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TMI Blog2011 (11) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... ed him in the first instance - as well as the Revenue Department, which requisitioned the same (gold jewellery) on being informed by the Police, that he was employed with M/s. Prakash Gold Palace (P.) Ltd. ('PGPL' for short), carrying the goods of his employer. The ld. CIT(A), the first appellate authority, taking cognizance of the same, as well as the evidence furnished by the assessee in respect of the said goods representing the stock-in-trade of PGPL, deleted the addition made by the AO u/s. 69A of the Act. In the proceedings before the tribunal, while the ld. CIT-DR, Shri Pavan Ved, relied on the assessment order, he did on the order of the first appellate authority. In addition, as he wanted to bring the relevant material on record, he filed a paper-book (PB), taking the court through the same. The tribunal, however, restored the assessment order. An employee earning a meagre salary of Rs. 6000/- per month was, thus, assessed to tax for the said goods amounting to Rs. 63.64 lakhs vide the impugned order. In fact, the sales-tax authorities had also treated it as representing the concealed turnover of PGPL, which the tribunal dismissed as of 'little consequence', stating that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. Reliance was placed by her on a host of case law (see Note # 1). The tribunal in the instant case had passed a very speaking and well considered order, taking into consideration the entirety of the facts as borne out by the material on record. The scope of sec. 254(2) is severely limited, i.e., to a patent mistake or a wrong committed by the tribunal in passing an order. Further, there has been no violation of the principles of natural justice, and the Department objects to the comments by the assessee (per para 4 of its Application) that neither party had been allowed due opportunity of being heard. A recall of its order by the tribunal can only be where it has passed an ex parte order, though on merits, with the party being not represented satisfying it as to the genuineness of the reason/s for its non-appearance on date of hearing (rule 24 of the Income Tax Rules, 1963 ( 'the Rules' hereinafter)). The same is clearly inapplicable in the facts and circumstances of the present case. 2.3 The ld. AR, in rejoinder, would submit that his petition or prayer may not be considered as an application u/s. 254(2), but one seeking invocation by the tribunal of its inherent power to add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as that brought forth by the hon'ble court in the case of S.B. Singar Singh & Sons (supra), i.e., that no court or tribunal can by its own wrong cause prejudice to any party before it, which in fact represents a legal maxim. We find echo of the same principle in the decision by the apex court in the case of Honda Seil Power Products Ltd. v. CIT [2007] 295 ITR 466/165 Taxman 307 (SC). The proposition and/or the circumscription to the exercise of the power (of recall), it would be apparent, is cast in terms more strict than rule 24, also falling u/s. 254(2), where-under an order may be recalled even for no wrong caused by the tribunal/court. Clearly, the 'wrong' mentioned herein must be one which is obvious and patent, not one which is itself subject to debate. The invocation or exercise of power hinges on two key words 'wrong' and 'prejudice', and where the two are themselves indeterminate or constitute the bone of contention, a plea for recall cannot succeed. 3.2 We may proceed to examine the assessee's case with reference to, and in the background of this understanding of the scope of power to recall, derived on the basis of its elucidation by the higher courts of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered may be either in favour of or even against the Revenue. But that is wholly irrelevant and besides the point, with what being relevant and applicable is the ratio of the decision or the exposition of law as made therein. In the present case, the Revenue had invoked sec. 69A of the Act. A substantial part of the assessee's case was that he being only an employee of PGPL, whose goods he was carrying, no addition in its respect, i.e., even assuming the same as not suitably explained, could be made in his hands, so that the assessment, if at all, could be made only in the hands of his employer, PGPL. It was thus incumbent on the tribunal to decide this issue before proceeding to examine the issue on merits, i.e., the satisfactory or otherwise nature of the assessee's explanation with regard to the nature and source of the requisitioned goods. No assistance to the tribunal toward the same having been extended by the parties, with the ld. CIT(A) also having not issued any definite findings qua this aspect of the matter, it examined the relevant provisions of law, as well as the settled law in the matter (refer para 4.1 & 4.2 of the impugned order), to hold that the assessee's status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. This is as it is only an answer arising out of or borne by and consistent with the material on record which is relevant and, thus, could find acceptance by the tribunal. The assessee has not pointed out any such. In fact, the queries themselves arise only out of the material on record. In the case of Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC), the apex court disapproved the adverse inference drawn by the tribunal on the basis of the answers by the appellant's counsel to the questions posed by the Members constituting the Bench during hearing, stating that for any evidence to be relied upon, it has to be taken on record, observing the prescribed procedure. The tribunal in the instant case has gone by the material on record. Further, the assessee, in this regard, states that its Ground Nos. 7 to 11 before the first appellate authority (forming part of the record) contains answers to some of the questions/queries raised by the tribunal. We are unable to see how, as the grounds themselves raise issues by which the assessee himself is agitated! Further, the same stand not answered by the ld. CIT(A) vide his order, and which is what prompted us to ask if the assessee would be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence in the quantity and dates; the inconsistency vis-a-vis the assessee's statement, including with regard to the source of the gold ornaments; the statement of the director, Sh. Abhilash K. Jain; the records at the local Branch office as also their state of maintenance; the absence of any order-book, etc.). 3.6 The assessee has cited another example from the order to highlight of the appeal having been decided without allowing it proper opportunity to explain its stand, leading to its cause being prejudiced. And which we may refer to, if only for the sake of completeness of this order. The relevant observations by the tribunal, and the assessee's charge in its respect, listed per para 7 of its written submissions, is reproduced as under: '7. In para 4.10 at page 19 of the Order the Hon'ble Tribunal has observed: " ......(Thirdly) we find that the assessee has paid tax at 24 lakhs on 2.2.2008, i.e., even prior to the completion of assessment on 26.3.2008. The contention of the assessee being a man of no means, thus stands disproved." It is submitted that the payment of Rs. 24 lakhs was made in compliance with the order of the Hon'ble Kerala High Court - vide judgment dated 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case; the assessee's status as an employee being confirmed, no further obligation in the matter lay on him. The claim/s being raised by the assessee, therefore, with reference to the captioned observation by the tribunal, are incorrect and misconceived. Likewise, qua the claim as regards the assessment of the impugned goods as the concealed turnover under sales-tax law. 3.7 Finally, with regard to the impugned order being principally a post hearing exercise by the tribunal. We wonder how it could be otherwise, particularly where the issue involved is essentially one of fact, entailing consideration of a variety of evidences adduced in support, only whereupon could proper and cogent findings of (relevant) facts, based on the appreciation of the evidence being relied upon, be issued, or could be said to have been so, and which would also include statement of the reasons underlying the same. All the legal and factual arguments advanced by the assessee in support of his case, including the case law and the materials relied upon, is necessarily to be considered, stating clearly the reasons for its acceptance or otherwise, and only whereupon, a speaking order could be said to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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