TaxTMI 
TaxTMI 
2024 (7) TMI 1145
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered and decided by the ITAT by a consolidated order dated 31-8-2004 by which the appeals preferred by the assessee were partly allowed whereas the appeal preferred by the Revenue was dismissed. Against the order passed by the ITAT, the Revenue preferred these appeals and the assessee has preferred the cross appeal. 2. Since all the appeals are arising out of same order dated 31-8-2004 passed by the ITAT they are being heard and decided together by this common judgment along with cross-objection. 3. In order to avoid repetition of facts and for the sake of convenience, the documents annexed in ITA No.6 of 2005 are being referred : 4. The facts of the case are that : a) The assessment year pertains to 1988-89, 1989-90, 1990-91, 1991-92 and 1992-93. Initially Surendra Kumar Jain (since deceased) filed the aforesaid returns; the same were accepted; and intimations were issued under Section 143 (1) (a) of the Income Tax Act, 1961 (for brevity 'the IT Act'). b) Original assessee derived income from salary as Managing Director of M/s Bhilai Engineering Corporation Limited, share profits from firm in which he is partner and other sources. c) Search and seizure operations were car....
X X X X Extracts X X X X
X X X X Extracts X X X X
....grieved by the assessment order the assessee preferred an appeal before the CIT (A) on various grounds including the validity of reassessment proceedings. The CIT (A) after hearing the parties vide its order upheld the order passed by the AO under Section 143 (3) read with Section 147 of the IT Act for all the years under consideration except allowing the relief to the assessee on the issue relating to the levy of interest under Section 139 (8) and Section 217 of the A.Y. 1988-89. h) Feeling aggrieved by the order of the CIT (A) the assessee preferred appeal for the assessment year under consideration and the Revenue had also preferred cross appeal for AY 1988-89 bearing ITA No.585/Nag/97. The ITAT after going the facts and material available on record held that the assessment was completed by the AO on the dictates of higher authorities without application of mind whereas the ITAT also dismissed the contention of the assessee for initiation of reassessment proceeding and held that reassessment was not done by the AO as per the directions/ dictates of the superior authority. Consequently, assessment in the assessment years was annulled, however, reassessment was upheld. g) Agai....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and coordination is maintained the Department cannot function and in the instant case the similar things happened. (iii) Learned counsel would also submit that the Supreme Court in the matter of Vineet Narain & Others v Union of India & Another WP(Cri.) No.340-343 of 1993 (dated 30-1-1996) had directed the Government agencies to fairly, properly and fully investigate into every accusation against every person and all the agencies were directed to timely report to the Supreme Court regarding the progress achieved in the matter of investigation, therefore, the entire proceeding of the CBI and the Income Tax Department was being monitored by the Supreme Court. Under the circumstances the AO, who was taking cognizance of the development has to gather information and was required to be in liasioning with the officers including higher one. Thus, the correspondence of coordination in between the officers were made and no extraneous inference or apprehension is required to be drawn and the assessment cannot be said to be completed on the direction/dictates of higher authorities. (iv) Learned counsel would submit that the conclusion reached by the ITAT is based on the irrelevant consider....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion, learned counsel would place reliance upon the decision rendered by the Supreme Court in the matter of Omar Salay Mohamed Sait v Commissioner of Income Tax (1959) 37 ITR 151 (SC), decision rendered by the High Court of Allahabad in the matter of S.K. Gupta & Co. v Income Tax & Anr. (2001) 165 CTR (All) 565 = (2000) 246 ITR 560 (All) and the High Court of Bombay in the matter of Commissioner of Income Tax v Bharatkumar Modi & Ors. (2000) 164 CTR (Bom) 273 = (2000) 246 ITR 693 (Bom) = (2000) 113 TAXMAN 386 (Bom) and would submit that when the finding of fact can be interfered when it is based on conjectures and surmises or improper rejection of relevant evidence, is liable to be interfered with in reference jurisdiction. Further, the High Court of Allahabad in S.K. Gupta & Co. (supra) would submit that when the AO had reason to believe under Section 147 that any income chargeable to tax and has escaped in any assessment year he may assess or reassess such income and AO should have the reason to believe and sub-section (2) of Section 148 provides that before issuing a notice for an intended assessment/reassessment under Section 147, the AO shall record his reason for doing so and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....authority and is required to act independently and judiciously, could not have done so. (C) Learned counsel would submit that the return was filed under protest in June, 1995 and the entire denial was made with respect to any action or nexus with the seized documents. Thereafter, the Investigation Department at Delhi illegally usurped the power over the entire assessment proceedings to the complete exclusion of the AO, who was placed at Bhilai, Durg and it is the Delhi Investigation Department recorded various statements on which the reassessment was thought for and ordered. He would also submit that in terms of Section 132A (3) read with Section 132 (9A) of the IT Act, the DDIT (Inv.) was the requisition officer and was required to transfer the documents requisitioned to the AO within the statutory period of 15 days and subsequent to it the authority was seized to exercise its jurisdiction. (D) Reference is made to the decision rendered by the Supreme Court in the matter of CIT v K.V. Krishnaswamy Naidu (2001) 9 SCC 767, to submit that the authorised officer, the Director (Inv.), was only confined to carry out search and seizure, but was not the Income-Tax Officer who could pass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ow, which is apparent from the order of the ITAT, that the AO did not form any opinion to reopen and the action of reassessment was suggested. (G) Learned counsel would submit that as per Section 153A of the IT Act (as then prevailing was) the reassessment should have been completed within two years and in the instant case the assessment year 1988-89 to 1992-93 continuously and notice under Section 148 was issued on 30-3-1995 so the proceedings of assessment further would be barred after March, 1997. Therefore, as on today this Court cannot lift the bar of limitation by ordering de novo reassessment afresh. He would submit that the Tribunal having held the initiation of reassessment was valid is contradictory inasmuch as the original inception of reassessment was bad in law, therefore, this cannot cure the defect on behalf of the Revenue and accordingly question No.3 should be answered in favour of the assessee. (H) In support of his contention, learned counsel would place reliance upon the decisions rendered in the matters of Vineet Narain (supra), Sirpur Paper Mill Ltd. v Commissioner of Wealth-Tax, Andhra Pradesh (1970) 1 SCC 795 : (1970) 77 ITR 6, The Purtabpur Company Ltd. v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earch and seizure by the CBI were later on handed over to the Income Tax Department at Delhi. The Revenue after receiving documents, thought about reassessment at the relevant time. The AO was at Bhilai, not at New Delhi, so whether the AO had applied its mind independently to reassess ? The correspondence which has been referred to by the ITAT in its order reflect that the Government agencies were under the impression that money has been swindled, which led to criminal cases. All these state of affairs remained stagnant and the Income Tax Department did not put up hammer on it. Subsequently, a PIL was filed by a journalist Vineet Narain after which the issue again caught fire and all issues came to fore. 10. In respect of subsequent criminal cases so filed the entire issue of criminality and involvement of people was challenged and were adjudicated upon. On one of such issue the Supreme Court in the matter of Central Bureau of Investigation v V.C. Shukla & Others (1998) 3 SCC 410 held that prosecution intended to prove the abetment of Jains'. Jains' committing the offence does not arise in such case. Reference of the same is relevant in the instant case as the nucleus of all fact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions (4-A) to (14) (both inclusive) of Section 132 and Section 132B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under sub-section (1) of Section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of Section 132A and as if for the words "the authorised officer" occurring in any of the aforesaid sub-sections (4-A) to (14), the words "the requisitioning officer" were substituted. 14. Section 132 (9A) of the IT Act speaks that where the authorised officer has no jurisdiction over the person referred i.e. assessee herein all the goods seized shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of fifteen days (as then prevailing was) from the date on which the last of the authorisations for search was executed. 15. For brevity Section 132 (9A) of the IT Act (as then prevailing was) is reproduced hereunder : (9A) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....troller of the AO of Bhilai, prior to date of initiation of reassessment proceeding were called for. The said proceeding was not provided to the assessee as it was claimed to be confidential, however, before the ITAT when the correspondence was placed they were allowed to be inspected by the assessee. 20. Perusal of the record and order would show that the documents received by the AO from the DDIT (Inv.), New Delhi, including the documents seized from J.K. Jain, report of CBI, appraisal report ADIT, New Delhi, was not provided to the assessee and according to the order of the ITAT, the department filed copies of such entire material along with factual clarification in writing. 21. The ITAT while formulating whether the AO acted independently or at the behest of his superiors or at the dictation/ direction is essentially a question of fact. The Supreme Court in the matter of Sirpur Paper Mill Ltd. (surpa) while dealing with Section 25 of the Wealth Tax Act (Corresponding to Section 264 of the Act) set aside the order passed by the Commissioner of Wealth Tax on the ground that the CWT sought instructions from the Central Board. The Court held that the power conferred under Section....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... sheet maintained by the Commissioner of Wealth Tax. From the inception of the proceedings the Commissioner of Wealth Tax put himself in communication with the Board of Central Revenue and sought instructions from that authority as to how the revision applications filed before him should be decided. He exercised no independent judgment. The Commissioner also recorded that the case did not require a personal hearing but since the Director of the Company had made a personal request for an interview it was "thought desirable" from "the point of view of public relations to give an interview." Here also the Commissioner misconceived the nature and extent of his jurisdiction. 12) Counsel appearing on behalf of the Commissioner of Wealth Tax in these appeals has not attempted to support the order under appeal. We set aside the order passed by the Commissioner and direct that the revision applications be heard and disposed of according to law and uninfluenced by any instructions or directions given by the Board of Revenue.... 22. The Court while such setting aside the order found that the Commissioner of Wealth Tax put himself in communication with the Board of Central Revenue and sough....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ooks of account of BECO or other sister concerns of BECO so that quantum of receipt/payment can be cross checked and accordingly the seized material can be correctly deciphered. If considered necessary, matter can be discussed with the undersigned. We are also working out the case and we sent you copy of the investigation report at the earliest possible time. DDIT (Inv). 25. The ITAT in its order has also given the account of the documents which were annexed with aforesaid letter. It is pertinent to mention here that these documents were same set of documents which were sent to CIT, Jabalpur by the DDIT (Inv.) on 1.3.95. The set of documents were as follows : i) SET - I - Monthly receipts and payments having pages 1 - 32. ii) SET - II - Containing detailed expenditure in firm and others having pages 1-30. iii) SET - III - Titled as MR - 69/91 containing pages 1-8 showing summary of accounts in the diary. iv) SET-IV - Summary of accounts of diary titled as MR - 70/91 having pages 1-30. v) SET - V - Titled as MR - 72/91 showing details of payments etc. having 51 pages. vi) SET - VI - Titled as MR - 73/91 having 50 pages. vii) SET - VII - Titled as MR - 67/91 containin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Delhi, he has been informed of the action to be taken. He expressed his satisfaction about the progress so far. 30.3.95: Recorded the detailed reasons u/s.148(2), 17(1) & 16(1) of IT/WT/GT Act for issue of notices under various D. Taxes. 5.4.95: Received a phone call from CIT/DDIT (Inv.) informing the visit of Shri. D.C. Agarwal. It is informed by Shri Abhey Damble, ACIT that in the case Action Taken Report (ATR) is to be submitted to the (not legible) by the CIT and the said report to be submitted to the CIT showing action taken on the following aspects: (a) reopening of the cases-reasons to work out; (b) submission of the report to the settlement commission on the basis of the documents of seized material record for CBI. Summons to B.R: Jain, issued. 27. The aforesaid letter dated 20.03.95 which was written by DDIT (Inv.) to Mr. K.M. Verma, Deputy Commissioner of Income Tax (AO) in most indubitable way dictated him to initiate reassessment proceedings. In our view, this letter in unequivocal terms the DDIT (Inv.) has exceeded its general power of superintendence and influenced the mind of the AO. 28. The AO has not applied his mind independently without any bias ge....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... straightaway. Office of the Chief Minister communicated the order of the Chief Minister, not once but twice. Respondent 2 acted thereupon. It advised the Regional Transport Authority to proceed, after obtaining a proper application from Respondent 4 in that behalf. This itself goes to show that prior thereto no proper application was filed before the Regional Transport Authority. Such an interference on the part of any authority upon whom the Act does not confer any jurisdiction, is wholly unwarranted in law. It violates the constitutional scheme. It interferes with the independent functioning of a quasi-judicial authority. A permit, if granted, confers a valuable right. An applicant must earn the same. 32. In democracy like us every authority may, however, high should only function within the four corners of law because the rule of law requires that all the machinery of State must function according to mandate of statute. The democracy requires the rule of law in State must be protected from becoming rule of man. 33. Rule of Law is of the elemental principle of Constitution of India. The Rule of Law requires Rule within the ambit of law and every statutory authority must functi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....law." 36. However it is equally true that when the authority is vested with the power it has duty to exercise it and adherence to said rule is important facet to administration of justice. The Revenue raised the argument that effective functioning of the revenue department requires coordination monitoring and superintendence. However what required to be seen is that General power of superintendence must be distinguished from the interference in the adjudication process. The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner the principle has been recognised by the Supreme Court in Maharaja Dharmander Prasad Singh (supra), held thus at para 55 : 55. It is true that in exercise of powers of revoking or cancelling the permission is akin to and partakes of a quasi-judicial complexion and that in exercising of the former power the authority must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and decide the matter consistent with the principles of natural justice. The authority cannot permit its decision to be influenced by the dictation of others as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Commissioner has merely carried out the directions of the Board of Revenue, instead of deciding the case according to his own judgment. 38. The Tribunal in its order after considering the material available on records come to a wrong finding that the time gap the AO revived information and reasons recorded to reassess would not be fatal and despite the fact no reasons were recorded or evidence is available, which cannot be stated that reassessment was an independent decision. This finding of the ITAT fall short of the principles laid down when the events of facts have to be seen as a whole. One fact cannot be picked up to isolate the other set of facts like cherry picking. To start with thinking of reassessment, which ended into wrong reassessment procedure would be a continuing one and cannot be put into a single compartment as the state of mind is to be evaluated. It is not expected after going through the communication that the AO decided to reassess of his own. As initially when the assessment was completed, the AO was not agile of the matter, but when the communications from higher up were received from Delhi, the AO decided for reassessment. 39. The true test is whether in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... judge in his own cause which also give rise to the to the principle that justice must not only be done, but it must also be seen to be done. Lord Hewart, C.J. in R. v. Sussex JJ., ex p McCarthy [(1924) 1 KB 256], KB (p. 259) wherein he said: "... it is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done." 46. The classic case which falls for consideration before the English Courts was Dimes v. Grand Junction Canal (1852) 3 HLC 759 : 10 ER 301, In the aforesaid case Lord Cottenham presided over a previous case in which a canal company brought a case in equity against a land owner. Lord Chancellor Cottenham heard the appeal against an order of the Vice-Chancellor and confirmed the order. The order went in favour of the defendant Company. A year later, Plaintiff discovered that Lord Chancellor Cottenham had shares in the defendant Company. He petitioned the Queen for her intervention. Eventually, the matter reached the House of Lords. The House of Lords held that participation of Lord Cottenham in the adjudicatory process was not justified. Though Lord Campbell observed: "......
X X X X Extracts X X X X
X X X X Extracts X X X X
....n was 'whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased'. Applying this test the House of Lords concluded that it was reasonably possible that that observer might consider that the recorder's submissions would carry particular weight, perhaps subconsciously, with the lay members with whom he had sat in the past. 48. Position of law is more or less similar in India the decision of the Supreme Court in N.K. Bajpai v. Union of India (2012) 4 SCC 653 is worth reading : 55. The courts have applied the tests of real likelihood and reasonable suspicion. These doctrines were discussed in S. Parthasarathi v. State of A.P. [(1974) 3 SCC 459 : 1973 SCC (L&S) 580]. The Court found that "real likelihood" and "reasonable suspicion" were terms really inconsistent with each other and the court must make a determination, on the basis of the whole evidence before it, whether a reasonable man would, in the circumstance, infer that there is real likelihood of bias or not. The court has to examine the matter from the viewpoint of the people. 56. The term "bias" is used to denote a d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ges Inquiry Committee (2011) 8 SCC 380, (2011) 8 SCC 380 : held thus : 65. In G. Sarana (Dr.) v. University of Lucknow [(1976) 3 SCC 585 : 1976 SCC (L&S) 474] the Court referred to the judgments in A.K. Kraipak v. Union of India [(1969) 2 SCC 262] , S. Parthasarathi v. State of A.P. [(1974) 3 SCC 459 : 1973 SCC (L&S) 580] and observed: (G. Sarana case [(1976) 3 SCC 585 : 1976 SCC (L&S) 474], SCC p. 590, para 11) "11. ... the real question is not whether a member of an administrative board while exercising quasi-judicial powers or discharging quasi-judicial functions was biased, for it is difficult to prove the mind of a person. What has to be seen is whether there is a reasonable ground for believing that he was likely to have been biased. In deciding the question of bias, human probabilities and ordinary course of human conduct have to be taken into consideration." 51. However, the proposition that No one can be judge in own cause and justice must not be done but seems to be done comes to serious quandary when applied in the Administrative law for the simple reason that sometimes the statute itself requires a officer to play dual role one as an agent of state and other as a i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der, instruction, or direction were not sufficient, because, he could not be expected to get over the compulsion of being a part of the Department, as for his promotion he must be dependent on the Board. The Commission added as follows:- We think that the experiment begun in 1939 should be carried forward and the Appellate Assistant Commissioners should be removed from the control of the Commissioners and the Central Board of Revenue. Their leave, transfer and posting should be in the hands of the Tribunal. Here it may be worth stating that under the American Administrative Procedure Act it seems to have been made an advance in the direction of separating the department from the adjudicative agencies on the basis of the recommendations of the Attorney-General's Committee. The APA in section 5(c) lays down that ... No officer, employee or agent engaged in the performance of investigative or prosecuting functions for any agent in any case shall, in that or a factually related case, participate or advise in the decision... This provision provides for the functional separation as against the structural separation within the same agency body, and is subject to only a few exc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s judgment has arrived to the finding considering various material available on record that the AO has passed the order against the assessee on the dictates of his superiors. 56. Learned counsel for the Revenue though argued that since the matter regarding the Jain dairy was pending before the Supreme Court and as the Supreme Court has passed some specific directions in the Vineet Narain case, therefore, it was important for the officers sitting at Delhi and Jabalpur to have superintendence over the progress of the proceedings and the same cannot be said to be the interference or passing order on dictates. 57. Bare perusal of order shows that the Supreme Court has not directed to take action in any particular matter rather the intention of the Apex Court was that the proper investigation must be made over the issue which involves such a serious allegations. 58. It is quite pertinent to mention that how these proceedings against the assessee has been conducted the series of event started on 03.05.91 when the CBI has conducted the search in premises of J.K. Jain. After it the Income Tax Department in exercise of its power under Section 132A of the IT Act, called for these document....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Vaddadi, ITI for delivering the same by speed post at Raipur, Head Post Office. The sealed cover contains the replies to Shri S.K. Jain's letter (reply to notice) dt. 5.2.96 along with acknowledgment slip which has been duly sealed and signed. 28.2.96: Shri H.L. Vaddadi, ITI informed that the sealed envelope containing the above has been delivered to HPO for sending it to Addl. DIT, Shri Agrawal by Speed Post vide Ack.No.5358 dt. 28.2.96 which is placed on record. 29.2.96: Shri D.C. Agrawal, Addl. DIT, Delhi informed that he had not received the above till 6.00 PM who was informed by the undersigned that the delivery of the dak could be affected only by tomorrow by 12 noon. He desired to have a set of the contents of the envelope to be sent by FAX which has been so transmitted to him. 1.3.96: Tried to contact Shri D.C. Agrawal n his telephone No.7527513 but there was no response. This was just done to have the confirmation of having received the sealed envelope as above. At about 4.30 PM the Hon'ble D.G. Shri G.P. Garg had a telephonic talk with undersigned who wanted to know about the delivery of the above material and its mode who has been informed of the facts n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he undersigned should camp at Delhi for the completion of the assessment orders, so that the assessment orders along with the demand notice, challan etc. be served upon the assessee in the first week of April, 96 as desired by the DG(Inv.), since the Hon'ble Supreme Court has posted the case for hearing on 9th April, 1996. It has been explained to him that in view of the other time barring assessments pending in this Range, it is very difficult for the undersigned to camp at Delhi from 25th as suggested by him. 22.3.96: The Hon'ble CIT, Jabalpur telephonically directed that I have to proceed to Delhi on 28th March, 96 as he has received the message from Higher Authorities in Delhi and Bhopal to that effect. He further directed that I should report on 29th March, 96 in the Investigation Directorate and carry out the work of drafting of assessment orders in the case of Shri S.K. Jain on holidays i.e. 30.3.96, 31.3.96 and 1.4.96, which are required to be drafted with the guidance of DI, DG and Addl. DIT as they would approve the assessment orders to be framed. In this connection, the CIT, Jabalpur also directed that there is no need of the undersigned in attending the procee....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Napier Town Jabalpur same is reproduced herein : To, The Commissioner of Income Tax, Central Revenue Building, Napier Town, Jabalpur (MP). Attention: Shri Abhay Damle, ACIT(Hqrs.). Sir, Sub-Monitoring of the assessment by Hon'ble CIT in the case of Shri S.K. Jain under Income tax, Wealth-tax and Gift-tax Deliberation of the conference with Hon'ble DG(Inv.), Delhi on 22nd December, 1995-Report-Regarding As directed by the Higher Authorities of the Directorate of Investigation, Delhi as conveyed through Shri. D.C. Agrawal, Addl. DIT (Inv.), I had been to the Directorate from 21st Dec.95 to 29th Dec.,95 in connection with the taking over the seized material and other documents collected during the investigation by the Addl. DIT (Inv.). On 21st Dec., 95 at 3.30 PM I had a conference with the DIT alongwith Shri D.C. Agrawal to discuss the case of Shri S.K. Jain wherein the DIT had instructed me to go through the material available with the Addl. DIT (Inv.) and segregate the same as pertaining to Shri S.K. Jain and BEC Ltd. etc. and take up the photo copies of the same. This was carried out on 21st and 22nd Dec., 95. Another conference was held on 22nd Dec., 95 from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... detailed questionnaire under the Wealth-tax Act, 1957 have been kept in the Paper Book prepared for submission to the Hon'ble Settlement Commission, a copy of which has already been submitted to you. Presently the hearing of the case both under Income-tax and Wealth-tax has been fixed on 5th February, 1996. As transpired in the conference with Hon'ble DG, these assessments are required to be completed expeditiously as far as possible by the end of February, 1996. However, the same would depend on the assessee's response to these notices. In this regard, I may mention that presently the evidences collected in the form of testimonies of various witnesses are utilized by the A.O. as it is, as decided in the conference, but in case the assessee demands cross examination, the said exercise would be required to be carried out here also, which may likely to delay the proceedings further. (underlining by us) Further progress in the matter shall be communicated from time to time and on concluding the assessment proceedings, draft orders shall be submitted for CIT's kind approval." Yours faithfully, K.M. Verma Dy. Commissioner of IT (Asst.) Special Range, Bhilai. 63....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty in the assessment order be properly taken care of. I may mention that I have drafted the basic skeleton of the order which could only be concluded after meeting out the various legal contentions raised by the assessee in his reply referred to above. On the basis of aforementioned facts I am of the opinion that the assessee may be allowed to get one more opportunity and by adjourning the case by one month as requested for by him. Further proceedings shall be taken after hearing from you which may kindly be expedited at your end." (underlining by us.) Yours faithfully, (K.M. Verma) Dy. Commissioner of IT, (Asst.) Special Range, Bhilai 65. In the said letter the AO has clearly written that though he has drafted the "skeleton of the order" but he want guidance of the "higher authorities so that legal infirmity in the assessment can be taken care of" these phrases speaks a dozen about how far the AO was conducting the proceedings independently and with open mind. 66. The Learned Tribunal has given the detail account of the series of event which has various instances how these proceedings were influenced by the superior authorities sitting at Delhi and Jabal....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... classification. This Court entertained no doubt that the direction given by the Board was invalid and it vitiated the proceedings before the Collector as well as the Government. Similarly in the present appeal the direction given by the Collector was invalid and the proceedings before the Deputy Superintendent or the Assistant Collector were vitiated. This position obtains in all the appeals although the type and quality of paper are different. The Central Government merely affirmed the order made by the Collector in each case and did not give any independent reasons for upholding the levy of duty made in accordance with the directions of the Collector. 69. That, the officers sitting at Delhi and Jabalpur has even interfered in the order especially the guidance has been sought by the AO to deal with the grounds raised by the assessee. In Re Sawyer and Ontario Racing Commission 99 DLR (3d) 561 (Onterio Curt of Appeal) the court held that it is improper for the prosecuting counsel to write reasons for the decision of tribunal which has found a person guilty of a breach of its rules and which has imposed a penalty for the breach. This is so even though Counsel Played no part in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ever an evil. A court has no power to ignore that provision to relieve what it considers a distress resulting from its operation." (See Martin Burn Ltd. v. Corpn. of Calcutta [AIR 1966 SC 529], AIR p. 535, para 14 and Rohitash Kumar v. Om Prakash Sharma [(2012) 13 SCC 792 : AIR 2013 SC 30].) 75. The Supreme Court in CIT v. U.K. Paints (Overseas) Ltd. 2023 SCC OnLine SC 818, held as under :- 1) In this batch of appeals, the assessments in case of each Assessee were under Section 153-C of the Income Tax Act, 1961 (for short, 'the Act'). As found by the High Court in none of the cases any incriminating material was found during the search either from the Assessee or from third party. In that view of the matter, as such, the assessments under Section 153-C of the Act are rightly set aside by the High Court. However, Shri N Venkataraman, learned ASG appearing on behalf of the Revenue, taking the clue from some of the observations made by this Court in the recent decision in the case of Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell P. Ltd., Civil Appeal No. 6580/2021, more particularly, paragraphs 11 and 13, has prayed to observe that the Revenue may be permitte....