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24. Learned Departmental Representative at this stage referred to order-sheet entry, dt. 12th August, 1994 and submitted that the documents in general were discussed by AO with learned counsel for the assessee and that it being a group case, documents were confronted to the counsel together. Learned counsel referred to letter of AO dt. 22nd April, 1996, and submitted that p. 2 of APB only was confronted. Shri Sunil Mukhi made a statement at the Bar that the other documents were not confronted to the assessee.

26. Learned counsel, in rejoinder, strongly assailed the certificate filed by Shri Varinder Mehta, AO. He submitted that it is not clear as to whether the said document addressed by Shri Mehta to the Bench is a letter or a certificate or an affidavit. He submitted that since Shri Mukhi made a statement at the Bar that document at Sr. Nos. 4-12 of the DPB were never confronted, former AO has written this letter which may be taken as a certificate and that the same is a prelude to the statement made by Shri Mukhi. He further submitted that documents seized from the third party are not a direct evidence and that DPB was filed in pursuance of direction of the Bench. He further submitted that the said certificate would mean that none of the documents placed in the DPB form part of the assessee's report. He submitted that the certificate at the most says that certain papers were confronted to Shri Mukhi. He further submitted that a certificate is not evidence under the CPC or under the Evidence Act and such a certificate is only confirmation of the Department's assertion and that it cannot be taken as evidence that documents were actually confronted. He also submitted that an affidavit is a piece of evidence once it is given in Court and similarly statement at Bar is evidence. He further submitted that whereas affidavit is declaration of facts, a certificate is only confirmation of assertion. He also submitted that the facts can be proved by evidence or through affidavit and that knowledge and belief are important limbs of an affidavit. He further submitted that formation of belief is on the basis of source of information and knowledge is based on facts which could be proved. He emphasised that the impugned certificate is based on conjectures and surmises of Shri Virender Mehta, who was AO in the year 1996, and who is now ADI. He further emphasised that Shri Mehta was acting on memory and that such certificate was not admissible as evidence. He referred to the decision of Hon'ble Supreme Court in the case of ITO vs. Madnani Engg. Works Ltd. (supra), wherein with reference to counter-affidavit filed by the Department in which grounds were not disclosed on the plea that it would cause prejudice to the interest of the Revenue, it was held that the said counter-affidavit was not tenable and that mere disclosure of belief without setting out material on the basis of which belief was arrived at was not sufficient. He further, referred to the decision of Hon'ble Delhi High Court in the case of Asoke Kumar Sen vs. ITO (1981) 132 ITR 707 (Del). He also referred to the decision of Hon'ble Supreme Court in the case of A. K. K. Nambiar vs. Union of India AIR 1970 SC 652, wherein the apex Court referred to the provisions of CPC, 1908, Order 19, r. 1, and held that affidavit not properly verified cannot be admitted in evidence. It further observed that the importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations. He further referred to the decision of Hon'ble Supreme Court in the case of CBI vs. V. K. Shukla, copy placed on file, wherein it was held in the context of ss. 34 and 18 of the Evidence Act that books of account kept in regular course of business were admissible in evidence but entries in the books have to be proved by independent evidence and that such entries are not by themselves sufficient to charge any person with liability. He further referred to the decision of Hon'ble Allahabad High Court in the case of Juggi Lal Kamla Path vs. Ram Janki Gupta & Anr. AIR 1962 All 407, wherein in the context of Order 19, r. 1 of CPC 1908, it was observed that where the Court had before it a duly sworn affidavit of the pairokar of the plaintiff in support of his suit dismissed for default of appearance and there was no counter-affidavit in traverse of the allegations contained in that affidavit, it was not open to the Court to disbelieve the allegations of the plaintiff in the affidavit. Hon'ble High Court relied on the decision reported in AIR 1956 SC 554. In view of the foregoing case law, learned counsel asserted that the aforesaid certificate filed by Shri Varinder Mehta, AO, has no legs to stand. He also referred to the provisions of r. 10 of the IT (Appellate Tribunal) Rules, 1963, wherein it is provided that 'where a fact which cannot be borne out by, or is contrary to, the record is alleged, it shall be stated clearly and concisely and supported by a duly sworn affidavit'. He, therefore, urged that the said certificate should be rejected outrightly, as it was no evidence. He referred to the contents of para 1 of the certificate, wherein it is mentioned that 'all the relevant issues/documents were discussed'. It further refers to a clear understanding with Shri S. Mukhi. Learned counsel submitted that no assessee would empower its counsel to reach any understanding with AO without reference to the list of seized documents and knowing the terms and conditions of the understanding. He further submitted that AO had drawn adverse inference on the basis of understanding without putting any question and that there was no minutes of the meeting or the said observations. He pointed out that the name of Smt. Neena Syal did not occur in the list of documents inspected or handed over and that even Shri S. Mukhi is not mentioned in that list. He submitted that copies of certain documents were given to Shri Surinder Panwar. Learned counsel pointed out that in the said certificate, Shri Varinder Mehta, AO, is making a confession that due to large number of seized documents, paucity of time, complexity of issues and lengthy proceedings, the record confronted documents were recorded in general order on order-sheet and that documents were not entered or mentioned anywhere. He further submitted that AO did not seek any reply from the assessee on any specific documents. He further submitted that Shri Varinder Mehta, AO, has mentioned that authorised representative of the assessee was clear regarding documents confronted and for relevant proceedings'. He mentioned that how the then AO could certify about state of mental charity of S. Mukhi. He referred to the decision of Hon'ble Supreme Court in the case of CIT vs. Durga Prasad More (supra), wherein it was observed that though an apparent statement must be considered real until it was shown that there were reasons to believe that the apparent was not the real, in a case where a party relied on self-serving recitals in documents, it was for that party to establish the truth of those recitals. He further referred to para. 2 of the certificate, wherein Shri Varinder Mehta, AO, has mentioned that he had written a letter on 22nd April, 1986, to Smt. Neena Syal. He referred to p. 23 of APB, where a copy of the said letter is placed and wherein reference has been made to document A-20 and the assessee has been asked to explain the source and acquisition of Rs. 7.83 lakhs, which has been mentioned by AO as price of land purchased at Mirpura in August, 1995. Learned counsel pointed out that the document A-20 was found from the residence of Smt. Pamila Syal and Shri A. L. Syal, as mentioned in para 3 of the assessment order. He also pointed out that the assessee had filed return on 2nd March, 1996, and that by 22nd April, 1996, when AO asked the assessee to explain the source of acquisition of Rs. 7.83 lakhs, he would have received an appraisal report and other documents. He then referred to order-sheet entry, dt. 1st July, 1996, and submitted that AO only asked about source of acquisition of Mirpura property and no mention was made about seized documents. He further referred to order-sheet entry, dt. 9th August, 1996, when Shri S. Mukhi filed balance sheet and cash flow statement. Even at that stage, there was no question asked about documents of Shri Vinod Viyogi. He further referred to order-sheet entry dt. 12th August, 1996, and submitted that the matter relating to construction of house was discussed and documents A-6, A-7, A-11, etc. were only confronted. He further referred to reply given by the assessee, which is placed at pp. 72-73 of APB. He also submitted that assessment was completed on 24th September, 1996, and that sequence of events would show that AO never confronted the assessee with papers now filed by the Department. He pointed out that AO is only relying on one document, i.e., A-8, and that veracity of the other papers in Departmental paper book (DPB) is not there. He, therefore, emphasised that the documents placed at Sr. Nos. 4 to 12 of DPB were never confronted to the assessee. He further urged that the certificate now filed is self-contradictory when AO himself had not relied on other documents placed in DPB. He also pointed out that if papers were confronted to the assessee, there would have been some reply by the counsel. He submitted that there was no prayer by the Department for admission of additional evidence under the IT (Appellate Tribunal) Rules and that the Department was only attempting to improve its case. Learned counsel also submitted that the assessee was not taking any ground of violation of principles of natural justice and that, therefore, no second innings should be provided to the Department.

32. Learned Departmental Representative also made a statement that even document A-8, p. 14, is sufficient to make addition in the case of the assessee and in case the Tribunal takes a decision that the said document had not been confronted, let the matter be restored back to the file of AO.

33. We have carefully considered the rival submissions and have perused order of AO, various papers placed in the assessee's paper book as also the Department's paper book to which our attention was invited during the course of hearing. We have also seen the case law relied upon by the parties. It is observed that AO while making addition of Rs. 4.83 lakhs has mainly relied on document No. A-8, p. 14, seized from the residence of Shri Viyogi. He also referred to document A-20, p. 5, seized from the resident of Smt. Pamila Syal and Shri A. L. Syal at the time of asking the assessee to explain the source and acquisition of Rs. 7.83 lakhs, p. 23 of APB. In reply, pp. 8-11 of APB, it was submitted that the assessee had purchased land on 28th August, 1995, for Rs. 3 lakhs and a further amount of Rs. 18,000 was spent on stamp paper and Rs. 2,000 as miscellaneous expenditure and that the said amount of Rs. 3.20 lakhs was duly declared in balance sheet filed before AO. The assessee also stated that the alleged amount of Rs. 7.83 lakhs was not mentioned either in the seized document A-20 or in the registration deed. AO also mentioned in assessment order that the assessee had denied payment of any premium and that seller of land had also filed an affidavit in response to summons under s. 131, wherein she denied having received any premium. AO further referred to contention of the assessee that there were two proposals - one by individual and family and the other by GFI Ltd. - and that individuals bought land on cash down payment but GFI Ltd. was offering sellers FDRs for higher amounts. He rejected the plea of the assessee by referring to p. 14 of item A-8 seized from the residence of Shri Viyogi and concluded that the said document confirmed that premium of Rs. 4.83 lakhs was paid over and above the cost mentioned in the registration deed. It is clear that the explanation given by the assessee in her reply, pp. 7-11 of APB, has not been controverted by AO and that he did not make any further enquiry from the assessee in this respect. It is also observed from the preliminary and final statements, pp. 31-35 of APB, that no question had been put to the assessee with respect of any premium paid by her for purchase of plot at Mirpura from Smt. Ajaib Kaur. AO came to the conclusion that premium had been paid by the assessee to the seller of the plot only on the basis of document A-8, p. 14, which was seized from the residence of Shri Viyogi and which was not specifically confronted to her. We may make here a reference to order-sheet entry, dt. 12th August, 1996, recorded by AO in the case of the assessee, wherein it is mentioned that in case of Mirpura property, on 24th August, 1995, registration is done for Rs. 3 lakhs and, as per documents seized, this is for Rs. 7.83 lakhs. Explain why Rs. 4.83 lakhs should not be treated as undisclosed income ? This order-sheet entry has been the subject-matter of hot debate before us between both the parties. While the Department filed a certificate from the then AO, Shri Varinder Mehta, the assessee filed affidavits from Shri Sunil Mukhi, Advocate, and Shri A. L. Syal. Shri Mukhi also made a statement at the Bar that the impugned document No. A-8 and the diaries seized from Shri Viyogi were not specifically confronted by AO to him. This statement at the Bar led to filing of aforesaid certificate by the Department and the aforesaid affidavits by learned counsel and Shri A. L. Syal. The contents of the said certificate and affidavits have been mentioned in the foregoing paragraphs of this order. It is observed that AO's assertions made in the said certificate are general in nature and the fact that the documents seized from Shri Viyogi were specifically confronted to the advocate of the assessee/assessee is not born out. Further, the Department declined to file any counter-affidavit of AO in reply to affidavits filed by Shri Mukhi and Shri A. L. Syal. Learned Departmental Representative referred to the provisions of s. 293 of the Act and submitted that AO filing counter-affidavit may make him liable for civil prosecution. We may mention that actually the provisions of s. 293 provide a protection to the officers of the Government for anything done or intended to be done in good faith under the provisions of the Act and bar the filing of suits in civil Courts so as to set aside or modify any proceedings taken or order made under the said Act. The aforesaid facts thus show that the concerned AO was in a state of doubt/suspicion with reference to the actual confrontation of the material seized from the residence of Shri Viyogi to the assessee. Thus, having regard to the decision of Hon'ble Supreme Court reported in AIR 1970 SC 652 (supra) and of Hon'ble Allahabad High Court in AIR 1962 All 407 (supra) and in the circumstances, we cannot help but give due weightage to the averments made by learned counsel Shri Mukhi and Shri A. L. Syal in the affidavits filed before us, which cannot be legally ignored, in the absence of any counter-affidavit filed before us, which cannot be legally ignored, in the absence of any counter-affidavit filed from the Department.

35. We may now deal with plea of learned Departmental Representative that in case the Tribunal comes to the conclusion that the documents in question have not been confronted to the assessee, the matter may be restored to the file of AO. We may refer here to the scheme of Chapter XIV-B, inserted by the Finance Act, 1995, w.e.f. 1st July, 1995, and the object underlying the said provisions. In the Budget Speech given by the then Finance Minister, he mentioned that in order to make the procedure more effective. I am proposing a new scheme under which undisclosed income detected as a result of search shall be assessed separately at a flat rate of 60 percent. An appeal against the order can be filed directly before the Tribunal" refer Para 71 of 212 ITR (St) 87. In the notes on clauses to cl. 32 of the Finance Bill, 1995, refer 212 ITR (St) 306-309, it is mentioned that 'in order to make the procedure of assessment of search or requisition cases effective, it is proposed to introduce new provisions for assessment of undisclosed income detected as a result of search or requisition'. It is further mentioned that the undisclosed income of block period shall be taxed at a flat rate of 60 per cent specified in s. 113K and that no penalty under ss. 271(1)(c), 271A, 271B or 273 or interest under ss. 234A, 234B or 234C will be levied or imposed. Notice under s. 148 of the Act has also been dispensed with. It is also mentioned that the order of assessment for the block period shall be passed by an AO not below the rank of Asstt. CIT with the previous approval of the CIT. It is further mentioned that proceedings under s. 132(5) will no longer be necessary for searches initiated after 30th June, 1995. It is also mentioned that the provisions of ss. 68 and 69A to 69C shall, as far as may be, apply in computing the undisclosed income for the block period. It is also mentioned that the onus of proving to the satisfaction of the AO that any undisclosed income has already been disclosed in any return of income filed by the assessee before the date of search will be on the assessee. It is further mentioned that brought forward losses or unabsorbed depreciation will be allowed to be carried forward for set off in regular assessments and will not be set off against the undisclosed income determined in the block assessment. It is further mentioned that where the AO finds that any undisclosed income belongs to any person other than the person in whose case the search was conducted, the AO having jurisdiction over such other person will proceed against him in accordance with the provisions of the said Chapter. In the memorandum explaining the provisions in Finance Bill, 1995 [refer 212 ITR (St) 345-349], it is also mentioned that under the present scheme, valuable time is lost in trying to relate the undisclosed incomes to the different years and that tax evaders generally manage to divert the focus to procedural and legal issues and often invent new evidence to explain undisclosed income. It is also mentioned that in order to make the procedure of assessment of search cases cost-effective, efficient and meaningful, it is proposed to introduce a new scheme of assessment of undisclosed income determined as a result of search under s. 132 or requisition under s. 132A. It is also mentioned at p. 347 that where the assessee offers no explanation about the nature and source of acquisition of certain assets or the explanation offered by him is not, in the opinion of the AO, satisfactory, the value of such assets may be deemed to be the income of the previous year in which the search took place'. Thus, it will be seen that the new provisions are more stringent inasmuch as the assessee is liable to pay tax at 60 per cent in relation to undisclosed income, assessment order is to be made by an officer not below the rank of Asstt. CIT and with the previous approval of the CIT. We, therefore, feel that the provisions of the new Chapter have placed a greater burden on the Departmental authorities to comply with the essential provisions of law and that these provisions have to be construed strictly. Thus, in a situation where AO has failed to comply with the basic provisions of s. 69/69B, whereunder the impugned addition has overtly been made, it is difficult to accept the plea of learned Departmental Representative that the matter may be restored to the file of AO, so that the requisite material can be confronted to the assessee and then the addition made. We feel that it is not the function of the Tribunal to further allow opportunity to the AO so as to cover up legal lapses made by him while making addition, by restoring the matter back to his file. Moreover, the Department is only respondent in this case. We, therefore, turn down this plea of learned Departmental Representative. We may mention that learned Departmental Representative also advanced the plea of merger of function of first appellate authority under s. 251 and the powers of the Tribunal under s. 254. He had argued that since the Tribunal is the first appellate authority in this case, it could restore the matter to the file of AO in case it feels that certain documents have not been confronted to the assessee. We feel that there is no such intention of the legislature in enacting the provisions of the new Chapter XIV-B and the amendments made in s. 254. In case there was any such intention, the law, would have been amended to make this intention clear. We feel that in fact the legislature had only reduced one appeal under the new scheme. We may mention that rather after operation of the new provisions for a period of one year, the legislature has again amended the provisions, so that the first appeal lies to the CIT(A). We may further mention that the power of remand under s. 254 is required to be exercised in a disciplined and responsible manner and that the same cannot be invoked in a case where AO has not cared to follow the provisions of s. 69/69B inasmuch as no explanation has been called for by AO in relation to the documents relied upon by him for making the impugned addition and further the said documents which were found with other persons, had not been specifically confronted to the assessee. We may refer to the decision of Hon'ble Gauhati High Court in the case of Jeypore Timber and Veneer Mills (P) Ltd. vs. CIT (1982) 137 ITR 415 (Gau), wherein while construing the expression 'such orders thereon as it thinks fit', it was observed that the word 'thereon' is a serious constriction on the exercise of the power by the Tribunal and that it can decide only the points or grounds raised before it whereas the IT authorities can travel beyond the grounds and consider the entire assessment and that the Tribunal has no power of enhancement of any penalty or assessment nor can it remand a case with the object of such enhancement. It further observed that the power of remand is within discretion of the Tribunal, but the power being judicial, it must be exercised judiciously, according to rule and not according to humour, the order must be legal and regular, disciplined as opposed to capricious. We may also refer to the decision of Hon'ble Patna High Court in the case of Chunnilal Surajmal vs. CIT (1986) 160 ITR 141 (Pat), where reassessment proceedings were taken in the case of HUF and on inspection of accounts and bank deposits, it was found that the bank deposits were in the name of wife of Karta of HUF and that the Karta's wife was not asked for explanation regarding the deposits and the bank deposits were included in the income of the HUF. It was held that reassessment were not valid and direction by the Tribunal to investigate bank deposits was not justified. In view of the foregoing, we reject the plea of the Revenue to restore the issue to the file of AO and delete the impugned addition of Rs. 4.83 lakhs.