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TMI Blog2017 (1) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of purchases under section 69B of the Income-tax Act at Rs. 23,59,133 (ii) Difference in stock being undisclosed income of Rs. 1,32,73,013. (iii) Undisclosed credits under section 68 of the Income-tax Act being the undisclosed income of Rs. 10,72,247. (iv) Disallowance under section 40A(3) of the Income-tax Act being undisclosed income of Rs. 24,216 (v) Gross profit on suppressed sales being undisclosed income at Rs. 19,45,509. (vi) Addition on account of cessation of liability under section 41(1) of the Income-tax Act at Rs. 2,37,818. 3. The assessee had filed an appeal before the Commissioner of Income- tax (Appeals). The said authority had deleted the addition under section 69B and confirmed the addition in stock at Rs. 64,28,166 as against addition made by the assessing authority at Rs. 1,32,72,013. The addition for undisclosed credits under section 68 of the Income-tax Act at Rs. 10,72,247 was confirmed. The addition on account of gross profit on suppressed sales was deleted and the addition under section 41(1) was confirmed. That order was challenged by both, the assessee as well as the Revenue before the Income-tax Appellate Tribunal (ITAT). The assessee had r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be vested with jurisdiction to finalise the assessment under section 153A of the Income-tax Act. 6. It is also contended that in view of section 292B of the Income-tax Act notice or summons of proceedings is not rendered invalid if the proceedings, in substance and effect, are in conformity with or according to the intent and purpose of the Income-tax Act. It is further urged that the provisions of section 292BB of the Income-tax Act are also applicable to the present case on hand as the assessee had participated in the proceedings and as such it ought to be deemed that notice under the provisions of the Act had been duly served upon the assessee. The learned counsel would specifically urge on the merits as to the Tribunal having committed an error in reversing the orders of the Commissioner of Income-tax (Appeals) as well as the Assessing Officer and therefore he seeks that the substantial questions of law raised be answered in favour of the Revenue. 7. On the other hand, Shri Ashok Kulkarni, learned counsel for the assessee has pointed out that in so far as the first question that is raised as a substantial question of law, it is contended that the Tribunal has applied an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, which according to the learned counsel is impermissible under section 260A of the Income-tax Act. 10. It is further contended that there is a clear finding of fact by the Income- tax Appellate Tribunal on all the issues raised in the present appeals. It is significant that no additional material is placed before this court to demonstrate that the findings of fact arrived at by the Tribunal are perverse. It is emphasized that the cardinal principle is that the Tribunal which is the final fact finding authority and if such findings of fact are to be assailed, it would require a substantial question as to there being a perverse finding of fact by the Tribunal to have been raised. In the absence of any such question having been raised, it cannot be said that any question of law arises for consideration and much less a substantial question of law as contemplated under section 260A of the Income-tax Act. Reliance is placed on the following authorities by the learned counsel for the above propositions : (1) Vijay Kumar Talwar v. CIT [2011] 330 ITR 1 (SC) ; (2) Mangalore Ganesh Beedi Works v. CIT [2015] 378 ITR 640 (SC) ; (3) M. Janardhana Rao v. Joint CIT [2005] 273 ITR 50 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest court or the general principles to be applied in determining the question are well settled and there is a mere question of applying those principles or that the plea raised is palpably absurd the question would not be a substantial question of law.' 19. Similarly, in Santosh Hazari v. Purushottam Tiwari [2001] 251 ITR 84 (SC) ; [2001] 3 SCC 179, a three-judge Bench of this court observed that : 'A point of law which admits of no two opinions may be a pro position of law but cannot be a substantial question of law. To be "substantial" a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory Commission v. CESC Ltd. [2002] 8 SCC 715." 13. Further, in Mangalore Ganesh Beedi Works case (supra), the Supreme Court has held as follows (page 648 of 378 ITR) : "19. . . . There is a clear finding of fact by the Tribunal that the legal expenses incurred by the assessee were for protecting its business and that the expenses were incurred after November 18, 1994. There is no reason to reverse this finding of fact particularly since nothing has been shown to us to conclude that the finding of fact was perverse in any manner whatsoever. That apart, if the finding of fact arrived at by the Tribunal were to be set aside, a specific question regarding a per verse finding of fact ought to have been framed by the High Court. The Revenue did not seek the framing of any such question. In this regard, reference may be made to K. Ravindranathan Nair v. CIT [2001] 247 ITR 178, 181 (SC) wherein it was observed : 'The High Court overlooked the cardinal principle that it is the Tribunal which is the final fact-finding authority. A decision on fact of the Tribunal can be gone into by the High Court only if a question has been referred to it which says that the finding of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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