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TMI Blog2019 (8) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... and clarity. 4. Impugned order has been made under Section 143 (3) of the Income Tax Act, 1961 ('IT Act' for brevity), pursuant to order of remand made by the 'Income Tax Appellate Tribunal', Chennai ('ITAT' for brevity) vide order dated 27.09.2017 in a statutory Income Tax Appeal being ITA No.1956/Mds/2017. To be noted, this statutory appeal before ITAT is under Section 254 of IT Act and therefore, for all practical purposes impugned order has been made under Section 143(3) of IT Act read with Section 254 of IT Act. 5. Short facts shorn of micro details/particulars are that the writ petitioner assessee made two donations in said AY. One is Rs. 20 lakhs in favour of one 'Herbicure Healthcare Bio-Herbal Research Foundation' (hereinafter 'Herbicure Foundation' for brevity) and another is Rs. 3 lakhs in favour of 'School of Human Genetics and Population Health' (hereinafter 'Genetics School' for brevity). 6. According to writ petitioner assessee, these two donations are eligible for exemption under Section 35(1)(ii) of IT Act. However, vide an order of assessment dated 29.3.2016, these two donations were held to be not eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at one of the institutions, namely, School of Human Genetics and Population Health moved the Settlement Commission and admitted that they have provided accommodation entries in respect of bogus donations received by them. Similarly, the Director of Herbicure Healthcare Bio Herbal Research Foundation has also admitted to have given accommodation entries after receiving commission. The Assessing Officer after reproducing the statement recorded from the respective persons, has concluded that the claim of donation more than 50% of profit was far-fetched one. 7. Now the issue before this Tribunal is whether the assessee is entitled to receive copy of statement and other material which were relied upon by the Assessing Officer in the assessment order? The Revenue claims that as per Office Manual/ procedure, unless a request was received from the assessee for furnishing of copy of statement and other documents, the Revenue need not provided such statement and documents. The fact remains that the proceeding before the Assessing Officer is a judicial proceeding under Section 136 of the Act. When a statement or other material collected by the Assessing Officer or other income-tax aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the respondent responded by way of communication dated 10.09.2018 and this was followed by exchange of another set of communication between writ petitioner and respondent assessee. This is letter dated 12.10.2018 from the writ petitioner assessee and response to the same from the respondent assessee vide communication is dated 13.11.2018. To capture the sum and substance of these communications between writ petitioner and respondent post remand, this Court considers it appropriate to extract relevant portions from the said communications and the most relevant portions of 27.08.2018 letter from the writ petitioner are contained in paragraph-5 and the next paragraph and the same read as under: '5. No mention about the receipt of bogus donation from M/s.Marina Shipbrokers in the sworn statement submitted by Mrs.Samdrita Mukherjee Sardar: a. As per the copies of survey report enclosed with the letter to us we would like to state that on perusal of the sworn statement of Mrs.Samdrita Mukherjee Sardar, there is no mention about the receipt of Bogus donation from us (M/s.Marina Shipbrokers), hence we would like to seek as to how your goodself offices came to conclusion that we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , hence the entire documents cannot be furnished.' 11. This takes us to the next set of communications and with regard to 12.10.2018 communication from the writ petitioner, relevant portion reads as under: 'Kindly provide us with the following as per the directions of the Hon ITAT: Copy of the investigation report conducted by your good self which clearly implicates US and also establishes that the donation made were bogus in nature. As per the Principle of Natural Justice, we request you to provide us with an opportunity to cross examine the parties whose sworn statements are being used to implicate US. Failure to carry out the thorough investigation as per the directions of Hon ITAT will be construed as the contempt of the Court, hence we request you to carry out thorough investigation and provide us with the evidence to prove that the decision to pass an adverse order against us is Justifiable.' 12. Writ petitioner responded vide 13.11.2018 reply and the same reads as under: 'The Hon'ble ITAT vide their order dated 27.09.2017, has categorically directed the Assessing Officer to provide the documents relied upon and not anything beyond that. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khan case was pressed into service by learned counsel on this basis. The principle in Khader Khan's case is that a statement made under Section 133A of IT Act does not have evidentiary value as an Officer of the Income Tax Department is not authorized to administer oath and take any sworn statement. Relying on Khader Khan principle, it was submitted that the sworn statement made by two individuals in the instant case, namely, Secretary of Genetics School and Founder Director of Healthcare Foundation does not have any evidentiary value and therefore the respondent assessee ought not to have relied on the same without giving an opportunity to the writ petitioner to crossexamine the two individuals. Furthering his argument in this direction, learned counsel for writ petitioner referred to relevant portions of the Survey Report which was furnished to the writ petitioner post remand by ITAT and submitted that Founder Director of Healthcare Foundation has deposed that the accommodation of bogus donations was facilitated by one Kishan Bhawasingka. It was submitted that neither Kishan Bhawasingka's statement was furnished to the writ petitioner nor any cross-examination permitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after deduction of commission by the entry provider at various stages.' 22. Adverting to the aforesaid scenario, learned Revenue Counsel submitted that this is not a case of improving the impugned order by way of a counter-affidavit as even in the earlier round, it was clearly put against the writ petitioner that donations were routed back to the writ petitioner and this remains unrefuted. 23. Responding to the above, learned counsel for writ petitioner submitted that they will now be in a position to refute and demonstrate that there was no routing back. This, in the considered opinion of this Court, turns on factual aspects of the case. 24. In this regard, learned counsel for writ petitioner pointed out that a statutory appeal remedy is available to the writ petitioner, by way of a statutory appeal to the Commissioner of Income Tax Appeals under Section 246A of IT Act. A perusal of Section 246A of IT Act reveals that the instant case will fall under Section 246A(1)(a). 25. Before adverting to alternate remedy, it is also necessary to notice that the question of permitting cross-examination will turn heavily on the facts and circumstances of each case. In the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The [Commissioner (Appeals)] may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the [Commissioner (Appeals)].' 28. A perusal of sub-section (4) of Section 250 of IT Act makes it clear that the Statutory Appellate Authority namely CIT-A has powers to make further inquiry by himself or direct the Assessing Officer to make further inquiry, report the result and thereafter dispose of the statutory appeal on the basis of such inquiry conducted by himself or on the basis of post inquiry report from the Assessing Officer in this regard. 29. In the light of sub-section (4) of Section 250, it is clear that if the writ petitioner is relegated to alternate remedy of appeal under Section 246A(1)(a) of IT Act, in the instant case, the appeal will not be ineffectual or not efficacious. In other words, the appeal has ample and adequate scope to permit the writ petitioner to raise this issue of cross-examination and the Appellate Authority can also look into the same in the light of factual disputes pertaining to the factual issue of re-routing and thereafter decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutory remedies are available are not such matters. We can also take judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged. 4. In Union of India v. Oswal Woollen Mills Ltd. [(1984) 2 SCC 646 : 1984 SCC (Cri) 348] we had occasion to consider an interim order passed by the Calcutta High Court in regard to a matter no part of the cause of action relating to which appeared to arise within the jurisdiction of the Calcutta High Court. In that case the interim order practically granted the very prayers in the writ petition. We were forced to observe: [SCC para 4, pp. 649-50: SCC (Cri) p. 352] "It is obvious that the interim order is of a drastic character with a great potential for mischief. The principal prayer in the writ petition is the challenge to the order made or proposed to be made under clause 8-B of the Import Control Order. The interim order in terms of prayers (j) and (k) has the effect of practically allowing the writ petition at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers reported in (2010) 8 SCC 110] and K.C.Mathew case [Authorized Officer, State Bank of Travancore Vs. Mathew K.C. reported in (2018) 3 SCC 85] were restated. To be noted, Satyawati Tondon principle was reiterated in latter of the two i.e., K.C.Mathew. In Satyawati Tondon case and K.C.Mathew case regarding rule of alternate remedy, the principle that such a rule, though a rule of discretion and not a rule of compulsion, should be exercised with greater rigour in fiscal law statutes has been laid down. More importantly, in Satyawati Tondon case, Hon'ble Supreme Court held that such a rule has to be applied with utmost rigour when it comes to cases involving taxes, cess, fees etc., In other words, when it comes to fiscal statutes, these rules have to be applied with greater rigour and it is to be applied very strictly with regard to recovery of taxes, CESS, fess etc., Relevant paragraph in K.C.Mathew case (cited supra) is paragraph 10 and the same reads as follows: '10. In Satyawati Tondon the High Court had restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, the availability of remed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute can also be gone into by CIT-A for taking a decision on writ petitioner's request for cross-examination. 35. With regard to the alternate remedy of statutory appeal before CIT-A under Section 246A(1)(a) of IT Act in the instant case, the same has to be filed within 30 days from the date of service of notice of demand. In the instant case, the notice of demand as per usual practice was served along with the impugned order dated 29.11.2018 and it was served on the writ petitioner on 24.12.2018. Before the expiry of 30 days therefrom, instant writ petition has been presented before this Court on 22.01.2019. Therefore, this Court deems it appropriate to exclude the period spent by the writ petitioner in the instant writ petition i.e., the period from 22.01.2019 to the date on which copy of this order is made available, by applying the principle adumbrated in Section 14 of Limitation Act. 36. Notwithstanding such exclusion, even if delay occurs, the same is condonable under Section 249(3) of IT Act and there is no cap for the same. The power to condone the delay is vested with CITA. If the need arises to the writ petitioner to seek condonation of delay, notwithstanding exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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