Tejraj Chopada Vs. Income Tax Officer - Court Judgment

Excerpt:
1. this batch of six appeals, three by the assessee and the other three by revenue, emanate from the orders passed by the cit(a) in 13th, 14th and 15 sept., 2004 in relation to the asst. yrs. 1992-93 to 1994-95.since common issues are raised in these appeals, we are, therefore, proceeding to dispose them by this consolidated order for the sake of convenience.2. the facts, as gathered from the assessment order, are that one shri durga prasad ojha, who was chief accountant of the assessee in the year 1994, was in the possession of parchis/loose papers wherein unaccounted income earned by the assessee was mentioned. later on, his relations with the assessee got strained and he left the job and became the complainant of the assessee, initially the matter was pursued by the assessee with the d.i. wing and the parchis were impounded by the then ddit (inv.) jodhpur on 16th march, 2001. subsequently, incriminating material in the form of handwritten parchis, as referred to above, was transferred to the concerned ao to be taken up in the assessment proceedings vide detailed report no. 595, dt. 19th march, 2001. the then dy. c1t, pali, who was the ao, issued notice under section 148 after recording the detailed reasons and getting the same approved from the cit. notice under section 148, dt. 29th may, 2001 was sent to the assessee through notice server, which was received on the same day by one shri mahaveer singh. in order to ensure proper service of notice, a copy was again sent through regd. post no. 184, dt. 29th may, 2001, which was also served. initially, the assessee did not file any return in response to notices under section 148. but, eventually on 20th march, 2003, the assessee filed return for all the years in question showing the same amount of income as reflected in the original returns.however, during the course of assessment proceedings, being carried out in the month of march 2003, the assessee filed writ petition with the hon'ble rajasthan high court on 29th march, 2003 and got further proceedings stayed on the same day. the assessment proceedings were resumed only after stay order was vacated by the hon'ble high court, on 1st sept., 2003, with certain directions as per mutual agreement, which are as under : 1. the petitioner will file preliminary objections within seven days and the assessing authority shall expeditiously decide the same by passing a reasoned order. 2. the assessing authority shall pass the assessment order in accordance with law after giving proper opportunity to the petitioner to cross-examine all the persons whose statements are recorded and .are relied upon by any it authority and shall also give an opportunity to rebut any document/material on which the department places reliance. 3. the assessing authority shall issue certified copies of all documents on which he is placing reliance. 4. it will be open for the petitioner to raise all the pleas raised in the writ petition including legality of the notice issued under section 148 in any subsequent proceedings.the preliminary objections filed by the assessee on 8th sept., 2003 were disposed of by way of reasoned orders on preliminary objections.it is further borne out from the assessment orders that certain copies were supplied to assessee on various dates in terms of above directions and an opportunity to cross-examine all the persons whose statements were relied upon by the it authorities were provided to the assessee.on 25th sept., 2003 and 6th oct., 2003. thereafter, a detailed questionnaire dt. 18th sept., 2003 was served upon the assessee requesting to produce the regular books of account. the assessee stated that he did not possess the books of account as these were burnt. in these circumstances, the ao, while resorting to the provisions of section 144, framed the assessments for all the years at rs. 62,20,574 (asst. yr. 1992-93), rs. 78,51,880 (asst. yr. 1993-94) and rs. 85,90,840 (asst. yr. 1994-95). the assessee went into appeal in all the three years assailing the assessment orders on several counts.3. in the first ground, it was contended before the cit(a) that the ao had not honoured and obeyed the binding direction of hon'ble jurisdictional high court as regards the issuance of certified copies, rebuttal of documents relied upon by the department and complete cross-examination of the persons whose statements were recorded and relied upon by the it authority. the cit(a) disposed of all the appeals by allowing some relief in all the years. both the sides are in appeal against their respective stands.4. at the outset, the learned counsel for the assessee strenuously argued that, the departmental authorities flouted the direction of the hon'ble rajasthan high court by not supplying the certified copies of various documents, etc., used against the assessee. our attention was drawn towards p. 18 of the w/s, the relevant portion of which reads as under : despite appellant's repetitive requests and binding directions of the hon'ble high court, the learned ao did not issue certified copies of following documents till the date of last hearing : (a) notice/summon dt. 16th march, 2001 under section 131(1a) of the it act, 1961, issued to shri durga prasad ojha by dy. director (inv.)-l, jodhpur (copy given on 20th oct., 2003) (b) reasons recorded under section 131(3), dt. 16th march, 2001 for impounding document by ddit jodhpur (copy given on 20th oct., 2003) (c) approval under proviso to section 131(3). (given on 13th march, 2003) at 4.30 p.m. (d) cbdt instruction no. 1984, dt. 9th june, 2000 (copy given on 20th oct., 2003) (e) letter no. ddit (inv -l)/jodhpur/2000-01/595, dt. 19th march, 2003 (given on 13th oct., 2003) at 4.30 p.m. (g) letters to and reply from various alleged depositors as per order sheet dt. 19th sept., 2003 (never issued) 5. in this way, it was contended by the learned authorised representative, that the ao passed alleged assessment orders in disobedience of the order of the hon'ble high court and the alleged orders are contrary to law and hence, liable to be quashed entirely on this sole ground only. it was stated that the last date of hearing in all the three years was 14th oct., 2003 and the supplying of copies of certain certified documents beyond that date, namely, on 20th oct., 2003 did not serve any purpose as the assessee could not get any opportunity to consult the documents and give his replies thereon. it was asserted that the documents at serial numbers (f) and (g) were never issued despite repeated requests and the order of the hon'ble high court. it was further contended that without the benefit of these documents, the assessee could not have effectively cross-examined the persons, whose statements were recorded and used against the assessee.the learned departmental representative could not controvert these submissions made by the learned authorised representative.6. we have heard the rival submissions and perused the relevant material on record. it is an undisputed fact that during the course of assessment proceedings, the assessee approached the hon'ble high court who, in turn, directed the assessing authority to issue certified copies of all the documents on which he was placing reliance. it was further ordered that the assessment orders shall be passed after giving opportunity to the assessee to cross-examine all the persons whose statements were recorded and relied upon by the assessing authority and was also given opportunity to rebut any document/ material on which the department placed reliance. despite the specific directions of the hon'ble high court, it is found as an uncontroverted position that some of the documents were never supplied to the assessee and some were supplied after the conclusion of hearing on 14th oct., 2003. we are at loss to appreciate the logic in furnishing the documents when the hearing stands concluded disabling the assessee to put up his case effectively. the cross-examination also made, if any, loses its significance when the allegations made against the assessee are not properly made known to him by supplying the copies of the relevant statements intended to be used against him. the ito is a responsible authority of the central government and he is bound to exercise his jurisdiction within the legal limits. when the hon'ble high court has directed to perform a specified duty in a particular manner, it cannot be expected from the ito or anyone else to go beyond that or partly comply with the directions. it is a serious matter and amounts to contempt of court. no person can be deprived of his right, which has been granted in the judicial process. we are painfully leaving this matter at this stage only and are sanguine that such a course would not be repeated in future compelling us to set the things in order judiciously. in view of the foregoing facts, we are satisfied that the assessee was not granted adequate opportunity to make up his case which resulted into the miscarriage of justice and the making of such high pitched assessments. by setting aside the impugned orders, we restore the matter to the file of the ao for framing de novo assessments in all the three years as per law after allowing reasonable opportunity of being heard to the assessee. needless to say, the assessee would be confronted with and supplied the copies of all the material intended to be used against him and reasonable time be provided to make out his case. in such fresh proceedings, the directions given by hon'ble jurisdictional high court should be adhered to in letter and spirit.

Judgment:
1. This batch of six appeals, three by the assessee and the other three by Revenue, emanate from the orders passed by the CIT(A) in 13th, 14th and 15 Sept., 2004 in relation to the asst. yrs. 1992-93 to 1994-95.

Since common issues are raised in these appeals, we are, therefore, proceeding to dispose them by this consolidated order for the sake of convenience.

2. The facts, as gathered from the assessment order, are that one Shri Durga Prasad Ojha, who was chief accountant of the assessee in the year 1994, was in the possession of parchis/loose papers wherein unaccounted income earned by the assessee was mentioned. Later on, his relations with the assessee got strained and he left the job and became the complainant of the assessee, Initially the matter was pursued by the assessee with the D.I. Wing and the parchis were impounded by the then DDIT (Inv.) Jodhpur on 16th March, 2001. Subsequently, incriminating material in the form of handwritten parchis, as referred to above, was transferred to the concerned AO to be taken up in the assessment proceedings vide detailed report No. 595, dt. 19th March, 2001. The then Dy. C1T, Pali, who was the AO, issued notice under Section 148 after recording the detailed reasons and getting the same approved from the CIT. Notice under Section 148, dt. 29th May, 2001 was sent to the assessee through notice server, which was received on the same day by one Shri Mahaveer Singh. In order to ensure proper service of notice, a copy was again sent through Regd. Post No. 184, dt. 29th May, 2001, which was also served. Initially, the assessee did not file any return in response to notices under Section 148. But, eventually on 20th March, 2003, the assessee filed return for all the years in question showing the same amount of income as reflected in the original returns.

However, during the course of assessment proceedings, being carried out in the month of March 2003, the assessee filed writ petition with the Hon'ble Rajasthan High Court on 29th March, 2003 and got further proceedings stayed on the same day. The assessment proceedings were resumed only after stay order was vacated by the Hon'ble High Court, on 1st Sept., 2003, with certain directions as per mutual agreement, which are as under : 1. The petitioner will file preliminary objections within seven days and the assessing authority shall expeditiously decide the same by passing a reasoned order.

2. The assessing authority shall pass the assessment order in accordance with law after giving proper opportunity to the petitioner to cross-examine all the persons whose statements are recorded and .are relied upon by any IT authority and shall also give an opportunity to rebut any document/material on which the Department places reliance.

3. The assessing authority shall issue certified copies of all documents on which he is placing reliance.

4. It will be open for the petitioner to raise all the pleas raised in the writ petition including legality of the notice issued under Section 148 in any subsequent proceedings.

The preliminary objections filed by the assessee on 8th Sept., 2003 were disposed of by way of reasoned orders on preliminary objections.

It is further borne out from the assessment orders that certain copies were supplied to assessee on various dates in terms of above directions and an opportunity to cross-examine all the persons whose statements were relied upon by the IT authorities were provided to the assessee.

on 25th Sept., 2003 and 6th Oct., 2003. Thereafter, a detailed questionnaire dt. 18th Sept., 2003 was served upon the assessee requesting to produce the regular books of account. The assessee stated that he did not possess the books of account as these were burnt. In these circumstances, the AO, while resorting to the provisions of Section 144, framed the assessments for all the years at Rs. 62,20,574 (asst. yr. 1992-93), Rs. 78,51,880 (asst. yr. 1993-94) and Rs. 85,90,840 (asst. yr. 1994-95). The assessee went into appeal in all the three years assailing the assessment orders on several counts.

3. In the first ground, it was contended before the CIT(A) that the AO had not honoured and obeyed the binding direction of Hon'ble jurisdictional High Court as regards the issuance of certified copies, rebuttal of documents relied upon by the Department and complete cross-examination of the persons whose statements were recorded and relied upon by the IT authority. The CIT(A) disposed of all the appeals by allowing some relief in all the years. Both the sides are in appeal against their respective stands.

4. At the outset, the learned Counsel for the assessee strenuously argued that, the Departmental authorities flouted the direction of the Hon'ble Rajasthan High Court by not supplying the certified copies of various documents, etc., used against the assessee. Our attention was drawn towards p. 18 of the w/s, the relevant portion of which reads as under : Despite appellant's repetitive requests and binding directions of the Hon'ble High Court, the learned AO did not issue certified copies of following documents till the date of last hearing : (a) Notice/summon dt. 16th March, 2001 under Section 131(1A) of the IT Act, 1961, issued to Shri Durga Prasad Ojha by Dy. Director (Inv.)-l, Jodhpur (copy given on 20th Oct., 2003) (b) Reasons recorded under Section 131(3), dt. 16th March, 2001 for impounding document by DDIT Jodhpur (copy given on 20th Oct., 2003) (c) Approval under proviso to Section 131(3). (Given on 13th March, 2003) at 4.30 p.m.

(d) CBDT Instruction No. 1984, dt. 9th June, 2000 (Copy given on 20th Oct., 2003) (e) Letter No. DDIT (Inv -l)/Jodhpur/2000-01/595, dt. 19th March, 2003 (Given on 13th Oct., 2003) at 4.30 p.m.

(g) Letters to and reply from various alleged depositors as per order sheet dt. 19th Sept., 2003 (Never issued) 5. In this way, it was contended by the learned Authorised Representative, that the AO passed alleged assessment orders in disobedience of the order of the Hon'ble High Court and the alleged orders are contrary to law and hence, liable to be quashed entirely on this sole ground only. It was stated that the last date of hearing in all the three years was 14th Oct., 2003 and the supplying of copies of certain certified documents beyond that date, namely, on 20th Oct., 2003 did not serve any purpose as the assessee could not get any opportunity to consult the documents and give his replies thereon. It was asserted that the documents at serial numbers (f) and (g) were never issued despite repeated requests and the order of the Hon'ble High Court. It was further contended that without the benefit of these documents, the assessee could not have effectively cross-examined the persons, whose statements were recorded and used against the assessee.

The learned Departmental Representative could not controvert these submissions made by the learned Authorised Representative.

6. We have heard the rival submissions and perused the relevant material on record. It is an undisputed fact that during the course of assessment proceedings, the assessee approached the Hon'ble High Court who, in turn, directed the assessing authority to issue certified copies of all the documents on which he was placing reliance. It was further ordered that the assessment orders shall be passed after giving opportunity to the assessee to cross-examine all the persons whose statements were recorded and relied upon by the assessing authority and was also given opportunity to rebut any document/ material on which the Department placed reliance. Despite the specific directions of the Hon'ble High Court, it is found as an uncontroverted position that some of the documents were never supplied to the assessee and some were supplied after the conclusion of hearing on 14th Oct., 2003. We are at loss to appreciate the logic in furnishing the documents when the hearing stands concluded disabling the assessee to put up his case effectively. The cross-examination also made, if any, loses its significance when the allegations made against the assessee are not properly made known to him by supplying the copies of the relevant statements intended to be used against him. The ITO is a responsible authority of the Central Government and he is bound to exercise his jurisdiction within the legal limits. When the Hon'ble High Court has directed to perform a specified duty in a particular manner, it cannot be expected from the ITO or anyone else to go beyond that or partly comply with the directions. It is a serious matter and amounts to contempt of Court. No person can be deprived of his right, which has been granted in the judicial process. We are painfully leaving this matter at this stage only and are sanguine that such a course would not be repeated in future compelling us to set the things in order judiciously. In view of the foregoing facts, we are satisfied that the assessee was not granted adequate opportunity to make up his case which resulted into the miscarriage of justice and the making of such high pitched assessments. By setting aside the impugned orders, we restore the matter to the file of the AO for framing de novo assessments in all the three years as per law after allowing reasonable opportunity of being heard to the assessee. Needless to say, the assessee would be confronted with and supplied the copies of all the material intended to be used against him and reasonable time be provided to make out his case. In such fresh proceedings, the directions given by Hon'ble jurisdictional High Court should be adhered to in letter and spirit.