Patna H.C : The same represented concealed income of the assessee in the absence of satisfactory explanation in respect thereof which was not forthcoming from the assessee

High Court Of Patna

CIT vs. S.P. Viz Construction Co. (No. 2)

Sections 153(1)(b), 139(5), 129, 271(1)(c)

D.K. Sen, C.J. & S. Ali Ahmad, J.

Taxation Case No. 104 of 1978

11th October, 1988

Counsel Appeared

Vidhyarthi & S.K. Sharan, for the Revenue : None appeared for the Assessee

K. SEN, C.J. :

The material facts and circumstances and the questions of law raised in the present reference are almost identical with those in Taxation Case No. 172 of 1978 which is a reference in the case of the same assessee for the earlier asst. yr. 1968-69. The said Taxation Case No. 172 of 1978 [CIT vs. S. P. Viz Construction Co. (No. 1) (1989) 79 CTR (Pat) 125 : (1989) 176 ITR 34] has been decided by our judgment and order passed earlier today.

2. The difference in facts between the present reference and the earlier one in Tax Case No. 172 of 1978 [(1989) 176 ITR 34 ] is, inter alia, that it was contended before the AAC on behalf of the Revenue that the records and the statements in the proceedings indicated fresh investments or cash credits in the names of the partners of the assessee which raised a prima facie presumption that the same represented concealed income of the assessee in the absence of satisfactory explanation in respect thereof which was not forthcoming from the assessee. Further, in the instant case, the successor ITO had issued a fresh notice under ss. 143(2) and 142(1) of the IT Act, 1961, on the assessee on February 1, 1973, fixing a date for fresh hearing on February 19, 1973. It was recorded that the representative of the assessee appeared before the successor ITO on February 19, 1973. It was contended before the AAC and the Tribunal that the period from February 1, 1973, till February 19, 1973, should be excluded in computing the period of limitation. The AAC accepted this contention while the Tribunal rejected it. It appears to me that the aforesaid facts do not make any difference to the legal position inasmuch as the Tribunal has ignored the alleged discovery of the said unexplained cash credits or investments of the assessee on the ground that the same had not been recorded in the order of assessment and was only urged in the appeal before the AAC. I also note that the AAC had not recorded any finding relating to the said unexplained cash credits or investments.

On the fresh notice issued by the successor ITO on February 1, 1973, the Tribunal has found that the successor ITO was under no obligation either to reopen the proceeding or to rehear the assessee, unless a demand came from the assessee. The Tribunal has also doubted the genuineness of the entry in the file of the ITO dated February 19, 1973, where it was recorded that the case was heard at the assessee’s request. The Tribunal found that the said entry was in a different ink. The Tribunal has also found that there was no demand from the assessee either for rehearing or for reopening of the proceedings. No finding of fact by the Tribunal has been challenged by an appropriate question.

Following our judgment and order in Taxation Case No. 172 of 1978,(supra), I answer the question referred in the affirmative and in favour of the assessee. There will, however, be no order as to costs.

Let a copy of this judgment and order be sent to the Assistant Registrar of the Tribunal, Patna, in compliance with s. 260 of the IT Act, 1961.

S. ALI AHMAD, J.

I agree.

[Citation : 176 ITR 44]

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