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TMI Blog1989 (3) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... n was not absolute and it was made subject to the further conditions imposed under Section 12A of the Income-tax Act. The conditions prescribed under Section 12A are, to quote from its own language: (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later: Provided that the Commissioner may, in his discretion, admit an application for the registration of any trust or institution after the expiry of the period aforesaid; (b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of Section 11 and Section 12 exceeds twenty-five thousand rupees in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below Sub-section (2) of Section 288 and the person in receipt of the income furnishes along with the return of income for the relevant asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , M/s Khare Associates admitted to have relied on the audit report of M/s Lovelock Lewis. This being the position I must observe that the appellant association in obtaining the prescribed particulars being annexures to form No. 10B from an Accountant who had not audited their accounts failed to satisfy the requirements of Section 12A of the Act. I have, therefore, no hesitation in confirming the action of the IAC (Asst.) in denying to the appellant association the benefit of Section 11. 4. Against this view of the department, Shri Khare appearing for the assessee submitted that the view expressed by the department is not borne out by the language of Section 12A(b) or form No. 10B. The requirement of Clause (5) of Section 12A is only that the accounts of the trust must be audited by a Chartered Accountant and that the return should be accompanied by a certificate given-by him in the prescribed form containing the prescribed particulars. There is no condition that the statutory auditor alone should conduct the audit also for the purposes of Clause (b) of Section 12A. If the audit for the purpose of Clause (b) is conducted by a Chartered Accountant, who furnishes a report in the presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct the audit according to the principles of auditing, which are not enshrined in any Statute except by conventions developed as to the verification of the income, the expenditure, the assets, the liabilities and the preparation of statement of accounts and furnish a report but that report must- be in the prescribed form setting forth such particulars as may be prescribed in form No. 10B and duly signed and verified by him. There is no compromise in this area of certification. Therefore the expression such accountant used in Clause (b) of Section 12A refers only to the accountant prescribed in the Explanation below Sub-section (2) of Section 288. It is thus clear that the audit of the accounts of the trust can be by one auditor and the certificate of it under Section 12A can be by another auditor only after auditing the accounts, All that the Clause (b) provides for is that the Chartered Accountant, who conducted the audit must give a certificate as is expected of him in the proscribed form containing the prescribed particulars. If a Chartered Accountant does not conduct an audit but gives a certificate in the prescribed form containing such particulars as may be prescribed duly si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises, that there was no negligence on his part in performing his duties and if as a consequence of such a reliance, negligence results and that negligence causes a loss or injury to the users of those statements certified by him, then again he will be liable for defending himself against negligence and if unable to prove, for misconduct and disciplinary proceedings under the Chartered Accountant Regulation Act of 1949 would ensue. Thus the Chartered Accountant, who relies upon the certificate given by another Chartered Accountant, takes the risk of exposing himself to a charge of negligence in the performance of his duties. But that does not mean that the certificate given by him is not a valid certificate unless the contrary is proved. Therefore the expression . such accountant merely describes the Chartered Accountant, who is to furnish the certificate and it does not suggest that the statutory auditor alone is entitled to give the certificate required under Clause (b) and no one else. It is open to a trust or to an institution to have its accounts audited for the purpose of the management or to satisfy the requirements of other enactments by one Chartered Accountant and to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited before 1-4-1983 otherwise than in any one or more of the forms or modes specified in Sub-section (5) of Section 11 continue to remain so invested or deposited after 30-11-1983. Since these shares were admittedly not in the form or mode prescribed under Section 11(5) and they continued to be held in that form even after 30-11-1983, the Inspecting Asstt. Commissioner held that the assessee had violated its investment portfolio and therefore not entitled to the exemption under Section 11. The assessee-trust submitted that even though it made efforts up to 29-11-1983 to sell the shares in the market, it did not get any appropriate price, with the result it could not unload itself of those shares. This submission did not find favour with the Inspecting Asstt. Commissioner. 8. In further appeal before the Commissioner (A), the same view was taken by him also. Reliance was placed before the Commissioner (A) on a circular given by the C.B.D.T. in Circular No. 387 dated 6-7-1987 to justify the action of the assessee-trust for the lenient view. The Commissioner (A) by quoting the circular in full in his order distinguished it and held that that circular did not apply and that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case having been allowed ample opportunity to present its case in all its aspects before the authorities below, should not now be allowed a further opportunity to produce documents and then ask for adjudication of its matter on the basis of those documents. The parties under the rule have no inherent right to produce additional evidence either oral or documentary. Even the Tribunal can permit additional evidence to be considered only in exceptional cases mentioned in the rule, namely, if the Income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence or the Tribunal requires any document to be produced or any witness to be examined or for any other substantial cause. On the facts of this case, it cannot be said that the income-tax authorities decided the case without giving the assessee sufficient opportunity. The inability of the assessee to press its point cannot be considered a substantial cause for the Tribunal to interfere. It was in support of these arguments that reliance was placed on the cases referred to above. 11. Rule 29 of the Income-tax (Appellate) Tribunal Rules, on which both the parties placed their rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. It has, however, vested a discretion and power in the Tribunal to admit additional evidence, if it so requires or for a substantial cause or if the Income-tax Officer had decided the case without giving fresh opportunity to the assessee to adduce evidence. Then it laid down that a party desiring to adduce additional evidence having a decisive or clinching value with reference to the points at issue may, however, invite the Tribunal to invoke its power under Rule 29 on the ground that the evidence was not available earlier or the party was prevented from adducing it before the authorities below or for any other substantial cause. Then it pointed out that a clear and specific pleading in support of the claim for allowing additional evidence must be made out by a notice to the other side. 12. We have therefore to examine whether the ambit and scope of Rule 29 of the Income-tax (Appellate) Tribunal Rules, 1963, as explained by the Allahabad High Court, applies to the facts of the case before us. This is not a case where the assessee has pleaded that there was lack of evidence but the point made out by the learned counsel for the assessee was so decisive and of clinching value with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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