ITA-25-2001 (O&M) 1 IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 410 ITA-25-2001 (O&M) Date of Decision : 30.1.2020 Sh. Tara Chand Appellant Versus Commissioner of Income Tax, Chandigarh and another Respondents CORAM : HON'BLE MR.JUSTICE AJAY TEWARI : HON'BLE MR.JUSTICE AVNEESH JHINGAN Present : Mr. Alok Mittal, Advocate for appellant. Ms. Urvashi Dhugga, Sr. Standing counsel for respondents. AJAY TEWARI, J. (Oral) 1. This appeal has been filed by assessee under Section 260- of Income Tax Act, 1961 (for short 'the act') against order dated 29.9.2000 of Income Tax Appellate Tribunal, Chandigarh Bench 'B' Chandigarh (for short 'the Tribunal') passed in Income Tax Appeal No.2143/Chandi/1992 relating to A.Y. 1990-91, claiming following substantial questions of law :- (a). Whether in facts and circumstances of case, orders Annexures P-1 and P-3 are legally sustainable ? (b). Whether in facts and circumstances of case, order passed by Appellate Tribunal is legally sustainable in as much as all facts and evidence was in knowledge of ANURADHA 2020.02.06 17:28 I attest to accuracy and integrity of this document ITA-25-2001 (O&M) 2 Assessing Authority prior to passing of assessment order ? (c). Whether in facts and circumstances of case, order passed by Appellate Tribunal is legally sustainable in as much as no opportunity of hearing had been afforded to assessee-appellant by Assessing Authority during proceeding initiated U/s 131 of theAct against Shri Sumer Chand and same have not been brought on record ? (d). Whether in facts and circumstances of case, order of Appellate Tribunal in remanding case back to Assessing Authority is legally sustainable in as much as Assessing Authority had knowledge of facts and evidences qua said additions of Rs. 2,77,375/- and Rs.3,95,200/-? (e). Whether in facts and circumstances of case, order of Appellate Tribunal is legally sustainable in as much as factum of retraction of affidavit dated 29.6.1992 by Shri Sumer Chand subsequent to issuance of Notice U/s 131 of Act during pendency of assessee-appellant appeal before CIT(A) had not been taken into consideration by Appellate Tribunal ? 2. Brief facts of case are that assessee was trading in wheat and also had rice sheller. He had filed its return of income tax for assessment year 1990-91 on 30.11.1990 declaring income of Rs.1,43,970/-. By this appeal appellant has challenged order of Tribunal whereby case was remanded back to Assessing Officer to re-decide issue regarding addition. Assessing Officer had treated some sales to be outside book of accounts and other sundry issues relating to yield. In appeal, Commissioner set aside order of Assessing Officer and accepted appeal of assessee. Tribunal noticed that two sets of documents had been placed before ANURADHA 2020.02.06 17:28 I attest to accuracy and integrity of this document ITA-25-2001 (O&M) 3 authorities and thought it fit that entire issue be re-looked at by Assessing Officer after considering all documents afresh. Relevant portion of Tribunal order is quoted below :- 7. Now before us there are two statements of Sumer Chand, one made before CIT(A) and other recorded by AO dis-owning his earlier statement and affidavit made before CIT(A) and similarly there are two copies of stock register, one filed before CIT(A) and other produced before AO in support of his submissions made before AO. CIT(A) has rejected second statement given by Shri Sumer Chand before AO recorded but during proceedings initiated u/s 271(1)(c)though of course during pendency of appellate proceedings. CIT(A) rejected statement of Sumer Chand, made before AO and supporting case of department to effect that no sales were made in month of June to assessee by M/s Angel Rice Mills, because according to CIT(A) AO had recorded statement of this witness at back of assessee and further because AO has not allowed opportunity to assessee to cross-examine this witness. It is also important to mention here that these contradictory stands taken by Shri Sumer Chand one before CIT(A) and other before AO, are so significant and important that their values cannot be under estimated because of statement of this witness as well as veracity of entries in stock register of Angel Rice Mills is going to resolve main controversy i.e. as to whether any rice was sold by this firm to assessee on 26.6.89 or same was sold in month of July 1989 because this very rice in turn had been sold by assessee firm to some other party. If we carefully go through order of CIT(A) we find that even on face of his orders it appears that statements recorded by CIT(A) during course of appellate proceedings, affidavits of ANURADHA 2020.02.06 17:28 I attest to accuracy and integrity of this document ITA-25-2001 (O&M) 4 parties taken on record and copies of stock register of Angel Rice Mills obtained by CIT(A) and kept on record during appellate proceedings, affidavits of parties taken on record and copies of stock register of Angel Rice Mills obtained by the CIT(A) and kept on record during appellate proceedings do not seem to have been properly confronted to AO and it further appears that CIT(A) has also not given proper opportunity to AO to cross examine these persons whose statements and affidavits were taken on record by assessee though CIT(A) seems to have completed formalities of writing in his order that he had complied with requirements of law because he observed that AO was present during entire proceedings because in our opinion, had CIT(A) in real sense allowed appropriate opportunity to AO to cross examine these witnesses and had allowed opportunity to him in confronting affidavits of parties taken on record, there would have been no need for AO to call witness Shri Sumer Chand again to produce records before him and make statement before him wherein he has explained in detail before AO as to how he gave wrong statement before CIT(A) and as to how wrong affidavit was filed before CIT(A) supporting case of assessee though in fact stand taken by department on basis of records of Angel Rice Mills was correct with regard to fact that Angel Rice mills as per their stock register and other relevant records has sold rice to assessee in month of July and not in month of June 1989 as claimed by Assessee. In peculiar circumstances of case we refrain from commenting on evidentiary value of statement of witness of Shri Sumer Chand recorded by CIT(A) and one recorded by AO as well as regarding evidentiary value of affidavit well as material collected and placed on record by CIT(A) during appellate proceedings as well as ANURADHA 2020.02.06 17:28 I attest to accuracy and integrity of this document ITA-25-2001 (O&M) 5 proceedings initiated u/s 271(1)(c) against assessee (of course both proceedings in this regard took place on or near about same time), but we cannot help commenting on point that CIT(A) has not afforded opportunity to AO before admitting statement, affidavit and other material as evidence. At same time we also find that AO also does not seem to have afforded appropriate opportunity to assessee before relying upon statement given by Sumer Chand as well as before taking other material on record which lateron also came into consideration before CIT(A). 3. In these circumstances of case, we do not find impugned order to be perverse or illegal. 4. Consequently, appeal stands dismissed. 5. Since main case has been decided, pending application, if any, also stands disposed of. (AJAY TEWARI) JUDGE (AVNEESH JHINGAN) JUDGE 30.1.2020 anuradha Whether speaking/reasoned - Yes/No Whether reportable - Yes/No ANURADHA 2020.02.06 17:28 I attest to accuracy and integrity of this document Tara Chand v. Commissioner of Income-tax, Chandigarh and another