The Commissioner of Income Tax and The Deputy Commissioner of Income Tax vs Sri Dheeraj Daga

N.K. Patil, J.—This appeal by the Revenue is arising out of the impugned order dated 30th December 2005 passed in IT (SS)A No. 142/Bang/2002 by the Income Tax Appellate Tribunal, Bangalore, for consideration of the following substantial questions of law.

(i) Whether the Appellate Authorities were correct in shifting the burden of proving the payment of cash of Rs. 69 lakhs by the assessee and failed to take into consideration Section 132(4) of the Act that any document found in the possession of the assessee during the course of search is presumed to be the document of the assessee and additions made by the Assessing Officer on the basis of the said documents are correct.

(ii) Whether the Appellate Authorities were correct in revising the finding of the Assessing Officer that Rs. 69 lakhs undisclosed investment was made by the assessee to purchase office space at H.N. Towers, based on the notice in the seized material and the admission made by the assessee during search.

The facts in brief are, the assessee is carrying on the business in Polymers, FVC compounds, pipes etc., and a search was conducted in the premises of the assessed on 5.2.2001 u/s 132 of the Act. During the course of search, incriminating documents were found in the possession of the assessee and therefore, notice was issued u/s 158BC of the Act, requesting to furnish return of income for the block period. In response to the said notice, assessee has filed block return admitting Nil undisclosed income. One of the documents which were seized from the assessee discloses that he had paid a sum of Rs. 69 Lakhs in cash for purchase of an office premises. The statement of the assessee was recorded and he has admitted the document evidencing payment of Rs. 69 lakhs as his undisclosed income. But on verification of the return filed by the assessee, the said sum was not declared. Therefore, the Assessing Officer after recording the statement, after going through the relevant material and after affording reasonable opportunity has proceeded to pass the Order of Assessment on 28.3.2002. Assailing the correctness of the said order, the respondent has filed an appeal before the First Appellate Authority the Commissioner of Income Tax (Appeals). The First Appellate Authority after hearing both sides and after considering the order passed by the Assessing Officer, has confirmed the order of the Assessing Officer. Being aggrieved by the order of the First Appellate Authority and the Assessing Officer, the appellants have filed an appeal before the Income Tax Appellate Tribunal, Bangalore Bench, (Tribunal'' for short) in IT(SS)A No. 142/BANG/2002 for the Block Assessment Year 1991-92 to 2000-01. The said matter came up for consideration before the Tribunal and the Tribunal, in turn, after hearing both sides, after considering the material available on file and after going through the orders passed by the Assessing Officer and the Commissioner of Income Tax (Appeals), has dismissed the said appeal. Against the order passed by the Tribunal, the appellants herein have presented this appeal, seeking appropriate reliefs as stated supra.

We have heard the learned Counsel for the appellants and learned Counsel for the respondent at considerable length of time.

After perusal of the orders passed by the Assessing Officer, the Commissioner of Income Tax (Appeals) and the Tribunal, it is manifest on the face of the same that, all the three authorities have committed an error, much less irregularity in passing the orders contrary to the material on record and the admission made by the assessee. No specific finding as such has been recorded by them in consonance with the material available on file. Therefore, in view of not conducting the enquiry and not deciding the same in strict compliance of the relevant provisions of the Act and Rules, we do not find any justification or good grounds to sustain the orders passed by all the authorities. Therefore, without going into further merits and demerits of the case, it would suffice for this Court to set aside the orders passed by the authorities.

Having regard to the facts and circumstances of the case as stated above, the instant appeal filed by appellants is allowed.

The impugned order dated 30th December 2005 passed by the Tribunal in No. IT (SS)A No. 142/Bang/2002; the order dated 15th May 2002 passed by the Commissioner of Income Tax (Appeals) Bangalore in ITA No. 71/CC-1(3)/CIT(A)-VI/2002-03 and the Assessment order dated 28th March 2002 passed by the Assessing Officer, vide Annexures-A, B and C respectively, are hereby set aside and the matter stands remitted back to the Assessing Officer, for reconsideration afresh and to pass appropriate order, in accordance with law, on merits of the case, after affording reasonable opportunity of hearing to the respective parties, either personally or through their counsel and dispose of the same, as expeditiously as possible.

In view of remanding the matter to the Assessing Officer, it is not necessary to answer the substantial questions of law raised by appellants.