(C) that the assessee was offered proper opportunity to give address of Pritam Singh and thereafter was also asked to produce Pritam Singh for recording his statement but the assessee failed to discharge his liability. He also did not disclose his bank account No.30210100009591. The money was received in the bank account of the assessee but was withdrawn in cash and thereafter there was no trace of the said amount. In case the transaction was so transparent, the money should have been returned by cheque in the same manner as it was received but this was not so. The petitioner was also asked to provide the original MOU and compromise deeds and other such documents. He had expressed his inability to produce the originals. The assessee had failed to produce sufficient material either before the Assessing Officer or CIT(C) in revisional proceedings on the basis thereof a finding of fact could have been returned in favour of the petitioner. The factual matrix was required to be established by producing material evidence in that regard before the assessing authority or the revisional authority. The learned counsel for the petitioner was unable to give any one good or sufficient reason which prevented him to produce material evidence in support of his version either before the Assessing Officer or CIT(C). The petitioner cannot be allowed de novo trial under the garb of this submission. In such a situation, in the absence of any material on record which could substantiate the claim of the petitioner, we do not find justification to entertain this petition under Articles 226/227 of the Constitution of India as there is no jurisdictional error in the order of the assessing authority or the CIT(C). - Decided against assessee

Summary

Issues:
1. Petition for quashing order dismissing revision petition under section 264 of the Income Tax Act, 1961.
2. Failure to provide satisfactory explanation for sources of credit entries.
3. Request for referral back to revisional authority for fresh adjudication.
4. Disputed questions of fact and jurisdiction under Articles 226/227 of the Constitution of India.

Analysis:

Issue 1:
The petitioner sought to quash the order dismissing the revision petition under section 264 of the Income Tax Act, 1961. The petitioner was involved in a transaction related to the purchase of agricultural land, which led to an addition of Rs. 1.20 crores to the total income due to lack of satisfactory explanation for the sources of credit entries. The CIT(C) recorded that the petitioner failed to provide essential information, including the address of a key individual, and did not disclose crucial bank account details. Despite opportunities, the petitioner did not produce necessary documents or evidence to support the transactions, leading to the dismissal of the revision petition.

Issue 2:
The petitioner's counsel argued for the case to be referred back to the revisional or assessing authority for a fresh adjudication to determine the bonafide income. However, it was noted that the petitioner failed to present sufficient material before the authorities to substantiate their claims. The assessing authority and CIT(C) found a lack of justification for entertaining the petition under Articles 226/227 of the Constitution of India due to the absence of material evidence supporting the petitioner's version.

Issue 3:
The court emphasized the need for establishing a factual matrix through material evidence before the assessing or revisional authorities. The petitioner's inability to provide substantial evidence hindered the case, and the court rejected the request for a de novo trial under the guise of determining the bonafide income. The lack of material on record to support the petitioner's claims led to the dismissal of the petition.

Issue 4:
Considering the disputed questions of fact involved in the case, the court highlighted the limitations of writ jurisdiction under Article 226 of the Constitution of India. Citing precedents, the court noted that writ petitions are not appropriate remedies when disputed questions of fact are raised. Refusal to issue a writ was based on the discretionary nature of judicial decisions and the need for substantial evidence to support claims. The court dismissed the writ petition, stating it lacked merit and justification for further consideration.