High Court Of Punjab & Haryana
Mahashwari Synthetics (P) Ltd. vs. CIT & Anr.
Section 254(1), 260A
Block period 1st April, 1986, to 30th Aug., 1996
Adarsh Kumar Goel & Mrs. Daya Chaudhary, JJ.
IT Appeal No.217 of 2009
11th August, 2009
Counsel appeared : Akshay Bhan, for the Appellant Order
By the court :
The assessee has preferred this appeal under s. 260A of the IT Act, 1961 (for short, “the Act”) against the order dt.
1st Sept., 2008, Annex. A4, passed by the Tribunal, Amritsar in IT(SS)A No. 9/Asr/2002 for the assessment period from 1st April, 1986 to 30th Aug., 1996, proposing to raise questions of law mentioned in para 20 of the appeal.
2. Learned counsel for the appellant presses following questions :
“(i) Whether in the facts and circumstances of the case, the Tribunal was justified in not taking a final view in the matter when all facts and figures were available before it, rather than again restoring the block assessment back to the AO, when the latter admittedly failed to abide by its directions as given in original order ?
(ii) That in the facts and circumstances of the case, was the Tribunal correct in holding that there was no judicial bias operating in this case qua the fact that despite Revenue’s appeal pending before the High Court, the undisclosed income was substantially enhanced in second block assessment order ?
(iii) Whether in the facts and circumstances of the case, the Tribunal, while restoring the matter back to the AO, was right in making fresh observations, inconsistent with its original order, amounting to review of its earlier order ?
(vi) Whether in the facts and circumstances of the case, was the Tribunal justified in refusing to award appropriate cost to the assessee, more so when the order of the AO was not upheld but again restored back by the Tribunal ?”
3. There was search and seizure action in the premises of the directors/partners of the assessee on 30th Aug., 1996, resulting in seizure of cash, jewellery and other valuables and also incriminating books of account and other documents. Block assessment was done. The matter was carried by the assessee in appeal to the Tribunal, which was disposed of vide order dt. 4th Dec., 2000, inter alia, with the following directions : “45.1 However, we also give some guidelines in arriving at net profit rate. The net rate can be arrived at by applying net profit rate accepted by the Department in the case of the appellant or the net profit rate shown by other concerns dealing in the same business or manufacturing items of the nature as manufactured by the appellant concern. The net profit rate can also be arrived at by working out the income surrendered by the appellant as undisclosed income and other undisclosed assets found during the block period by the AO. The AO, however, can work out the net profit rate in accordance with the facts and circumstances of the case as well as material available on record, but he should give due opportunity of being heard to the appellant and also such rate should be reasonable, logical and judicious based on reasonable evidence.”
4. After remand, assessment was made but the assessee again carried the matter to the Tribunal and submitted that the order of assessment was not in accordance with the order of remand. The Tribunal disposed of the matter by the impugned order dt. 1st Sept., 2008, inter alia, with the following observations : “….In our opinion, the approach of the AO treating the entire sales as undisclosed income is against the basic principles of IT law. Hence we restore the matter to the file of the AO for estimating the reasonable profit on suppressed sales on the basis of material on record in consonance with the earlier order of the Tribunal. It is needless to say that the AO is required to consider the objection put before the AO vide letter cited supra in true spirit and adequate opportunity of hearing to be given by the AO to the assessee.”
5. We have heard learned counsel for the assessee.
6. It was submitted that the Tribunal should have taken a final view and there was no justification for remand. Observations made in the impugned order of remand are inconsistent with the directions in the earlier order. It was further submitted that after remand, if same authority deals with the matter, its order will be vitiated by judicial bias, particularly when the assessing authority was also associated with search.
7. We are unable to hold that in the facts and circumstances of the case, questions sought to be raised are substantial questions of law.
8. No doubt, where material is enough, the appellate Court should normally determine the issue on merits, even if such issue has not been dealt with by the original authority. However, power of remand can be exercised when as a result of finding of the appellate authority, redetermination of issue becomes necessary. In the present case, on facts, the Tribunal held that it was necessary to have redetermination of assessment for the reasons mentioned in the impugned order. We are unable to hold that the reasons mentioned by the Tribunal for rejecting the conclusion for redetermination of issues are perverse.
9. Question Nos. (i), (iii) and (vi) are, thus, not substantial questions of law. As regards question No. (ii), we are unable to hold that merely because an authority has to deal with the matter again, after remand, such authority suffers from judicial bias. The Tribunal rejected the contention of the appellant, relying upon judgment of the Hon’ble Supreme Court in Union of India vs. Vipan Kumar Jain & Ors. (2003) 181 CTR (SC) 24 : (2003) 260 ITR 1 (SC), holding that there could be no apprehension of bias merely because the authority under s. 132 of the Act and the AO is the same. The question of bias has to be decided on facts of each case and mere fact that the officer associated with search, made assessment, was not by itself a ground to impute bias. While making assessment, the AO had to apply the judicial norms. We are, thus, unable to hold that the question raised is a substantial question of law.
10. The appeal is dismissed.
[Citation : 326 ITR 591]
