Commissioner of Income-tax and anr. Vs. S.N. Murali Mohan - Court Judgment

Excerpt:
- sections 138 & 143, second proviso: [jawad rahim, j] offence under-section 143- power of court to try cases summarily - the stage at which the power could be exercised the second proviso to section 143 - interpretation of - held, the non-obstante clause appearing in section 143 as notwithstanding anything contained in crp.c., the procedure prescribed under section 143 of the act has to be applied for trial of the accused for the offence under section 138 of the n.i.act. undoubtedly the accused is facing charge for the offence under section 138 of the act and keeping in mind the non-obstante clause appearing in section 143 of the act, what is envisaged under section 143 becomes applicable. the trial court must follow the mandate of section 143 of the act and not necessarily the provision of section 259, cr.p.c., in the resultant position, it can be said that in view of the words at the commencement of trial and during the course of trial, the power of the magistrate to decide as ot whether the case should be tried as summary case or warrant case could be exercised at any of the stages. thus, it could be affirmatively stated that there is no impediment to convert a case from summons case to warrant case for the offence under section 138 of the act either before commencement of trial or even after trial has commenced. - bangalore, which came to be allowed on january 20, 1998. being not satisfied with the same, the assessee filed an appeal before the income-tax appellate tribunal, bangalore bench, which came to be allowed on october 22, 2003, in toto. 5,61,067 could not be taxed in the hands of the assessee despite slips being found during search indicating such an income having been earned as well as the admission made by the assessee that there was unaccounted sales which was ignored, as the assessee had changed his version after search (not disproved) and, consequently, recorded a perverse finding. seshachala, contends that the tribunal without considering the order of assessment as well as the commissioner of income-tax (appeals), has deleted the unaccounted cash of rs. therefore, he contends that the consideration of the tribunal based on the loose slips which were not accounted properly by the asses-see even after providing reasonable opportunity by the assessing officer has to be held as bad in law. similarly, he contends that the tribunal has failed to see that the approved valuer has valued the diamonds seized based on the size, colour and quality. 11. so far as the first question is concerned, after carefully considering the order passed by the assessing officer as well as the order passed by the tribunal, we are of the opinion that the tribunal has not considered the entire case of the assessee properly.k.l. manjunath, j.1. the legality and correctness of the order passed by the income-tax appellate tribunal, bangalore, in i.t.a. no. 253/bang/ 1998, is called in question by the revenue.2. the case is pertaining to the assessment year 1991-92. the respondent-assessee filed the return of income on january 31, 1992, declaring the total income as rs. 19,66,223 and the same was revised by filing a revised return on february 13, 1992, declaring the income as rs. 21,18,823. before filing the return of income, a search was conducted on the business premises on november 6, 1990, and several incriminating documents were seized. during the course of search, a statement was also recorded under section 132 of the income-tax act, 1961.3. during the course of assessment, the assessing officer proceeded to hold that cash of rs. 16,85,900 was seized during the search as the unaccounted cash of the assessee and the other two members of the joint family, namely, his father and brother. accordingly, a sum of rs. 5,61,967 was brought to tax in the hands of the assessee. similarly, during the course of search, a pouch containing diamonds were recovered from the bedroom of narasimhulu chetty the father of the assessee. the diamonds were valued from an approved valuer. based on the valuation report the same was also brought to tax. similarly, certain jewels which were unaccounted were also brought into tax.4. aggrieved by the order of assessment dated march 25, 1994, the assessee filed an appeal before the commissioner of income-tax (appeals)-ii. bangalore, which came to be allowed on january 20, 1998. being not satisfied with the same, the assessee filed an appeal before the income-tax appellate tribunal, bangalore bench, which came to be allowed on october 22, 2003, in toto. being aggrieved by the same, the revenue has filed this appeal.5. this appeal is pertaining to the deletion of unaccounted income of rs. 5,61,967, income relating to unaccounted jewellery and also income relating to the value of diamonds. accordingly, the following substantial questions of law were framed by this court at the time of admission:(i) whether the tribunal was correct in holding that the cash seized from the assessee of rs. 5,61,067 could not be taxed in the hands of the assessee despite slips being found during search indicating such an income having been earned as well as the admission made by the assessee that there was unaccounted sales which was ignored, as the assessee had changed his version after search (not disproved) and, consequently, recorded a perverse finding.(ii) whether the tribunal was correct in holding that the unaccounted gold jewellery found during search cannot be brought to tax in the hands of the assessee as it was held to belong to the grand parents of the assessee by accepting the version of the assessee's father that his parents had sufficient jewellery by adducing proof showing photographs of his parents wearing jewellery which was accepted even though both of them were not identical.(iii) whether the tribunal was correct in holding that the diamonds should be valued at an average rate when the value of each diamond would vary from one set of diamond to the other due to its size, colour and combination and the same yardstick should be made applicable to recording an average.6. learned counsel for both the parties submit that question no. 2 with regard to unaccounted gold jewellery does not arise in the present appeal and, therefore, the same need not be considered by this court. accordingly, we confine ourselves to consider question nos. 1 and 3 only.7. learned counsel for the revenue, mr. seshachala, contends that the tribunal without considering the order of assessment as well as the commissioner of income-tax (appeals), has deleted the unaccounted cash of rs. 5,61,967 from the order of assessment even though there was a clear admission during the course of search by narasimhulu chetty stating that the cash seized would be declared as income by all the three persons equally. therefore, he contends that the consideration of the tribunal based on the loose slips which were not accounted properly by the asses-see even after providing reasonable opportunity by the assessing officer has to be held as bad in law. similarly, he contends that the tribunal has failed to see that the approved valuer has valued the diamonds seized based on the size, colour and quality. according to him, the tribunal relying upon the newspaper statement as on the date of seizure in regard to the value of diamonds, has granted the relief. therefore, he requested the court to set aside the order passed by the tribunal on these two questions of law.8. per contra, learned counsel for the respondent-assessee submits that the tribunal considering the materials placed by the assessee has rightly come to the conclusion that the cash seized was business income and that the assessee was able to prove that it was not unaccounted money, but it is accounted money based on the business turnover. he further contends that in so far as the value of diamonds is concerned, no substantial question of law arises as it is a question of fact which has been decided by the last fact finding authority. therefore, there is no necessity to consider the last question of law that has been formulated by this court.9. having heard the learned counsel for the parties, we have to consider the two substantial questions of law one with regard to deletion of rs. 5,61,967 in the hands of the assessee as business income and the other with regard to the value of diamonds.10. in so far as the valuation of diamonds are concerned, we are of the view that what was the value of the diamonds seized during the course of search is a question of fact and not a question of law. if the fact finding authority has given its finding, unless and until the revenue is able to prove that the appreciation of evidence by the tribunal is erroneous and illegal, this court cannot interfere with the said finding. therefore, we are of the view that the last question has to be answered against the revenue holding that the same is not a substantial question of law.11. so far as the first question is concerned, after carefully considering the order passed by the assessing officer as well as the order passed by the tribunal, we are of the opinion that the tribunal has not considered the entire case of the assessee properly. when the assessing officer has come to the conclusion that in spite of giving reasonable opportunity for the assessee to produce the documentary evidence, has passed an order of assessment and when such order has been confirmed by the commissioner of income-tax (appeals), the tribunal sitting in second appeal cannot interfere with the concurrent findings of the fact.12. we have also perused the order passed by the tribunal. the tribunal has accepted the loose slips which were seized during the course of search. but the assessing officer has come to the conclusion that the accounts are manipulated subsequent to the search. the same has not been properly considered by both the authorities. therefore, we are of the view, in order to consider question no. 1 whether the cash seized from the assessee amounting to rs. 5,61,967 could be taxable or not, has to be re-examined by the assessing officer by giving reasonable opportunity to the assessee.13. in the circumstances, this appeal is allowed in part without answering the substantial question of law. the matter is remanded to the assessing officer only to find out whether the cash of rs. 5,61,967 seized at the time of search can be brought to tax in the hands of the assessee or not by considering all the materials that may be produced by the assessee.