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TMI Blog1971 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... laram were assessed under section 23 of the Indian Income-tax Act and their assessment completed for the year in question on 30th June, 1951. They were assessed on ' an income ' of Rs. 26,43,573. Some time in 1955, however, the Income-tax Officer received certain information and commenced to make enquiries regarding the amount of Rs. 1,07,350. He wrote to the manager of the Punjab National Bank, Kalbadevi Branch, Bombay, asking for particulars of the remittance which had been received through that branch at Bombay. That letter is not on the record, but the bank manager's reply dated 18th February, 1955, has been reproduced verbatim in paragraph 2 of the statement of the case from a quotation thereof in paragraph 3 of the order of the Appellate Assistant Commissioner. The letter was as follows. " With reference to your above letter, we have to inform you that one telegraphic transfer of Rs. 1,07,350 sent by Messrs. Kishinchand Chellaram from Madras was received by us on October 16, 1946. T. T. receipt was issued by us on the same day in favour of one Nathirmal and paid in cash on the same day. " On receipt of this letter the Income-tax Officer wrote two letters to the assessee dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y stated : " We received one T. T. for Rs. 1,07,350 from our Madras officer on October 16, 1946, favouring Nathirmal. The amount was remitted by Messrs. Kishinchand Chellaram through our Madras office. The address of the payee as per our record is Guzdar House, Girgaum Road, Bombay. " After this letter was received from the Punjab National Bank, the assessee wrote a further letter to the Income-tax Officer stating that they (the assessees) were satisfied that " no such amount had been remitted by our office in Madras. " They, however, added that Nathirmal was a common name in their community and, therefore, requested the Income-tax Officer to give them the father's name of Nathirmal " to enable us to look into the matter further ". They also stated : " You will also kindly let us know as to who, on behalf of the firm, purports to have sent the T. T. from Madras. Can you kindly give us any other information that you may have in your possession to be able to deal with the matter?" It appears that thereafter the Income-tax Officer simply proceeded to pass his order under section 34 on 15th March. 1957. The Income-tax Officer held that there was no reason to doubt the bank's state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... known as Kevalram Chellaram. The Appellate Assistant Commissioner held that it was Tilokchand Chellaram who had joined the Mount Road branch as manager a few days before the remittance on his transfer from Ooty branch, who was concerned with the remittance. It is not in dispute before us and is stated as a fact in the statement of the case also that the remittance from Madras was by payment of cash to the Punjab National Bank at Madras. Upon these facts the Appellate Assistant Commissioner took the view that the mere fact that the remittance was by an employee to another employee did not absolve the appellant from explaining and proving the nature and source of the remittance. He added that " the employees were no more than stooges in the appellant's hands ", a remark to which strong exception was taken in the arguments before us. When the matter was taken in appeal to the Tribunal, the Tribunal confirmed the orders of the tax authorities and relied upon four important circumstances as follows : 1. The fact that there was a remittance of Rs. 1,07,350 from Madras and that that remittance was received by an employee of the assessee in Bombay. 2. That there was an employee at Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first time when an application was made to call for the T.T. application before the Appellate Assistant Commissioner. It was only when the T.T. application was received that the name of Tilokchand was disclosed for the first time. It was impossible, therefore, for the assessee to ascertain the true facts without knowing who the remitter was. Secondly, he pointed out that the same difficulty existed regarding the name of the payee, Nathirmal. 'it was disclosed for the first time in the Income-tax Officer's letter dated 4th March, 1955, and Nathirmal being a common name in the community to which the parties belonged, it was impossible to trace this Nathirmal without his father's name being known. The assessee made this clear to the Income-tax Officer in their letter dated 13th March, 1957, and asked for the father's name of Nathirmal. Counsel urged that it was only disclosed for the first time to the assessee that this Nathirmal was the same as one N. V. Bani who was an employee of the assessee at Bombay from the order of the Income-tax Officer passed on the 15th March, 1957, and thereafter there was no scope for further enquiry by the assessee nor an opportunity to counter that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see made a grievance of it before this court by raising any question in respect of denial of opportunity to it. Therefore, it is not open to the assessee to canvass that point in this reference. Secondly, it was urged that there has been in fact no denial of any opportunity. As regards the contention on the merits, counsel on behalf of the department urged that the finding is a pure finding of fact reached concurrently by the three authorities below and that they have taken into account all the relevant circumstances. Such a finding does not give rise to any question of law and cannot be interfered with. A number of authorities have been cited on one or the other of the circumstances relied on by either party and on the question of burden of proof, which we shall presently discuss. The principal material or evidence upon which the decisions of the two tax authorities as well as the Tribunal have been based is, firstly, the letter dated 18th February, 1955, written by the manager of the Punjab National Bank, Kalbadevi Branoh, to the Income-tax Officer in answer to his queries. The -ther is the letter of 9th March, 1957, also written by the manager of the bank to the assessee in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------------- RECD.CASH " I request you to make the payment by wire entirely at my risk and on my responsibility and on the distinct understanding that no liability whatsoever is attached to the bank for any loss, injury or damage arising or resulting from delay in transmission, delivery or non-delivery, of the telegraphic message or for any mistake, omission or error in the transmission or delivery thereof or in deciphering the message or from whatever cause so ever or from its misinter pretation when received. -------------------------------------------------------------------------------------------------------------------------------------------------- PUNJAB NATIONAL Tilokchand, BANK, Broadway, c/o. M/s. K. Chellaram, Madras. 181, Mount Road, Applicant. RECIEVED 15th October, 1946. Rupees one lakh seven thousand three hundred and sixty-nine 14/6 Sd. Accountant. Wired and confirmed Sd. S. Rajagopalan, Manager." The contention is that the remittance is by one Tilokchand whose address is merely given as c/o. Messrs. K. Chellaram and that, therefore, on the face of it the application for the telegraphic transfer indicates that it was not Messrs. K. Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aph 7 of the Tribunal's order that the fact that the remittance from Madras was received by an employee of the assessee in Bombay is not disputed. Indeed, the very question which has been framed for our decision postulates that the remitter as well as the payee of this remittance were both employees of Kishinchand Chellaram, the assessee. That is, therefore, an important circumstance which will have to be taken into account in weighing the probabilities. The amount remitted, moreover, is a fairly substantial amount of Rs. 1,07,350. It is a very large amount and the least that we can say is that it was probably not within the capacity of the two employees of the assessee to own that amount and remit it. On the other hand, it is only possible for a well-to-do business like that of the assessee to own such an amount and have it remitted by telegraphic transfer. This fact, taken in conjunction with the other fact that both the remitter and the payee were employees of the assessee, makes the probability, that it was the mone -of the assessee, very strong. Thirdly, the address given of the remitter as well as of the payee is the address of the assessee's business both at Madras and at Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the remitter. There is not an iota of evidence to suggest that the assessee made any enquiries as to the whereabouts of these persons who were their employees. There is also nothing to show that the assessee made any enquiry from the bank manager other than what has been stated in their letter of 7th March, 1957, wherein all that they had asked was the full name and address of the person to whom the payment was made by the bank and the name of the bank in Madras through whom the telegraphic transfer was received. There is no doubt that the person who took away the cash from the bank at Bombay must either have been known to an officer or other employee of the bank or the bank must have sought identification of the person before they paid that person so large an amount, but no attempt seems to have been made to ascertain who identified him in the bank at that time. In the appeal before the Appellate Assistant Commissioner it was known to the assessee that the department sought to connect Nathirmilal who had encashed the telegraphic transfer with one N. V. Bani, who was their employee, but there is nothing to show that any attempt was made to find out N.V. Bani and examine him. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the tax authorities declined to accept the explanation of the assessee and held that the entire amount represented by these notes was the assessee's income from undisclosed sources. The Tribunal accepted the assesssee's explanation in regard to 31 notes and directed that the assessment against the assessee should be reduced by that amount. The High Court held that there was material before the Tribunal to hold that the sum of Rs. 30,000 represented the income of the appellants from undisclosed sources and, therefore, affirmed the order of the. Tribunal. The Supreme Court pointed out that, as the cash book of the appellants had been accepted and the entries therein were not challenged, nor further accounts or vouchers called for, nor the persons who gave the affidavits cross-examined, it was no longer open to the revenue to challenge the correctness of the cash book of the assessee. They also held that an explanation which was accepted as regards the 31 notes and rejected as regards the 30 notes, was based on pure surmise and since the assessee had furnished a reasonable explanation for the possession of the 61 notes there was no justification for having accepted their explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding in the present case is based on any suspicions, conjectures or surmises, nor do we think that any irrelevant circumstance has been taken into consideration. Several cases were cited for the proposition that where a finding of the Tribunal is not supported by any evidence at all, it gives rise to a question of law and the finding must be set aside. The principle is well-settled, but in the present case as we have shown not only is there ample evidence or other material relevant for consideration, which has been taken into account, but upon that evidence and that material the only conclusion possible was that the amount remitted in the instant case from Madras to Bombay belonged to the assessee. We need not, therefore, discuss these cases individually. It was also strenuously urged on behalf of the assessee that in the past large sums of money had been transferred by the assessee from Madras to Bombay and that all these amounts have been found mentioned in the accounts and it is, therefore, very unlikely that only one amount should not be mentioned. That shows that the amount has nothing to do with the assessee's business and, therefore, naturally would not find place in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances as we have discussed above is clearly to support the conclusion of the Tribunal. We have already said that we do not find that they have taken into account any irrelevant considerations or matters of prejudice or based their findings on any conjectures, surmises or suspicions. Then we turn to the other contention advanced by Mr. Advani. The principal pieces of evidence in this case are the two letters dated 18th February, 1955, and 9th March, 1957, written by the bank manager to the Income-tax Officer and the assessee, respectively. We have already dealt with the attack against these two letters. It was further contended that there was no opportunity afforded to the assessee to counter the two letters, and we proceed to examine this contention. So far as the letter of 18th February, 1955, is concerned, that letter is not on the record, nor has a copy been furnished to us. An extract from it, however, was quoted verbatim in the order of the Appellate Assistant Commissioner in paragraph 3 and the same passage from that letter has been quoted in paragraph 2 of the statement of the case. No objection appears to have been taken at any stage that since the whole of the letter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the high denomination notes. That plea was not raised before the Tribunal, and the validity of the conclusion of the Tribunal on appreciation of evidence cannot be assailed before the High Court on the ground that departmental authorities had violated the basic rules of natural justice without raising that question before the Tribunal." The objection taken before us is also an objection on the ground of failure to observe the rules of natural justice and we think, therefore, that we must rule out the objection on the short ground that it was never taken before the Tribunal. At the hearing before us a copy of the letter dated 17th December, 1959, written by the manager of the Punjab National Bank to the Appellate Assistant Commissioner was produced as also the telegraphic transfer application dated 15th October, 1946. The Appellate Assistant Commissioner forwarded both these to the assessee by his letter dated 29th December, 1959, bearing No. GCAP-94 of 1957-58. The letter states : " The above appeal was heard 21st November, 1959, and in view of the arguments placed by your representative a summons with a covering letter was issued to the Manager, Punjab National Bank, Arm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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