AI Structured Summary
Not yet generated for this judgment
Judgment
Mr. Satapathy, learned advocate, Senior Standing Counsel appears on behalf of appellant-revenue. He submits, the appeal was admitted by coordinate Bench on order dated 18th April, 2023. Additional substantial question of law needs to be framed.
The Commissioner of Income Tax (Appeals) [CIT (A)] found that sales from Gandhamardan Block-A was undisclosed. Applying the ongoing rate for sale of Calibrated Lump Ore (CLO), the Assessing Officer (AO) had, on reassessment, added Rs.46,69,00,000/-. Drawing attention to order dated 16th August, 2019 made by CIT(A) pertaining to assessment year 2016-17 Mr. Satapathy demonstrates that the Commissioner found the assessee could not render satisfaction that the stock sold subsequent to the decision of the Supreme Court were of inferior quality than those declared to be stocked at Gandhamardan Block-A. Hence, the suppressed stock was found to have been sold at aforesaid sum taking the prevalent rate for the CLO.
Against these findings on fact, the Tribunal by impugned order dated 21st June, 2022 erroneously held that it was not suppressed stock but accounted for stock in respect of Gandhamardan Block-B, stored in Gandhamardan Block-A. He submits, it would not appear from either the reassessment order or order of the CIT(A) that assessee had rendered satisfaction regarding sales made to M/s. Hardev Steels Ltd.. The otherwise finding by the Tribunal is perverse.
He relies on judgment of the Supreme Court in Hero Vinoth v. Seshammal, reported in (2006) 5 SCC 545, paragraph 16 (Manupatra print) reproduced below.
“16. It is now well settled that an inference of fact from a document is a question of fact. But the legal effect of the terms or a term of a document is a question of law. Construction of a document involving the application of a principle of law, is a question of law. Therefore, when there is a misconstruction of a document or wrong application of a principle of law while interpreting a document, it is open to interference under Section 100 CPC. If a document creating an easement by grant is construed as an ‘easement of necessity’ thereby materially affecting the decision in the case, certainly it gives rise to a substantial question of law.”
Mr. Ray, learned senior advocate appears on behalf of respondent-assessee and submits, the Tribunal is the last fact finding forum. It had found as fact that his client had satisfactorily explained existence of 4,02,000 MT of material in Gandhamardan Block-A as kept there but relating to disclosed stock at Gandhamardan Block-B. In the circumstances, the Tribunal’s further finding on fact that the stock at Gandhamardan Block was satisfactorily explained by his client and the addition correctly deleted. No question let alone substantial question of law arises from such findings of fact.
Mr. Ray relies on judgment of the Supreme Court in Santosh Hazari v. Purushottam Tiwari, reported in (2001) 3 SCC 179, paragraph 10 to submit, the requirement, even in section 100 in Code of Civil Procedure, 1908 is that a second appeal can only be admitted on a substantial question of law as opposed to a question of law. He reiterates, on finding of fact by the last fact finding forum, no question of law can arise.
The substantial question of law, on which the appeal stood admitted by coordinate Bench, is reproduced below.
“Whether the Income Tax Appellate Tribunal, Cuttack (in short, ITAT Cuttack Bench) had acted and decided the second appeal beyond the statutory scope while draw their inference on the ground that no substantial question of law was involved in the appeal and hence, the appeal was bound to be dismissed?”
On hearing the parties, we frame an additional substantial question for answer in the appeal.
Where there is reversal on a question of fact by the Tribunal, and in the facts and circumstances of this case is the finding of the Tribunal that respondent-assessee had satisfactorily explained suppression of stock alleged by the Assessing Officer (AO), is perverse?
List the appeal for hearing and disposal on 24th August, 2023.
…………………………….