High Court Of Allahabad
Sarika Jain vs. CIT
Pankaj Mithal & Umesh Chandra Tripathi, JJ.
Section 69-A, 148, 260-A
Asst. Year 2001-02
ITA No. 435 of 2008
18th July, 2017
Rakesh Ranjan Agarwal, Sayush Agarwal for the Appellant.: Piyush Agrawal for the Respondent
Pankaj Mithal & Umesh Chandra Tripathi, JJ.
Heard Sri Suyuash Agarwal, learned counsel for the appellant-assessee and Sri Piyush Agarwal, learned counsel for the Revenue.
The appellant-assessee by this Income Tax Appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter refereed as the “Act”) has challenged the order of the Income Tax Appellate Tribunal dated 20.12.2007.
The short question of law, which has been raised in this appeal is whether the Income Tax Appellate Tribunal was justified in adding a sum of Rs.12,20,000/-, alleged to have been received by the appellant-assessee as gift as his income under Section 69-A of the Act after deleting the said addition as made by the Assessing Officer and confirmed by the CIT (Appeals) under Section 68 of the Act.
The brief facts giving rise to the present appeal are that the appellant-assessee is a partner in the firm M/s S.J. Transformers and has inducted capital of Rs.12,20,000/-in the relevant assessment year 2001-02.
The assessment of the said year 2001-02 was completed and proceedings for re-assessment were initiated under Section 148 and a notice was given to the petitioner to explain the source of the above capital as inducted in the partnership.
In reply to the said notice, petitioner submitted that he had received a gift of Rs.5,00,000/from one Sri Manish Kumar Kapoor and Rs. 7,20,000/-from one Smt. Zakkan Begum. The gifts were received through banking channel. In order to prove the aforesaid gift transactions, gift deeds were also produced before the authorities. The statement of the two doners were also recorded under Section 131 of the Act and they proved the factum of the gift.
The Assessing Officer however held that the gifts are not genuine as there were held to be unnatural and the aforesaid amount was added as the undisclosed income of the appellantassessee under Section 68 of the Act.
The Commissioner of Appeals affirmed the said order and recorded findings that the documentation in respect of the gifts are complete and the appellant-assessee has established the identity of the doners and their credit worthiness to make gifts of the said amount but again CIT (Appeals) refused the acknowledge of the said gift as there were not found to be genuine.
In appeal to the Tribunal, it has been held that the addition made by the Assessing Officer under Section 68 of the Act and sustained by the CIT (Appeals) cannot be sustained. Thereafter, the Tribunal proceeded to add the aforesaid amount as the income of the appellant-assessee under Section 69-A of the Act.
It is aggrieved by such addition under Section 69-A of the Act that the appellant-assessee has preferred this appeal.
The submission of Sri Suyash Agarwal, learned counsel for the appellant-assessee is that all through the case of the parties is as to whether the aforesaid amount alleged to have been received by the appellant-assessee is liable to be added under Section 68 of the Act and the question of addition under Section 69-A was never there. Therefore, the Tribunal has erred in making addition under Section 69-A of the Act.
Sri Piyush Agarwal admits that before the Assessing Officer as well as CIT (Appeals) and the Tribunal, the dispute was as regarding the addition of the amount alleged to have been received in gift by the appellant-assessee under Section 68 of the Act and nothing else.
The relevant sub-section (1) of Section 254 of the Act reads as under :
“254. Orders of Appellate Tribunal. 254 (1). The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.” (Emphasis supplied).
A plain reading of the aforesaid Section reveals that the Appellate Tribunal has power to pass such orders thereon as it thinks fit.
The use of the word “thereon” is important and it reflects that the Tribunal has to confined itself to the questions, which are arising or are subject matter in the appeal and it cannot be travelled beyond the same. The power to pass such orders as the Tribunal thinks fit can be exercised only in relation to the matter that arises in the appeal and it is not open to the Tribunal to adjudicate any other question or an issue, which is not in dispute and which is not the subject matter of the dispute in appeal.
In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an addition can be made under Section 69-A of the Act.
In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that “it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant-assessee under Section 68 of the Act.
In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law.
Accordingly, we answer the question of law, as framed above, in favour of the appellantassessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it.
Accordingly, the impugned order dated 20.12.2007 is set aside and the matter is remanded to the Tribunal for deciding the appeal afresh in accordance with law.
The appeal is allowed.
[Citation : 407 ITR 254]