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2004 DIGILAW 880 (MP)

Harkatwat and Co. v. Commissioner of Income-Tax

2004-11-02

A.M.SAPRE, ASHOK KUMAR TIWARI

body2004
Judgment ( 1. ) THIS is a reference made by the Income-tax Appellate Tribunal at the instance of the assessee under Section 256 (1) of the Income- tax Act, 1961, in R A. No. 105/ Ind of 1992, which in turn arises out of an order dated August 31, 1994, passed by the Income-tax Appellate Tribunal in I. T. A. No. 829/ind of 1989 to this court for answering the following two questions of law : "1. Whether the Tribunal was justified in confirming the penalty under Section 271 (l) (c) of the Act, when under Section 69a the cash of Rs. 1,35,000 found on July 9, 1982, is not assessable in the assessment year 1984-85 ? 2. Whether the Tribunal was justified in confirming the penalty without disposing of the grounds of appeal claiming immunity under the amnesty scheme ?" ( 2. ) IN order to answer the question referred, the facts stated in the statement of case drawn by the Tribunal need to be taken note of infra. ( 3. ) THE dispute relates to the assessment year 1984-85. It pertains to imposition of penalty by the Assessing Officer on the assessee under Section 271 (l) (c) of the Act. ( 4. ) AS is clear from the mere perusal of the order dated August 31, 1994, passed by the Tribunal in appeal (I. T. A. No. 829/ind of 1989) filed by an assessee in our opinion, question No. 2 referred to supra deserves to be answered in favour of the assessee and against the Revenue. ( 5. ) IT is a fact recorded in the statement of case drawn that the assessee had raised a plea before the Tribunal in his appeal against the order of the Commissioner of Income-tax (Appeals) to the effect that no penalty could be levied on them due to immunity given under the amnesty scheme. It is also a fact recorded that no finding on this plea was returned either accepting this plea or rejecting it in the final order which resulted in upholding of the penalty imposed under Section 271 (l) (c) of the Act. ( 6. It is also a fact recorded that no finding on this plea was returned either accepting this plea or rejecting it in the final order which resulted in upholding of the penalty imposed under Section 271 (l) (c) of the Act. ( 6. ) IN a case where a party raises a specific plea in support of this contention before an appellate authority (Tribunal) in the appeal then it is the legal obligation of the appellate authority to decide the plea so raised on its merits strictly in accordance with law. Indeed, Rule 11 of the Income-tax Appellate Tribunal Rules, 1963, empowers the Tribunal to decide the grounds so raised by the appellant in the memo of appeal as also decide those grounds not so raised suo motu in case it feels that such ground does arises. The only requirement in such eventuality is to ensure compliance of the proviso to Rule 11 before any finding is returned. ( 7. ) A reading of Rule 11 of the Appellate Tribunal Rules, 1963, does indicate the vast powers conferred by the Act/rules on the Tribunal while deciding the appeal. Indeed, the Tribunal being the last court of appeal so far as the issue relating to the facts are concerned, a duty is cast upon the Tribunal while deciding the appeal to see that a finding is returned on each and every ground raised by the appellant in their/his appeal and/or on the ground pressed in service for assailing the impugned order. Not giving a finding or not decidi\ng the ground though raised vitiates the order and causes prejudice to the appellant. It is for the reason that it deprives them of one of their valuable legal right to get rid of the adverse order passed against them by a lower authority. ( 8. ) COMING to the facts of this case, the assessee suffered a penalty order under Section 271 (l) (c) of the Act. He challenged the same before the Commissioner of Income-tax (Appeals) unsuccessfully and hence, carried the matter further in second appeal before the Tribunal. One of the grounds on which the penalty order was being assailed by the assessee was based on immunity afforded to an assessee under the amnesty scheme. He challenged the same before the Commissioner of Income-tax (Appeals) unsuccessfully and hence, carried the matter further in second appeal before the Tribunal. One of the grounds on which the penalty order was being assailed by the assessee was based on immunity afforded to an assessee under the amnesty scheme. It was a legal ground and hence, ought to have been dealt with on its merits by the Tribunal by giving a finding either allowing it or rejecting it. In any event, the finding on legal ground was called for from the Tribunal with reasons in support of their conclusion. ( 9. ) IN view of the aforesaid discussion, we answer question No. 2 in favour of the assessee and against the Revenue. In other words, we answer question No. 2 by holding that the Tribunal was not justified in confirming the penalty without disposing of the grounds of appeal claiming immunity under the amnesty scheme. Since, question No. 2 has been answered in favour of the assessee and against the Revenue, hence, we decline to answer question No. 1 as in our opinion it has become now academic so far as this reference is concerned. ( 10. ) NO costs.