9911796707
TMI Blog1999 (5) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... v and M/s R.C. Bhatta & Co. AO further noted that assessee has shown certain amounts outstanding in respect of those four parties as on 31st March, 1994, which is as under: Name of party Amount outstanding (Rs.) M/s D.N. Carrier 16,18,337 M/s A.S. Yadav 6,33,304 M/s Balwan Singh 3,66,479 M/s R.C. Bhatta & Co. 19,10,940 --------- 45,29,060 --------- He called upon the assessee to prove the genuineness of the transaction with each of the above referred to concerns. Assessee filed copies of M/s D.N. Carrier, A.S. Yadav, M/s Balwan Singh and M/s R.C. Bhatta & Co. is appearing in its books of accounts. However, no confirmation from this supplier of raw material was filed even though the same was called for by the AO. The assessee was called upon to produce the concerned persons of these raw material suppliers but none was produced. AO tried to summon those persons of these 4 concerns at his own by sending the notices. These persons, as noted by AO, were not found traceable at the addresses given by the assessee and AO called upon assessee again to produce the proprietors of all these concerns but none was produced except assessee filed copies of the bills raised by these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and no opportunity was given to assessee to confront the said material. There was non-compliance of mandatory provisions of ss. 142(3) and 131 of IT Act, 1961 (hereinafter referred to as the Act), and that fact made the assessment order a nullity. The other plea was that assessee was having accepted history as declared income was accepted in the past along with the books of accounts which were maintained in the regular course of business. Purchases of material were supported by the bills of suppliers and material was transported through trucks and complete details were placed on the record of AO. In case of 2 of the suppliers, some amount was outstanding on the first day of the accounting year and those two parties were accepted to be genuine in the earlier year. Remaining two parties made supplies in the year under consideration and in subsequent year in which their transactions were found genuine. The order of assessment was self-contradictory as the purchases effected from these 4 parties were accepted by the AO in respect of which payments were made before31st March, 1994, and AO cannot be allowed to treat the remaining purchase as not genuine. The remaining amount was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him to make the assessment de novo after considering the entire materials and evidence and after complying with the requirements of law. The assessee should be given reasonable opportunity to put forth his case. In the result, the assessment is set aside to be made afresh in accordance with law." The assessee is before us against this action of CIT(A). 4. The learned counsel Shri P.L. Juneja, Advocate of Supreme Court, had assailed the order of the CIT(A) on different counts and his plea is that different pleas were agitated before CIT(A), duly supported with material and case laws running into 6 paper books of more than 1000 pages but CIT(A) conveniently ignored all the pleas, material and case laws and adopted the easier method by restoring the matter to the file of CIT(A) for fresh disposal of the issue involved. Our attention has been brought to the pleas as well as to the material duly supported with case laws. 5. The first plea of the learned counsel for the assessee is that AO was expected to follow the consistent method. In earlier years, the assessee had been purchasing material from different parties including two of the above 4 parties and Department has accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 ITR 189 (Pat), CIT vs. R.Y. Durlabhji (1995) 211 ITR 178 (Raj), Raj Kumar Jain vs. Asstt. CIT (1994) 208 ITR 22 (AT)(All), and (1995) 52 TTJ (Del) 660 : (1995) 55 ITD 159 (Del). The AO had not brought anything on record that those parties were bogus or were not in existence even though assessee brought sufficient material to prove that amounts of purchase of material was paid to all the 4 parties through account payee cheques. The assessee filed necessary copies of bank account of these 4 parties and even filed copies of income-tax returns, etc. but CIT(A) had not cared to apply his mind to all the material placed before him. 8. It was also pleaded before CIT(A) that AO wrongly made the addition by ignoring the provisions of the Act and such an assessment order will be outside the provisions of the Act. AO collected evidence at the back of assessee and no opportunity was given to assessee to rebut that material and such action of AO was outside the purview of the Act as laid down by apex Court in the case reported at AIR 1934 SC 557, AIR 1986 SC 926. It was also pleaded that if authorities have not followed the prescribed mode, then such an order will be void and violative of Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factual conclusion deciding the appeal one way or the other. The same was the view laid down in the cases reported at AIR 1963 SC 884, 73 ELT 3 (SC), 89 ELT 60 (SC), CIT vs. Govinda Choudhary (1994) 116 CTR (SC) 61 : (1994) 74 Taxman 332 (SC), 92 ELT 3 (SC), Saurashtra Packing (P) Ltd. vs. CIT (1993) 204 ITR 443 (Guj). The plea is that assessee was forced to file second appeal and to face the same, AO who had been biased against him in not considering the material and making addition on surmises and conjectures. On merit also, the learned counsel had taken us to the documents filed in paper book (Part II) before us running into 466 pages. According to the learned counsel, the statement of Rajeev Jain was recorded and the same is appearing at pp. 3-7. About M/s R.C. Bhatia & Co., copies of balance sheet, P&L a/c for relevant year with annexures were filed at pages 9-16. The said supplier was income-tax assessee and copy of assessment order for asst. yrs. 1992-93, 1993-94 were filed as appearing at pp. 21 and 22. Copies of acknowledgment receipt for 1993-94 and 1994-95 showing filing of return were appearing at pp. 23 and 18. Letter of confirmation filed by that concern was appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper section. The learned counsel also referred to case law on the above referred plea raised before CIT(A) as well as before us and even filed extract of all the relevant case laws not only before us but before CIT(A) and we have to admit that learned counsel must have taken so much of pain in making the paper books even compiling all the case laws for helping the CIT(A) as well as us to decide the controversy. The grievance of the learned counsel was that authorities below have not been sympathetic towards him as none of the authorities below cared to look into the evidence or to the case law or even to take up the pleas so raised by him duly supported with material and case law. On the basis of all these facts, learned counsel submitted that addition was unwarranted and in this case, a handsome amount of damages should be awarded to the assessee from the Department for which different case laws have been referred to by the learned counsel. 14. As against it, the learned Departmental Representative placed heavy reliance on the order of authorities below. According to him, the main grievance of the assessee as laid down in the grounds of appeal is that CIT(A) was not justified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be looked into now as CIT(A) has not decided the merits of the case and for that reliance is placed on the decision of CIT vs. Begum Noor Banu Aladdin (1993) 115 CTR (AP) 448 : (1993) 204 ITR 166 (AP). The learned Departmental Representative also opposed the plea of the counsel that AO was not justified in invoking s. 68 for making the addition. In that he has invited our attention to words 'any sum' used in s. 68 and placed reliance on the decision of Punjab & Mariana High Court at 98 ITR 327 (sic) in which scope of s. 68 has been defined to the fact that credit entry may be either of assessee or third party and that language shows that it is general in nature and applied to all credit entries in whosever's name they may stand. The plea is that addition can be made in s. 68. On the basis of all, the plea is that no justification for (sic) in the order passed by the CIT(A). 16. Learned counsel in a rejoinder has submitted that AO had flouted the principles of natural justice and his order is void and does not merge in appellate order. Reliance was placed on the case reported at AIR 1982 (NOC) J.K. 141 and other cases filed. He further submitted that learned Departmental Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of that concern as well as copies of acknowledgment by which returns were filed by that concern. Copies of bills of all the 4 parties had been filed along with details of payment made in respect of outstanding amounts as on 31st March, 1994 in subsequent year through account payee cheques, Bank certificate in respect of such payments in the year under consideration as well as in asst. yr. 1995-96 were also filed in respect of all the four parties together with combined certificate for all the parties. There were affidavits of Rajeev Jain and that of concerned CA as well as new evidence sought to be filed before CIT(A). There were different pleas as referred to above by us as in the body of arguments of learned counsel for the assessee. These were all important facets involving the issue before us. The first point for consideration before us is as to whether CIT(A) was justified in restoring the matter back to the file of AO or should have decided the controversy himself. We are of the considered view-that it was CIT(A) who should have decided the appeal on merits either way without restoring the matter back to the file of AO. The reasons are that assessee has taken so many fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order is rectifiable or void ab initio or not as contended by learned counsel for the assessee is again an important plea. All these facts were going to the very root of the assessment order so framed and assessee had brought every material which was in his possession to prove the bona fides of the purchases/transactions. It was the duty of the learned CIT(A) to proceed and to examine all the material keeping in view that settled proposition of law on each aspect and to record categorical finding on all aspects. He failed and we have to give effect to the order of the apex Court as reported in 73 ELT 3 by apex Court that such remand is to be treated as superfluous. It was the duty of CIT(A) to decide the appeal one way or the other, rather than choosing easy course of remanding the matter to AO. In the facts and circumstances, CIT(A) was not justified in remanding the matter back to the file of AO and that order is to be set aside. 19. Now comes the other plea as to whether Tribunal can proceed to decide the matter on merit when CIT(A) had kept aloof from entering into the merits of the case. We are afraid we cannot do so as it will be prejudicial to both the parties. The mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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