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TMI Blog2003 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... al to the interests of the Revenue?" During the course of hearing of this tax appeal, one more substantial question of law is proposed to be raised by Mr. Pranav G. Desai, learned counsel appearing for the Department, which is as under; "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal is right in law in relying upon the affidavit of the assessee retracting confession at its face value and not considering voluntary confession of disclosure made on oath before the authorities in the presence of witnesses?" The brief facts, giving rise to the present tax appeal are as follows. The respondent-assessee herein was intercepted on January 29, 1998, at Santa Cruz Airport and was searched under section 132 of the Act. He was found to be in possession of cash worth Rs. 20 lakhs which was seized. His statement on oath was recorded under section 132(4) of the Act on the same date, i.e., January 29, 1998, wherein he has stated that the cash seized was out of his undisclosed income and the same was being offered for taxation in the current year being the financial year 1997-98. The said declaration of income of Rs. 20 lakhs was stated to have been made vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the disclosure made under the Voluntary Disclosure of Income Scheme only and the sum of Rs. 40 lakhs was credited in the cash book of Halar Maritime Agencies. The computer printouts of the respondent-assessee's books were given after the assessment order was passed and therefore the Assessing Officer did not verify the correctness of the respondent-assessee's contentions that the statement on the day of search was given under pressure and that there was no inquiry as to why the respondent-assessee was carrying so much cash with him and hence the order under section 158BC suffered from the vice of lack of inquiry and non-application of mind. Accordingly, the Commissioner of Income-tax had directed vide his order dated March 27, 2001, to treat the seized cash of Rs. 20 lakhs as undisclosed income and subject it to tax. Being aggrieved by the said order of the Commissioner of Income-tax, Jamnagar, the respondent-assessee filed an appeal before the Income-tax Appellate Tribunal, Rajkot Bench, Rajkot, being Appeal No. 5/RJT of 2001. It was contended by the respondent-assessee before the Income-tax Appellate Tribunal that the respondent-assessee is a retired "Navy" Captain and he cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-assessee must be wanting to get released as soon as possible to attend to his Chennai engagements and the pressure along with the sudden interception could have triggered a thought to accept Rs. 20 lakhs as undisclosed income. He has further submitted that the Income-tax Appellate Tribunal has erroneously jumped to the conclusion that much credence should not be given to the admission made by the respondent-assessee at the time of search and/or recording his statement under section 132(4) of the Act. The Income-tax Appellate Tribunal has also materially erred in accepting the explanation given by the respondent-assessee in the affidavit branding it as a palatable explanation. Mr. Desai has also objected to the finding given by the Income-tax Appellate Tribunal to the effect that there was no infirmity in the conclusion of the Assessing Officer and that it was not true to say that there was lack of inquiry or non-application of mind on the part of the Assessing Officer. Mr. Desai has further submitted that the Income-tax Appellate Tribunal has committed a very serious error in law in arriving at the conclusion that none of the reasons given by the Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the respondent-assessee should not be given undue importance as it was not a formal search in the sense that it was not at the place of residence or at the business place but was at the airport and it had taken nearly 3 and 112 hours to record the statement. He has further submitted that no adverse inference should be drawn from the fact that the computer print-outs of the account books were furnished after the assessment order was passed inasmuch as that the original handwritten account books were examined by the Assessing Officer. Mr. Kaji has further submitted that the Income-tax Appellate Tribunal has taken pains to appreciate and analyse the order passed by the Commissioner of Income-tax and observed that the Commissioner of Income-tax has given mainly four reasons for holding the assessment order to be erroneous. The Income-tax Appellate Tribunal was of the view that the affidavit filed by the respondent-assessee retracting his earlier statement could not be brushed aside. With regard to supplementary cash book, computer print-outs, non-verification of reasons to carry the huge sum of cash by the respondent-assessee, etc., were also taken due care of and explained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the Revenue' is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. Having regard to the facts and circumstances of the case, it cannot be said that the view taken by the Assessing Officer to the effect that the seized cash of Rs. 20 lakhs formed part of the amount of Rs. 40 lakhs disclosed by the respondent-assessee under the Voluntary Disclosure of Income Scheme is a view unsustainable in law. Simply because the Commissioner of Income-tax does not agree with the view, it cannot be said that the order passed by the Assessing Officer is an erroneous order prejudicial to the interests of the Revenue. In view of the facts and circumstances of the case and in view of the observations made hereinabove, we are of the view that no question of law, much less any substantial question of law arises out of the order of the Tribunal and hence the present tax appeal is dismissed with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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