Andhra HC (Pre-Telangana)
A.K. Babu Khan (By Legal ... vs Commissioner Of Wealth-Tax on 5 September, 1974
Equivalent citations: [1976]102ITR757(AP)
JUDGMENT Obul Reddi, C.J.
1. The question referred for our decision is whether, on the facts and in the circumstances of the case, ex parte assessments having been made by the Wealth-tax Officer, which were proper on the basis of the material available to him at the time of making them, the legal representative of the deceased-assessec is entitled in law to produce before the Tribunal further evidence which was not produced before the lower authorities.
2. To show that the legal representative of the dcceased-assessee is entitled to produce before the Tribunal additional evidence, the learned counsel appearing for the legal representative of the deccased-assessee placed strong reliance upon Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. In order to determine the applicability of Rule 29, it is necessary to state the relevant facts. The assessee was one A.K. Babu Khan who died on October 2, 1968. He was assessed to wealth-tax ex parte by the Wealth-tax Officer as he did not submit the returns in any one of the five relevant assessment years 1959-60, 1960-61, 1961-62, 1962-63 and 1963-64. Several notices were served upon him before best judgment assessments were made in the said assessment years. The Wealth-tax Officer assessed him to wealth-tax after referring to the records of the case and valuing his half share in the immovable properties held by him jointly with others. Against those best judgment assessments the deceased-assessee preferred appeals before the Appellate Assistant Commissioner of Wealth-tax. Even before the Appellate Assistant Commissioner, though the deceased-assessee took time to adduce evidence, no evidence was produced by him in support of his contention that the wealth, as estimated for the relevant assessment years, was not computed on any reasonable basis. After his death, his legal representative filed the appeals before the Tribunal assailing the orders of the Appellate Assistant Commissioner confirming the orders of assessment passed by the Wealth-tax Officer. The case of the legal representative before the Tribunal was that he should be afforded an opportunity to produce additional evidence. The Tribunal, after considering the submission made on behalf of the legal representative, saw no reason to allow the application filed under Rule 29 of the Rules. The legal representative, therefore, filed an application under Section 27(1) of the Wealth-tax Act for reference of the question of law to this court.
3. Mr. Habeeb Ansari, learned counsel appearing for the legal representative of the deceased-assessee, contended that the Tribunal has not considered the scope and effect of the words " or for any other substantial cause" occurring in Rule 29 and, therefore, it is fit case where it should be held, having regard to the fact that the legal representative is in possession of the material which became available to him subsequent to the death of the assessee, that he should be allowed to produce that evidence.
4. Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, reads:
" The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or if the Income-tax Officer has decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by him or not specified by him, the Tribunal may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. "
5. This is not a case where the Wealth-tax Officer had decided the case without affording sufficient opportunity to the assessee to adduce evidence. Any number of adjournments given by the Wealth-tax Officer or by the Appellate Assistant Commissioner were not availed of by the assessee to place an iota of evidence with the result that the Wealth-tax Officer and the Appellate Assistant Commissioner had to determine the net wealth of the assessee ex parte. It is also not a case where the Tribunal required any documents to enable it to determine the question of the net wealth of the assessee. It is purely within the discretion of the Tribunal to permit additional evidence to be adduced to enable it to pass orders or, in its opinion, if there is any substantial cause for receiving additional evidence.
6. The expression " or for any other substantial cause" occurs in Rule 27(1)(b) of Order 41, Civil Procedure Code, and this expression has been the subject-matter of decisions by the Privy Council, Supreme Court and High Courts. In Parsotim Thakur v. Lal Mohar Thakur, AIR 1931 PC 143 it was held that the words "for any other substantial cause" must be read with the word "requires" in the beginning of the sentence and it is only where the appellate court 'requires any document to be produced or any witness to be examined that this rule will apply. The discretion to receive additional evidence is to be exercised only when any point is required to be cleared up in the interests of justice. This power given to the Tribunal has to be exercised cautiously and sparingly in order to advance the interests of justice. Rule 29 is not intended to allow an assessee who has been unsuccessful throughout to patch up the weak parts of his case or to fill up omissions.
7. It is well settled that a party guilty of remissness and gross negligence as in this case is not entitled to indulgence being shown to adduce additional evidence. The assessee had ample opportunities and year after year, he was given opportunities to produce material so that assessment could be made on a consideration of the material placed by him. Merely for the reason that the legal representative of the deceased-assessee has come on record at the stage of second appeal before the Tribunal, it will not entitle him to say that he should be afforded sufficient opportunity to dispute the assessments made by the Wealth-tax Officer. He cannot put himself in a better position than the assessee himself. The words "for any other substantial cause" have been clearly held to refer to the requirement of the court. That position is made clear by the Privy Council in Parsotim's case.
8. Satyanarayana Raju J. (as he then was) in Bobbili Gowresu v. Kottu Subhadramma, AIR 1957 AP 961, 964 while construing Rule 27 of Order 41, Civil Procedure Code, observed :
" ......the court must be satisfied that it is necessary for the disposal of the case that the document sought to be admitted must be received in evidence or in the alternative, there must be sufficient cause."
9. The Supreme Court in Arjan Singh v. Kartar Singh, observed :
"If the additional evidence is allowed to be adduced contrary to the principles governing the reception of such evidence, it will be a case of improper exercise of discretion and the additional evidence so brought on the record will have to be ignored and the case decided as if it is nonexistent."
10. Dealing with the scope of Rule 29, a Division Bench of the Madhya Pradesh High Court in Commissioner of Income-tax v. Babulal Nim, [1963] 47 ITR 864 (MP) held that the admissibility of additional evidence under Rule 29 depends on whether or not the Tribunal requires it to enable it to pass orders or for any other substantial cause.
11. There is also nothing to suggest from the order of the Tribunal that it had not exercised its discretion properly in refusing to receive the additional evidence sought to be produced by the legal representative. We, therefore, answer the question in the negative and against the assessee.
12. The costs will be paid by the legal representative of the deceased-assessee.
13. Advocate's fee Rs. 250 (Rupees two hundred and fifty only).
14. Question answered in the negative.