TaxTMI 
TaxTMI 
2005 (8) TMI 98
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....tion of the documents and in the absence of document being on record, the presumption of regularity of official act would extend to presumption about the production of document in question before the Assessing Officer? (III) Whether the Tribunal was justified in law in interfering with the order passed by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961?" 2. The above three questions were framed at the time of admission of the appeal. 3. As a matter of fact, questions Nos. 1 and 2 are about the same point but question No.3 is on the merits arising out of the facts. The respondent assessee is a partnership firm and was assessed in the status of registered firm for the assessment year 1997-98. The assessment order was passed on June 16, 1998, under section 143(3) of the Income-tax Act. The short order passed by the Income-tax Officer, Ward I, Bhilwara, reads as under: "ASSESSMENT ORDER Return of income has been filed on October 8, 1997, vide R. No. 3183 declaring total income of Rs. 60,250 in the status of PFAS. This case has been selected for scrutiny on random sample basis by issue of notice under section 143(2) of the Income-t....
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....of the Revenue. 6. In response to it, a written submission was submitted on March 1, 2001, in which it was stated: "The assessee filed his income-tax return as per the provisions of the Income-tax Act. Payment of remuneration to partners had been specified in the agreement deed which was executed on April 26, 1996. Copy of this deed was also submitted before the Assessing Officer on June 16, 1998. However, we are enclosing a copy or the agreement deed herewith. Partners remuneration was given according to this agreement. Partners' remuneration is as per the provision of section 40(b)(v) of the Income-tax Act, and the income declared before partners salary Rs. 1,67,902. Partners salary (Rs.) Income (Rs.) Income (Rs.) 75,000 90% 67,500 7,500 75,000 60% 45,000 30,000 37,902 (rest) 40% 15,160 22,740 Total 1,87,902 1,27,660 60,240 That as far the remuneration paid to a partner Madan Lal Tater of Rs. 13,650 is concerned, it had been specified in the agreement deed. Therefore, the order passed by the assessing authority is not erroneous and not against the interests of the Revenue hence proc....
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....ned, we are of the opinion that the Tribunal was in error in assuming and finding that the document in question was produced before the Assessing Officer. Apparently there was no denial that this document was not on the record of the Assessing Officer nor was it referred to in the proceedings. The order of assessment which we have quoted above is eloquent discussion that took place between the Assessing Officer and the representative of the assessee on August 16, 1996, when the case was first taken up for hearing. In fact it does not refer to the fact that any material was placed before the Assessing Officer for his examination. 12. The assessment order only records that Shri S.C. Agarwal and the authorised representative attended with whom the case has been discussed. After discussion the returned income is accepted. There is intrinsic evidence available on record which shows conclusively that agreement dated April 26, 1996, was not produced before the Assessing Officer. The note annexed to the assessment order goes to show what has been discussed on the date the assessment order was passed. The office note in the first instance narrated in what circumstance the matter was take....
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....quantifying the amount to be paid to each partner in the deed itself, fulfils the condition under section 40(b)(v) for allowing the deduction claimed. Primarily the burden which lay on assessee was discharged. No enquiry having been further conducted about the date on which the document was suspected to be executed and no opportunity having been allowed to the assessee before holding otherwise, the document could not have been assumed to be bogus. Hence, it found that the order of the Assessing Officer cannot be held to be erroneous and prejudicial to the interests of the Revenue. 17. Apparently, whether the document is bogus or not bogus or is antedated or not are primarily questions of fact. The order of the Commissioner of Income-tax for arriving at this conclusion that the document is ante-dated, no enquiry was conduded, no notice was given to the assessee before rejecting the genuineness of document and no opportunity was given to the partners of the firm to establish that the document was of the date on which stamps were purchased. Normally a document mentions the date of its execution. Ordinarily, the presumption is that it was executed on that date. The burden lies on th....