2019 (9) TMI 156 - HC - Income Tax

High Court emphasizes ITAT must consider cross-objections & genuine sale findings. Errors in dismissal noted. Assessee partly favored on evidence discrepancies.

Sarla Jain Versus Principle Commissioner of Income Tax Delhi-12

The High Court ruled in favor of the appellant, emphasizing the necessity for the ITAT to consider cross-objections and provide specific findings on the ... Rejection of cross-objections of the appellant by Tribunal - HELD THAT:- Tribunal was not justified in rejecting the cross-objections of the appellant without consideration of the said cross-objections on merit. The order of this Court could not be considered as either rejection of the said cross-objections, or as order of denial of opportunity to the appellant to urge her cross objections after remand to the Tribunal, while passing the earlier order dated 14.03.2012. The first question is, therefore, answered in favour of the appellant. ITAT's findings with regard to evidence qua sale of jewellery, as well as alleged confession of Bishan Chand Mukesh Kumar - Tribunal has remanded the matter back to the Assessing Officer for the purpose of recording further evidence, after observing that the appellant had not led any evidence to establish the sale of jewellery by her to Bishan Chand Mukesh Kumar - HELD THAT:- We are not inclined to interfere with the remand made by the Tribunal. We may only observe that the observations/ findings made and returned by the Tribunal in the impugned order qua the sufficiency of the evidence led by the appellant, and the evidentiary value of the said evidence, at this stage, can be regarded as finding only for the purpose of justifying the remand. The said findings though cannot be said to be perverse, but since the order of remand is not being interfered with, in all fairness, we hold that the same shall not come in the way of the AO evaluating the evidence that may already have been led, or that may be led by the Assessee. Thus, the second question is partly answered in favour of the Assessee in the above terms. Direct that the AO shall not be bound by the findings of fact returned by the Tribunal in the impugned order, qua the sufficiency/ evidentiary value of evidence already led, or that may be led before the Assessing Officer upon remand. Issues:1. Whether the ITAT was required to adjudicate the Assessee's cross-objections as duly raised before itRs.2. Whether the ITAT's findings regarding evidence of the sale of jewelry and alleged confession are perverseRs.Analysis:*Issue 1:*The appellant raised cross-objections to the re-opening of assessment, which were rejected by the Assessing Officer and CIT (Appeals). The ITAT decided the appeal on merits without considering the cross-objections. The High Court remanded the matter back to the Tribunal, emphasizing the need for specific findings on the genuineness of the jewelry sale transactions. The Tribunal dismissed the cross-objections, stating they did not arise from the High Court's directions. However, the Court held that the Tribunal was not justified in rejecting the cross-objections without due consideration, ruling in favor of the appellant.*Issue 2:*The appellant argued that the Tribunal's findings on evidence were contrary to the record, citing discrepancies in Bishan Chand's statement and the description of jewelry items. The Tribunal remanded the matter to the Assessing Officer for further evidence, noting the lack of proof of jewelry sale. The High Court upheld the remand decision, stating that the Tribunal's findings were for justifying the remand and should not hinder the Assessing Officer's evaluation of evidence. The Court directed the Assessing Officer to independently assess the evidence, partially ruling in favor of the Assessee on this issue.In conclusion, the High Court addressed both issues by emphasizing the importance of considering cross-objections and ensuring a fair evaluation of evidence in tax matters, ultimately upholding the remand decision for further assessment by the Assessing Officer.