Madhya Pradesh High Court
Commimoner Of Income Tax vs Abhyeshwar on 7 December, 1998
Equivalent citations: (1999)153CTR(MP)372
ORDER
BY THE COURT:
Revenue first filed this application under s. 256(1) of IT Act requiring Tribunal to refer following two questions for opinion of High Court:
'(i) Whether, on the facts and circumstances of the case, the Hon'ble Tribunal was justified in law in deleting the penalty of Rs. 57,810 levied by the AO under s. 271B and upheld by the learned CIT(A)?
(ii) Whether, on the facts and in the circumstances of the case, the Honble Tribunal was justified in law in allowing by admitting additional evidence without affording opportunity to Revenue, despite the material on record against assessee's claim in the matter?"
2. The Tribunal on consideration of the matter rejected the application by order dt. 13th May, 1998, on the ground that stated questions were questions of fact and not law 'and, therefore, did not warrant any reference.
3 It transpires that assessee, a co-operative society was charged of delay in obtaining the audit report pertaining to asst. yr. 1986-87. Penalty proceedings were initiated against it and a penalty of Rs. 57,810 was imposed by AO rejecting the explanation that there was a reasonable cause for delay. Assessee took appeal before the CIT(A) but failed. Society thereafter filed an appeal before the Tribunal and invited its attention to letter dt. 2nd Feb., 1992, addressed by the co-operative Inspector to CIT, wherein it was stated that audit report could not be submitted before 30th June, 1986, due to heavy departmental workload. A certificate from Asstt. Registrar, Co-operative Societies was also filed in support. Upon this Tribunal recorded its satisfaction and cancelled the penalty on the reasonable cause shown. Revenue thereafter filed application under s. 256(1) seeking reference of the above stated questions to this Court which was rejected on the ground that stated questions involved questions of fact.
4. There is no dispute that it fell within the domain of Tribunal to record its satisfaction whether any default committed in obtaining audit report was supported by any reasonable cause. Once Tribunal felt satisfied that there was a reasonable cause for delay, the matter involved a question of fact and did not give rise to any question of law and, therefore, warranted no reference to this Court.
5. Shri Dubey argued that Revenue was not given any opportunity against the additional evidence brought on record by the Tribunal viz. letter dt. 2nd Feb., 1992. He relied on a judgment of this Court in Uttam Construction Co. vs. CIT (1986) 50 CTR (MP) 261 : (1985) 156 1Y7R 459 (MP) 7, in support. There can be no quarrel with the proposition that denial of principles of natural justice in a given case could raise a legal question. But in the present case it was again a question of fact. It is not in dispute that Revenue was represented when documents explaining delay by assessee were considered and that matter was considered and disposed of after hearing both parties. Therefore, the question of Tribunal bringing any additional evidence on record at the back of Revenue does not arise and involves a factual inquiry in the matter. The Tribunal had, therefore, rightly rejected Revenue's application under s. 256(1) and this application also deserves the same fate and is dismissed.