Madhya Pradesh High Court
Commissioner Of Income Tax vs Digvijay Traders. on 3 August, 1996
Equivalent citations: (1997)137CTR(MP)224
Author: S. B. Sakrikar
Bench: S. B. Sakrikar
ORDER
S. B. SAKRIKAR, J. :
This order governs the disposal of the aforesaid connected MCCs arising out of common order dt. 15th July, 1991 passed by the Tribunal in reference application Nos. 60 to 63/Ind/91 arising out of common order passed in ITA Nos. 538 to 540/Ind/89 and ITA No. 494/Ind/88, on 13th Dec., 1990.
2. The applicant/Department in all the aforesaid cases filed the application under s. 256(2) of the IT Act, 1961 (for short, the Act) seeking direction of this Court to refer the undernoted question said to be of law for the opinion of this Court :
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in setting aside the order of the CIT made under s. 263 when there was adequate material as per the CITs order under s. 263 indicating that the order passed by the IAC was prejudicial to the interests of Revenue ?"
3. The facts of the case lie in narrow compass. The original assessments for asst. yrs. 1982-83 to 1985-86 with regard to non-applicant-assessee were completed by IAC. Subsequently, search and seizure under s. 132(1) of the Act was conducted at the business premises of the assessee as well as the residence of the partners on 23rd Aug., 1984. During the search some loose papers were found and seized which revealed that the assessee had income from on money on account of sale of vegetable oil manufactured by M/s. Mansinghka Oil Mills, Khandwa. During the course of proceedings under s. 132(5) of the Act, the assessee was confronted with the information contained in the loose papers and the assessee had admitted earnings outside the books of accounts. On the basis of the admissions, a notice under s. 148/147(a) was issued to the assessee. At the reassessment stage, the then IAC noticed that real on money received by the assessee was much more. Accordingly, he worked out the on money against the on money admitted by the assessee in the course of proceedings under s. 132(5) of the Act.
4. The assessment was completed by the AO in the status of URF. The loose papers seized further indicated that the assessee had incurred certain expenses which had been considered by the AO and he had also not investigated the sources from which these expenses were met out by the assessee. The CIT came to the conclusion that the assessment made by the IAC was erroneous and prejudicial to the interests of the Revenue. The CIT after giving opportunity to the assessee passed an order under s. 263 and cancelled the assessment order for de novo assessment.
5. Aggrieved by the order of CIT, the assessee filed appeal before the Tribunal. Before the Tribunal the assessee has submitted that the action of the CIT under s. 263 is wholly unjustified, illegal and unwarranted. It is further submitted that the ITO in his order under s. 132(5) proceedings and the IAC in assessment proceedings have considered each of the loose papers and arrived at the conclusion that the on money received by the assessee related to the period relevant to asst. yr. 1982-83 to 1985-86. It was contended that CIT had no fresh material to exercise powers vested under s. 263 of the Act.
6. The Tribunal on perusal of the record and submissions, observed that during the course of assessment proceedings under s. 132(5) of the Act and also during the course of assessment proceedings before IAC all loose papers were thoroughly examined and therefore, exercising power under s. 263 by the CIT holding that such assessment is erroneous would result in arbitrary exercise of powers. Accordingly, the Tribunal cancelled the order under s. 263 and restored the assessment orders passed by the IAC.
7. Aggrieved by the order of the Tribunal, the applicant-Department filed reference application under s. 256 of the Act for referring the aforesaid question said to be question of law for the opinion of this Court. The Tribunal by its order dt. 15th July, 1991, rejected the reference applications holding that there is no referable question of law raised in the case. Aggrieved by the order of rejection of reference application the Department has filed the present applications under s. 256(2) of the Act.
8. We have heard Shri A.M. Mathur learned senior counsel with Shri Vivek Saran for the applicant-Department and Shri S. K. Jain learned counsel for the non-applicant in all the aforesaid cases.
9. The contention of the learned counsel appearing for the applicant is that in view of the facts and circumstances of the case, the proposed question as labelled to be question of law does arise in the case for referring the question for the opinion of this Court.
10. In oppugnation, learned counsel appearing for the non-applicant contended that the finding of the Tribunal in second appeal is based upon the appreciation of evidence and as such it does not give rise to any question of law which is required to be answered by this Court.
11. On perusal of the record, it is found that CIT(A) had no fresh material on record to exercise powers vested under s. 263 of the Act. The ITO and IAC in the proceedings under s. 132 of the Act have considered each of the loose papers and arrived at the conclusion with regard to on money received by the assessee pertaining to asst. yrs. 1982-83 to 1985-86. The Tribunal after going through the record of the case has held that entire loose papers seized have been properly examined and proper assessments have been framed in the light of the fresh information and the assessments have been framed in accordance with law on the basis of the material and evidence. The Tribunal also observed that considering totality of the facts and circumstances of the case, the orders of the assessing authority for each of the year were neither erroneous nor prejudicial to the interests of the Revenue. It was also observed by the Tribunal that CIT has no jurisdiction to exercise powers under s. 263 of the Act to make fishy inquiries and to disturb the concluded proceedings without any valid material.
12. The aforesaid findings of the Tribunal are the findings of fact based on proper appreciation of the facts and evidence on record.
13. In CIT vs. Ashoka Marketing Ltd. (1976) 103 ITR 543 (SC) and in CIT vs. Kotrika Venkataswamy & Sons (1971) 79 ITR 499 (SC), it is held that conclusion based on appreciation of facts does not give rise to any question of law.
14. We find that the orders of the Tribunal are based on proper appreciation of facts and correct application of law. We, thus, hold that there is no referable question of law presented in these cases.
15. Accordingly, we reject these applications but without any orders as to costs. Counsel fee for each side in each case is, however fixed at Rs. 750, if certified.
16. Retain this order in the record of Misc. Civil Case No. 30/92 and place its copy each in the records of the aforesaid three Misc. Civil Cases.