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TMI Blog2019 (3) TMI 1550X X X X Extracts X X X X X X X X Extracts X X X X ..... in rejecting the materials before it. The Tribunal also erred in only relying upon the earlier order passed by the Income Tax Appellate Tribunal by which the matter was remanded vide order 02.03.2000 and the Tribunal while passing the subsequent order impugned before us on 30.06.2006 has taken note of the earlier remand order but still not accepting the request of the Revenue to remand the present case also back to the Assessing Authority, in case the Tribunal felt that the findings by the Assessing Authority were not sufficient. As far as acquittal of the accused persons in the Criminal Proceeding is concerned, it cannot be said to be amounting to automatic deletion of income, added in the hands of the Assessee in the present case under the Income Tax Act. Two proceedings, one under the Income Tax and another in Criminal prosecution operate in different fields and there is no doubt that the material collected during the course of criminal proceeding can also be used by the Authorities in the Income Tax proceedings also. But, the question is that the Appellate Authority should arrive at its own independent findings of fact on the basis of such material after issuing notice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessment are large and wide, but these cannot be exercised to allow the Assessing Officer an opportunity to patch up the weak part of his case and to fill up the omission. A party guilty of remissness and gross negligence is not entitled to indulgence being shown. Apart from the aforesaid which involved an addition of ₹ 1 crore, the learned Deputy Commissioner of Income- Tax has further made the addition of ₹ 6,27,850/- as follows:- Assessment year 1990-91 ₹ 2,16,274/- 1994-95 ₹ 2,67,200/- 1995-96 ₹ 1,44,280/- For addition for the Year 1990-91, the Deputy Commissioner of Income Tax has noted the assessee has not made any objection for the addition. For the next two additions, the Deputy Commissioner of Income Tax has noted that, The returns of income for the two years have been filed by the assessee after the date of search and after the expiry of the statutory time limit allowed under section 139. The decision of the Hon'ble Madras High Court in the case of V.Noorsingh Vs. UOI 105 Taxman 101 MAD is squarely applicable to the facts of the present case. 30. Considering the issue involved in this regard, we ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called for to repeat the following additionals made in the block assessment completed earlier relating to the asst.years 1990-91, 1994-95 and 1995-96 falling within the block period. Asst. year 1990-91 ₹ 2,16,274/- 1994-95 ₹ 2,67,200/- 1995-96 ₹ 1,44,280/p 15.2. In his letter dated 21.03.2002 the assessee has not raised any objection for the addition of ₹ 2,16,274/- for the asst. year 1990-91. For the assessment years 1994- 95 and 95-96, the assessee has stated that he has already filed the relevant years returns and paid taxes thereon has also objected to the assessment of the income admitted in these belated returns of income treating it as undisclosed income and cited three decisions of Appellate Tribunals. 15.3.The date of search in TNTC is 13.2.1996, consequent to which proceedings and under 158BD were initiated in the assessee's case. The returns of income for the two years has been filed by the assessee after the last of search and after the expiry of statutory time limit allowed under Section 139. The decision fo the Hon'ble Madras High Court in the case of Noorsingh vs.UCI 105 Taxman 101 MAD is squarely applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or from any of the departments that 96 Luz Church Road, Mylapore was in exclusive possession of A2 and therefore, charge against him must necessarily fail. 34.In order to establish loss to the Government, the Investigating Officer had filed statements IIA, IIB and IIC along with the charge sheet though it was not brought in evidence to show as to how much was the loss. 35.Further, in order to establish the fact that the sarees and dhoties supplied by 14 firms at inflated rates and inferior material, the prosecution relied on the evidences of PW.70, 71, 73, 75, 89, 90 and 48 and Ex.P57 and Mos. 1 and 2. 36.Regarding this non-examination of the one Balachandar from whom Mos 1 and 2 were seized coupled with PW.48 admission that no carbon dating test was performed to verify the age of Mos.1 and 2 is fatal to the prosecution case. The learned counsel for the appellant would submit that PW.70, 71, 73 and 74 supplied the materials in EX.P57 through PW.89 and 90 who in turn supplied materials to 2 of the 14 firms. However, PW.89 and 90 specifically stated that sarees and dhoties supplied to 2 of the firms were not sarees and dhoties brought from the above witnesses. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be set aside. The bail bonds if any shall stand cancelled. 41.Accordingly, all these appeals are allowed. 5 . The present Income Tax Appeal by Revenue was admitted by the Co-ordinate Bench of this Court on the following substantial questions of law: (i) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the information gathered by another investigating agency and confirmed by the Special Court as not sufficient basis for making addition under the Income Tax Act? (ii) Whether in the facts and circumstances of the case, the Tribunal was right in deleting the entire addition of undisclosed income of ₹ 1.06 Crores in the assessee's hands on the ground that the same material was available even prior to the remand, failing to see that the order of the Special Court was available to the assessing officer after remand, which confirms the involvement of the assessee in the textile scam? (iii) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the entire addition should be deleted as the assessment order was not in accordance with the earlier remand order of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, one under the Income Tax and another in Criminal prosecution operate in different fields and there is no doubt that the material collected during the course of criminal proceeding can also be used by the Authorities in the Income Tax proceedings also. But, the question is that the Appellate Authority should arrive at its own independent findings of fact on the basis of such material after issuing notice to the Assessee, giving him an opportunity to controvert the material against him. Therefore, mere acquittal of the Assessee along with other two co-accused by High Court, as quoted above cannot by itself result in setting aside of the assessment made by the Assessing authority in the present case. 11. In these circumstances we are of the opinion that the matter again deserves to be remanded back to the Assessing Authority for fresh enquiry in the matter. It is needless to say that the Assessing Authority will arrive at its own independent findings after considering the adverse materials available on its record giving to Assessee a due and reasonable opportunity of controverting the same and the Assessing authority may arrive at an independent findings of fact on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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