Smt. Shreya Mehul Patel, Anand V. The Dy.CIT, Anand Circle, Anand

ITA 1164/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85766 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Bogus Share capital; Salary income; Opportunity of being heard; Principle of natural justice; Additional evidence; Question of law; Reasonable cause; Corroborative evidences; Revised return
• Section: 143(3); 142(1); 139(5); 69; 148

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO. AY APPELLANT RESPONDENT 2892/AHD/2013 2008-09 SMT. SHREYA MEHUL PATEL, 1, ANUPAM BUNGALOW, NR. PATEL PRESS, NANA BAZAR, VV NAGAR, ANAND 388120 PAN : AKAPP 7610 D THE DCIT, ANAND CIRCLE, ANAND 2893/AHD/2013 2009-10 1164/AHD/2014 2007-08 2894/AHD/2013 2007-08 SHRI MEHUL J. PATEL, 1, ANUPAM BUNGALOW, NR. PATEL PRESS, NANA BAZAR, VV NAGAR, ANAND 388120 PAN : ADRPP 6875 A THE DCIT, ANAND CIRCLE, ANAND 2895/AHD/2013 2008-09 2896/AHD/2013 2009-10 ASSESSEE(S) BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI NIMESH YADAV, SR. DR / // / DATE OF HEARING : 10/03/2015 !' /DATE OF PRONOUNCEMENT: 19/03/2015 #$ #$ #$ #$/ // / O R D E R PER ANIL CHATURVEDI, ACCOUNTANT MEMBER: THESE SIX APPEALS FILED BY TWO DIFFERENT ASSESSEE S ARE AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX ( APPEALS)-IV, BARODA FOR ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10. 2. BEFORE US, AT THE OUTSET, THE LD. AUTHORIZED RE PRESENTATIVE SUBMITTED THAT THOUGH THE APPEALS ARE OF DIFFERENT ASSESSEES & DIFFERENT ASSESSMENT YEARS BUT THE FACTS & CIRCUMSTANCES IN ALL THE APPE ALS ARE IDENTICAL EXCEPT FOR THE ASSESSMENT YEARS AND AMOUNT INVOLVED, AND THERE FORE, THE SUBMISSIONS MADE BY HIM IN CASE OF ONE ASSESSMENT YEAR WILL ALS O BE APPLICABLE TO OTHERS, AND THEREFORE, ALL THE APPEALS CAN BE HEARD TOGETHER. THE AFORESAID ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 2 - SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE WER E NOT OBJECTED TO BY THE LD. DEPARTMENTAL REPRESENTATIVE. WE, THEREFORE, PR OCEED TO DISPOSE OF ALL THE APPEALS BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND THUS PROCEED WITH THE FACTS FOR ASSESSMENT YEAR 2007-08 IN THE CASE OF SHRI MEHUL J PATEL IN ITA NO. 2894/AHD/2013. 3. THE BRIEF FACTS OF THE CASE, AS CULLED OUT FROM THE RECORDS FOR ASSESSMENT YEAR 2007-08 IN THE CASE OF SHRI MEHUL J PATEL IN ITA NO.2894/AHD/2013, ARE AS UNDER:- 4. THE ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIV ING INCOME FROM SALARY. IN THIS CASE, THE ASSESSEE ORIGINALLY FILE D RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 22.06.2007 DECLARING TOT AL INCOME AT RS.4,81,200/-. SUBSEQUENTLY, THE REVISED RETURN WA S FILED ON 06.07.2009 DECLARING THE TOTAL INCOME AT RS.4,81,200/- AND AGR ICULTURE INCOME OF RS.9,85,000/-. THE ASSESSING OFFICER HAS NOTED THA T THE REVISED RETURN WAS NOT WITHIN THE STIPULATED TIME U/S 139(5) OF THE AC T AND, THEREFORE, THE REVISED RETURN WAS NOT CONSIDERED. SUBSEQUENTLY, T HE ASSESSMENT WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT AND T HEREAFTER, THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT, VIDE ORDER DATED 30.11.2012 AND THE TOTAL INCOME WAS DETERMINED AT R S.39,15,710/-. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 3 0.09.2013 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAI SED THE FOLLOWING GROUNDS:- ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 3 - 1. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCE FILED IN TERMS OF RULE 46A OF I.T. RULES. 2. THAT IN INTEREST OF JUSTICE, THE ADDITIONAL EVIDENC E BE ADMITTED ALTERNATIVELY IN TERMS OF RULE 29 OF ITAT RULES. 3. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN CONFIRMING THE ADDITION OF RS.18,60,736/- ON ACCOUN T OF UNEXPLAINED BANK DEPOSIT / CREDITS. 4. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN CONFIRMING THE ADDITION OF RS.11,82,360/- MADE ON A CCOUNT OF UNEXPLAINED LIC PREMIUM PAYMENTS U/S 69 OF THE ACT. 5. THAT ALTERNATIVELY, AND WITHOUT PREJUDICE TO ABOVE GROUNDS, THE BENEFIT OF TELESCOPING OF ADDITIONS OF DEPOSITS IN BANK AND PA YMENT OF LIC PREMIUM OUGHT TO HAVE BEEN GRANTED TO APPELLANT. 6. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN HOLDING THAT THE AGRICULTURAL INCOME OF RS.9,85,000 /- DECLARED BY APPELLANT IS NOT SUBSTANTIATED. 7. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS G RIEVOUSLY ERRED IN CONFIRMING THE ESTIMATED ADDITION OF HOUSE HOLD EXP ENSES OF RS.3,00,000/-. 8. THAT, ALTERNATIVE, THE BENEFIT OF TELESCOPING OF AD DITION OF PERQUISITES MADE, OUGHT TO HAVE BEEN GRANTED. 9. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. 5. SINCE ALL THE GROUNDS ARE INTERCONNECTED, THEY A RE CONSIDERED TOGETHER. ON THE BASIS OF THE COPY OF THE BANK STA TEMENT OF AXIS BANK ACCOUNT MAINTAINED BY THE ASSESSEE, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THERE WERE CREDITS/DEPOSITS OF RS.18,60,736/- IN THE ACCOUNT. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. ON THE BASI S OF THE SUBMISSIONS MADE BY THE ASSESSEE, THE ASSESSING OFFICER NOTED T HAT INITIALLY THE ASSESSEE HAD SUBMITTED THAT HE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS, BUT ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 4 - SUBSEQUENTLY, THE ASSESSEE FURNISHED THE CASH BOOK. THE ASSESSING OFFICER WAS, THEREFORE, OF THE VIEW THAT FURNISHING COPY OF CASH BOOK WAS NOTHING BUT THE MANAGED AFFAIRS AND AFTERTHOUGHT. HE ALSO N OTICED THAT IN THE CASH BOOK THERE WAS OPENING BALANCE OF RS.4,67,150/- WHI CH THE ASSESSEE COULD NOT JUSTIFY WITH EVIDENCES AND PREVIOUS YEARS BOOKS OF ACCOUNTS. HE FURTHER NOTED THAT NO SATISFACTORY AND RELEVANT EVIDENCE OR CONFIRMATION WERE FURNISHED WITH RESPECT TO THE CREDITS/DEPOSITS IN T HE BANK ACCOUNT AND NO CASH FLOW OR FUND FLOW STATEMENT WAS FURNISHED TO E STABLISH THE AVAILABILITY OF CASH. WITH RESPECT TO THE SUBMISSION THAT THE I NCOME BEING AGRICULTURE INCOME, HE NOTICED THAT THE ASSESSEE DID NOT FURNIS H COPIES OF THE SALES BILLS OF THE AGRICULTURE PRODUCT, BILLS FOR PURCHASE OF A GRICULTURE SEEDS, FERTILIZERS, ETC., AND FURTHER FROM THE COPIES OF 7/12 UTTARAS, HE NOTICED THAT THE SIZE OF THE LAND TO BE SMALL AND THE ASSESSEE TO BE ONE OF THE JOINT OWNERS. HE, THEREFORE, CONCLUDED THAT THE ASSESSEE HAS FAILED T O PROVE THE AGRICULTURE INCOME AND THE OTHER DEPOSITS IN THE BANK. HE, THE REFORE, CONSIDERED THE AGGREGATE CREDIT OF RS.18,60,736/- AS UNEXPLAINED I NCOME AND ADDED U/S 69 OF THE ACT. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAD MADE INSURANCE PREMIUM PAYMENTS OF LIC OF RS.11,82,360/- , THE DETAILS OF WHICH ARE LISTED AT PAGE NOS. 3 & 4 OF THE ASSESSMENT ORD ER. CONSIDERING THE FACT THAT THE ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE OF DEPOSITS, HE CONSIDERED THE AGGREGATE INSURANCE PREMIUM PAYMENTS OF RS.11,82,360/- AS UNEXPLAINED AND ADDED TO THE INCOME. THE ASSESSEE W AS ALSO ASKED TO FURNISH THE DETAILS OF HOUSEHOLD EXPENDITURE WITH S UPPORTING EVIDENCES FOR WITHDRAWAL TO WHICH THE ASSESSEE INTER ALIA SUBMITTED THAT HIS FAMILY CONSISTED OF FIVE MEMBERS AND EXPENSES WERE APPROXI MATELY RS.20,000/- TO RS.30,000/- PER MONTH. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS OF HOUSEHOLD EXPENSES WITH SUPPORTING EVIDENCE. HE, THEREFORE, ESTIMATED THE ASSESSEES ANNUAL HOUSEHOLD ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 5 - EXPENSES TO BE AT RS.3,00,000/- AND ADDED THE SAME TO THE INCOME. AGGRIEVED BY THE AFORESAID ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE O RDER DATED 30.09.2013, WITH RESPECT TO THE ADDITION OF UNEXPLAINED CREDITS , UPHELD THE ORDER OF THE ASSESSING OFFICER BY RELYING ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF FAIRDEAL FILAMENTS LTD, 302 IT R 173 (GUJ.), AS UNDER:- 5.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSION MADE BY THE AR OF THE APPELLANT. THE AO HAS MENTIONED IN HIS ORDER THAT VIDE PARA 3 OF THE NOTICE U/S 142(1) OF THE IT ACT DATED 24.08.2012 AN D VIDE ORDER NOTINGS SHEET DATED 08.10.2012 AND 07.11.2012, THE APPELLAN T WAS ASKED TO EXPLAIN THE CREDITS/DEPOSITS IN THE BANK ACCOUNT WITH RELEV ANT EVIDENCES. IN RESPONSE TO THIS, THE APPELLANT HAD FILED A COPY OF THE CASH BOOK. REGARDING DEPOSITS IN THE BANK, NO SATISFACTORY AND RELEVANT EVIDENCE OR CONFIRMATION WAS FURNISHED EXCEPT SALARY. THUS, THE APPELLANT HAD BE EN GIVEN SUFFICIENT OPPORTUNITIES BY THE AO TO EXPLAIN THE SOURCES OF D EPOSITS MADE IN THE BANK ACCOUNT, BUT THE APPELLANT FAILED TO PROVIDE SUCH D ETAILS/EXPLANATIONS TO THE AO DURING THE ASSESSMENT PROCEEDINGS. OWING TO TH IS, THE AO HAS MADE THE ADDITIONS OF THE CREDITORS FOR WHICH NO DETAILS WERE FURNISHED AS MENTIONED IN THE ASSESSMENT ORDER. DURING THE APPEL LATE PROCEEDINGS, THE APPELLANT HAS SUBMITTED DETAILS AND EXPLANATIONS WH ICH ARE ADDITIONAL EVIDENCES IN NATURE. SUCH DETAILS ARE ALSO NOT BACK ED BY ANY SUPPORTING EVIDENCE. BESIDES, NO EXPLANATION HAS BEEN FILED AS TO WHY THESE DETAILS/EXPLANATIONS WERE NOT FURNISHED BEFORE THE AO DESPITE BEING GRANTED SEVERAL OPPORTUNITY OF BEING HEARD. IN FACT, NO APP LICATION FOR ADMISSION OF ADDITIONAL EVIDENCES HAS BEEN FILED. UNDER SUCH C IRCUMSTANCES, SUCH ADDITIONAL EVIDENCES ARE NOT ADMISSIBLE. 5.3.1. FOR THIS PURPOSE, RELIANCE IS PLACED UPON TH E DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF FAIRDEAL FILAMENT S LTD, 302 ITR 173 (GUJ.). IN THIS CASE THE ASSESSING OFFICE R MADE AN ADDITION ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL TO THE TUNE OF RS.18,40,200, DISALLOWED THE CONSULTATION FEES OF RS. 75,000, AND DISALLOWED THE CLAIM UNDER SECTION 80-1 OF THE ACT. THE ASSESSEE CARRIED T HE MATTER IN APPEAL BEFORE THE COMMISSIONER (APPEALS) WHO PARTLY ALLOWED THE A PPEAL ON ONE ANOTHER GROUND BUT CONFIRMED THE ASSESSMENT ORDER IN RELATI ON TO THE AFORESAID THREE ITEMS BY REFUSING TO ADMIT ADDITIONAL EVIDENCE BY S TATING THAT ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 6 - 5. I HAVE GONE THROUGH THE CASE-RECORDS AND FIND T HAT THE ASSESSING OFFICER HAS GIVEN MORE THAN ADEQUATE OPPORTUNITY TO THE APPELLANT TO FURNISH THE INFORMATION REGARDING THE NAMES AND ADD RESSES OF THE SHAREHOLDERS BUT THE APPELLANT HAS FAILED TO FILE T HE SAME BEFORE HIM. THE FIRST NOTICE CALLING FOR THIS INFORMATION IS FO UND TO HAVE BEEN ISSUED BY THE ASSESSING OFFICER ON MARCH 2, 1993, A ND ANOTHER NOTICE CALLING FOR THE SAME INFORMATION WAS ISSUED ON MARC H 19, 1993, BUT THE APPELLANT CARED NOT TO COMPLY WITH THESE NOTICE S. THEREFORE, WHATEVER BE THE MERITS OF THE APPELLANT'S CASE, I A M OF THE VIEW THAT ITS CASE IS NOT COVERED BY RULE 46A OF THE INCOME-T AX RULES. ACCORDINGLY, THIS GROUND OF APPEAL IS REJECTED.' 5.3.2. THE ASSESSEE CARRIED THE MATTER IN SECOND AP PEAL BEFORE THE TRIBUNAL. THE ASSESSEE PLEADED THAT SUFFICIENT OPPORTUNITY WA S NOT GIVEN TO IT AND HENCE THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED. I T WAS FURTHER PLEADED THAT THE TRIBUNAL SHOULD PERMIT ADDUCING OF ADDITIONAL E VIDENCE IN EXERCISE OF POWERS UNDER RULE 29 OF THE INCOME-TAX (APPELLATE T RIBUNAL) RULES, 1963 ('THE ITAT RULES'). THE TRIBUNAL REJECTED THE CONTE NTION RAISED ON BEHALF OF THE ASSESSEE IN THE FOLLOWING TERMS: '6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE FACTS ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER REVEAL S THAT THE ASSESSING OFFICER GAVE ADEQUATE OPPORTUNITY FROM TI ME TO TIME AND ASKED THE ASSESSEE TO FURNISH THE DETAILS/EVIDENCE IN RESPECT OF THE SHARE CAPITAL AS ALSO THE NAMES, ADDRESSES AND SHAR EHOLDINGS OF THE HOLDERS BUT THE ASSESSEE TOOK IT VERY LIGHTLY AND M ADE NO COMPLIANCE. THE ASSESSEE THUS SHOWED NO RESPECT FOR LAW. IT IS AN ADMITTED FACT THAT THE EVIDENCE IN RESPECT OF THE SHARE CAPITAL A S DETAILED SUPRA WAS FURNISHED FOR THE FIRST TIME BEFORE THE COMMISSIONE R OF INCOME-TAX (APPEALS) VIDE LETTER DATED DECEMBER 28, 1993 (PAGE 28 OF THE PAPER BOOK). WE HAVE GONE THROUGH THIS LETTER AND FIND TH AT THE ASSESSEE SUBMITTED 'A DETAILED CHART IS ENCLOSED TO SHOW WHA T HAPPENED ON VARIOUS DATES AND THE ASSESSEE REMAINED UNDER THE I MPRESSION THAT SINCE IT WAS NOT A TIME-BARRING ASSESSMENT, THE ASS ESSMENT WOULD NOT BE FINALISED'. THIS SHOWS THAT THE ASSESSEE TOOK TH E WHOLE THING VERY LIGHTLY AND RATHER DICTATED TO THE ASSESSING OFFICE R TO TAKE UP ASSESSMENT PROCEEDINGS AT THEIR CONVENIENCE AS IT W AS NOT GETTING TIME-BARRED. THE FACT OF THE MATTER IS THAT THE ASS ESSING OFFICER GAVE A NUMBER OF OPPORTUNITIES TO THE ASSESSEE AND THE A SSESSEE NOT ONLY NOT AVAILED OF THESE OPPORTUNITIES BUT SHOWED GREAT DISRESPECT TO THE PROCESS OF LAW. UNDER THE CIRCUMSTANCES, THE COMMIS SIONER OF INCOME-TAX (APPEALS) WAS JUSTIFIED IN NOT ADMITTING THE EVIDENCE FURNISHED BEFORE HIM FOR THE FIRST TIME WHEN IT WAS NOT FURNISHED ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 7 - BEFORE THE ASSESSING OFFICER, WITHOUT ANY REASONABL E CAUSE. BEFORE US A PLEA HAS BEEN RAISED THAT THIS EVIDENCE SHOULD BE ADMITTED UNDER RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULE S. THERE IS NO DOUBT THAT RULE 29 ENABLES THE TRIBUNAL TO ADMIT AD DITIONAL EVIDENCE IN CERTAIN CASES AND UNDER CERTAIN CIRCUMSTANCES BU T THE BENEDICTION OF RULE 29 CANNOT BE BESTOWED UPON ANY PARTY WHO IS NEGLIGENT, NON- COOPERATIVE AND RECALCITRANT; NOR SHOULD THE TRIBUN AL GIVE ANOTHER CHANCE OR OPPORTUNITY TO ANY PARTY TO COVER UP LACU NAE, LACHES AND LAPSES. TAKING INTO CONSIDERATION THE FACTS AND CIR CUMSTANCES OF THE CASE WE DO NOT CONSIDER THE CASE OF THE ASSESSEE AS FIT FOR INVOKING RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES.' 5.3.3. ON FURTHER APPEAL TO HON'BLE GUJARAT HIGH CO URT, THE COURT HELD AS FOLLOWS: 'THE FACTS NARRATED HEREINBEFORE GO TO SHOW THAT BE FORE THE TRIBUNAL THE LIMITED QUESTION THAT WAS RAISED WAS WHETHER TH E COMMISSIONER (APPEALS) HAD RIGHTLY TURNED DOWN THE REQUEST MADE BY THE ASSESSEE FOR PRODUCTION OF ADDITIONAL EVIDENCE. ALTERNATIVEL Y, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT THE TRIBUNAL MAY EXE RCISE DISCRETION VESTED IN THE TRIBUNAL VIDE RULE 29 OF THE INCOME-T AX (APPELLATE TRIBUNAL) RULES AND ADMIT ADDITIONAL EVIDENCE. THE TRIBUNAL HAS COME TO THE CONCLUSION THAT THERE WAS NO INFIRMITY IN THE ORDER OF THE COMMISSIONER (APPEALS) REJECTING THE PLEA OF THE AS SESSEE FOR PRODUCTION OF ADDITIONAL EVIDENCE BECAUSE, ACCORDIN G TO THE TRIBUNAL, THE COMMISSIONER (APPEALS) HAD RIGHTLY COME TO THE CONCLUSION THAT SUFFICIENT OPPORTUNITIES HAD BEEN GRANTED TO THE AS SESSEE BY THE . ASSESSING OFFICER. IN FACT THE FINDING OF THE TRIBU NAL ON THIS GROUND IS THAT THE ASSESSEE TOOK THE ENTIRE MATTER VERY LI GHTLY AND ASKED THE ASSESSING OFFICER TO TAKE UP THE ASSESSMENT PROCEED INGS AT THE } CONVENIENCE OF THE ASSESSEE (OR MAY BE THE CHARTERE D ACCOUNTANT OF THE ASSESSEE) AS PLEADED, BECAUSE THE ASSESSMENT WAS NO T GETTING TIME- BARRED. IF BOTH THE APPELLATE AUTHORITIES HAVE CONC URRENTLY COME TO THE CONCLUSION THAT SUFFICIENT OPPORTUNITIES WERE GRANT ED TO THE ASSESSEE IT IS NOT POSSIBLE TO GO BEHIND THE SAID FINDINGS W HICH ARE PRIMARILY BASED ON APPRECIATION OF EVIDENCE ON RECORD. SIMILARLY, SO FAR AS ADMITTING ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES IS CONCERNED THE TRIBUNAL HAS COME TO THE CONCLUSION THAT THE BENEFIT UNDER THE S AID RULE IS NOT AVAILABLE TO A PERSON WHO IS NEGLIGENT, NON-CO-OPER ATIVE AND RECALCITRANT; AND THE TRIBUNAL IS NOT REQUIRED TO G IVE ANOTHER CHANCE OR OPPORTUNITY TO A PERSON TO COVER UP ITS OWN LAPS ES. EVEN ON THIS ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 8 - GROUND IT IS NOT POSSIBLE TO HOLD THAT THE TRIBUNAL HAS COMMITTED ANY ERROR IN LAW SO AS TO CALL FOR INTERVENTION. THE PO SITION IN LAW AS REGARDS ADMISSION OF ADDITIONAL EVIDENCE, BOTH IN R ELATION TO RULE 46A OF THE INCOME-TAX RULES AND RULE 29 OF THE INCOME-T AX (APPELLATE TRIBUNAL) RULES IS SIMILAR. NO PERSON IS ENTITLED T O SEEK ADMISSION OF ADDITIONAL EVIDENCE AS A MATTER OF RIGHT. IN FACT O PENING PORTIONS OF BOTH THE RULES ARE COUCHED IN NEGATIVE TERMINOLOGY AND PLACE AN EMBARGO ON A PERSON FROM SEEKING ADMISSION OF THE A DDITIONAL EVIDENCE. THE ONLY EXCEPTION BEING, FULFILMENT OF T HE STIPULATED CONDITIONS. THEREFORE, THE APPELLATE AUTHORITIES AR E VESTED WITH A DISCRETION WHETHER TO ADMIT OR TO REJECT AN APPLICA TION FOR PRODUCTION OF ADDITIONAL EVIDENCE AND FOR THIS PURPOSE THE ONL Y TEST WHICH IS RELEVANT IS WHETHER DISCRETION HAS BEEN VALIDLY EXE RCISED IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN OTHER WORDS, IS S UPPORTED BY REASONS AND IS NOT CAPRICIOUS OR ARBITRARY IN ANY MANNER. A PPLYING THE AFORESAID TEST TO THE FACTS OF THE CASE IT BECOMES APPARENT THAT THE TRIBUNAL HAS APPROACHED THE MATTER CORRECTLY AND ON CE THE TRIBUNAL HAS EXERCISED DISCRETION LEGALLY IN ACCORDANCE WITH LAW IT IS NOT POSSIBLE TO COME TO THE CONCLUSION THAT IN THE FACT S AND CIRCUMSTANCES OF THE CASE, SUCH EXERCISE OF DISCRETION IS EITHER COLOURED BY IRRELEVANT CONSIDERATIONS OR IS CAPRICIOUS OR ARBITRARY. IN SO FAR AS RULE 29 OF THE INCOME-TAX (APPELLATE T RIBUNAL) RULES IS CONCERNED IN THE CASE OF PARI MANGALDAS GIRDHARDAS [1977] CTR (GUJ) 647 THIS HIGH COURT, AFTER SETTING OUT THE TE XT OF THE RULE, HAS STATED AS UNDER (PAGE 667) : 'THE PROVISIONS OF THE SAID RULE MAKE IT CLEAR THAT THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL. HOWEVER, IN THR EE CLASSES OF CASES IT PERMITS PRODUCTION OF ADDITIONAL EVIDENCE : (1) WHEN THE TRIBUNAL REQUIRES ANY DOCUMENTS TO BE PRODUCED OR A NY WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS ; (2) WHEN THE TRIBUNAL REQUIRES ANY DOCUMENTS TO BE PROD UCED OR ANY WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED FOR ANY OTHER SUBSTANTIAL CAUSE ; OR (3) WHEN THE INCOME-TAX AUTH ORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY TH EM OR NOT SPECIFIED BY THEM. THE SAID RULE PROVIDES THAT IN ANY OF THOS E THREE CASES, FOR REASONS TO BE RECORDED, THE TRIBUNAL MAY ALLOW THE PRODUCTION OF ADDITIONAL EVIDENCE. WE ARE NOT CONCERNED IN THE PR ESENT CASE WITH A CASE FALLING IN THE THIRD CATEGORY AND WE NEED TO S AY NO MORE ABOUT IT. SINCE THE PROVISIONS OF THE SAID RULE ARE IN PAN MA TERIA WITH THE ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 9 - PROVISIONS OF ORDER 41, RULE 27 OF THE CODE OF CIVI L PROCEDURE, WE MAY REFER TO SOME OF THE DECIDED CASES RELATING TO ORDER 41, RULE 27(L)(B) CPC IN ORDER TO APPRECIATE THE NATURE AND AMBIT OF THE POWER CONFERRED UNDER RULE 29 UPON THE TRIBUNAL IN SO FAR AS THE FIRST TWO CATEGORIES OF CASES ARE CONCERNED.' IN SO FAR AS THE SAID DECISION IS CONCERNED THE COU RT WAS NOT CALLED UPON TO CONSIDER WHETHER THE CASE FELL WITHIN THE T HIRD CATEGORY OF EXCEPTION, VIZ., WHEN THE INCOME-TAX AUTHORITIES HA VE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESS EE TO ADDUCE EVIDENCE. THEREFORE, THE RATIO LAID DOWN IN THE SAI D DECISION IS CONFINED TO THE FIRST TWO CATEGORIES OF EXCEPTIONS AS STATED BY THE HIGH COURT. THOUGH THE LEARNED ADVOCATE FOR THE APPLICAN T-ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE WAS ALSO GO VERNED BY THE FIRST TWO EXCEPTIONS WHEN ONE READS SUBMISSIONS MADE BEFO RE THE TRIBUNAL AND TAKING INTO CONSIDERATION THE CONTENTIONS RAISE D BEFORE THIS COURT IT IS NOT POSSIBLE TO ACCEPT THE SAID SUBMISSION. I N FACT THE ASSESSEE'S CASE ALL ALONG HAS BEEN THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE TO BRING ON RECORD MATERIAL TO SHOW TH AT NO ADDITION/DISALLOWANCE WAS WARRANTED; THAT DESPITE T HE ASSESSEE HAVING ASKED FOR ADJOURNMENT, THE ASSESSING OFFICER PROCEE DED TO COMPLETE THE ASSESSMENT WITHOUT DEALING WITH THE ADJOURNMENT APPLICATION. IN THIS REGARD SUFFICE IT TO STATE THAT BOTH THE APPEL LATE AUTHORITIES HAVE RECORDED THAT SUFFICIENT OPPORTUNITIES WERE GRANTED TO THE ASSESSEE. WHETHER SUFFICIENT OPPORTUNITIES WERE GRANTED OR NO T IS BASICALLY A QUESTION OF FACT AND THE HIGH COURT CANNOT GO BEHIN D THE FINDING OF FACT RECORDED BY THE TRIBUNAL. IN THE EVENT, ACCORD ING TO THE ASSESSEE, THE FINDING WAS EITHER NOT SUPPORTED BY EVIDENCE ON RECORD OR WAS CONTRARY TO THE EVIDENCE ON RECORD, IT WAS FOR THE ASSESSEE TO RAISE A SPECIFIC QUESTION IN THIS REGARD, AS TO WHETHER THE FINDING OF THE TRIBUNAL IS SUPPORTED BY ANY MATERIAL OR ANY EVIDEN CE ON RECORD. IN THE ABSENCE OF SUCH A QUESTION THE COURT CANNOT, IN THE GUISE OF REFERRING TO MATERIAL ON RECORD, IGNORE THE FINDING OF FACT RECORDED BY THE TRIBUNAL IN EXERCISE OF REFERENCE JURISDICTION. LETTER DATED MARCH 28, 1983, ON WHICH RELIANCE IS PLACED ON BEHALF OF THE ASSESSEE IS NOWHERE REFERRED TO IN THE ORDER OF THE TRIBUNAL AN D THE COURT CANNOT GO INTO THE SAME AS THE SAID LETTER HAS ALSO NOT BE EN ANNEXED TO THE STATEMENT OF THE CASE. IN THE AFORESAID FACT SITUATION, THE DECISIONS CITE D ON BEHALF OF THE ASSES-SEE CANNOT CARRY THE CASE OF THE ASSESSEE ANY FURTHER, BECAUSE ADMITTEDLY IN THE SAID DECISIONS THE COURTS HAVE FO UND THAT THERE WAS MATERIAL AVAILABLE ON RECORD WHICH WAS REFERRED TO EITHER BY THE ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 10 - COMMISSIONER (APPEALS) OR THE TRIBUNAL BUT HAD NOT FORMED PART OF THE STATEMENT OF CASE. IN THE PRESENT CASE THAT IS NOT THE SITUATION. HENCE, IN THE ABSENCE OF ANY INFIRMITY IN THE EXERC ISE OF DISCRETION BY THE TRIBUNAL ALL THE THREE QUESTIONS REFERRED FOR T HE OPINION OF THE HIGH COURT ARE ANSWERED IN THE NEGATIVE, (AFFIRMATI VE?) I.E., IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. 5.3.4. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACT OF THE ABOVE MENTIONED DECISION IN THE CASE OF FAIRDEAL FILAMENT S LTD. ACCORDINGLY, THE ADDITIONAL EVIDENCES AND EXPLANATION SUBMITTED BY T HE APPELLANT ARE NOT ADMITTED AND THE ADDITIONS MADE BY THE AO ARE UPHEL D. ACCORDINGLY THIS, GROUND OF APPEAL IS DISMISSED. 6. WITH RESPECT TO THE ADDITION ON ACCOUNT OF AGRIC ULTURE INCOME AND LIC PREMIUM PAYMENTS, THE ACTION OF THE ASSESSING O FFICER WAS CONFIRMED BY THE LD. CIT(A) BY HOLDING AS UNDER:- 6.3.2 THE APPELLANT HAS NOT FURNISHED ANY OF THE D ETAILS ASKED FOR BY THE AO EXCEPT FOR SUBMITTING A COPY OF 7/12 UTTARAS FOR HAVING LAND IN SURVEY NO.950/2 AND 951 ETC. THE AO HAS STATED THAT THESE LANDS WERE VERY SMALL AND THERE WERE LOTS OF JOINT OWNERS IN THE LANDS. MOREOVER, NOWHERE IN THE UTTARAS, THE APPELLANTS N AME APPEARS AS AGRICULTURIST. BESIDES THIS, NO OTHER DETAILS ASKED BY THE AO LIKE AGRICULTURAL EXPENSES, SALE BILLS OF AGRICULTURAL P RODUCTS AND OTHER DETAILS WERE SUBMITTED BY THE APPELLANT. DURING THE COURSE OF APPELLATE PROCEEDINGS ALSO, THE APPELLANT HAS FAILE D TO SUBMIT THESE DETAILS. HENCE, THE ACTION OF THE AO OF TREATING TH E AGRICULTURAL INCOME AS NOT GENUINE IS CORRECT. 6.3.3 SO FAR AS INVESTMENTS IN LIC POLICIES ARE CON CERNED, THE APPELLANT HAD FILED A CASH BOOK BEFORE THE AO WHICH HE WAS UNABLE TO SUBSTANTIATE WITH SUPPORTING EVIDENCES. NO EVIDENCE S REGARDING OPENING BALANCE COULD BE FURNISHED EITHER DURING TH E ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS. IN FACT THE APPELLANT HAS NOT SUBMITTED ANY COPY OF THIS ALLEGED CASH BOO K DURING THE APPELLATE PROCEEDINGS. BESIDES, AS ALREADY DISCUSSE D, THE AGRICULTURAL INCOME CLAIMED BY THE APPELLANT AND WHICH WAS RELIE D UPON BY HIM TO EXPLAIN THE INVESTMENTS MADE IN LIC POLICIES COULD NOT BE SUBSTANTIATED. HENCE, THE APPELLANT HAS FAILED TO P ROVE THE SOURCES OF THE INVESTMENT MADE IN LIC POLICIES AND ACCORDINGLY , THE AOS ACTION ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 11 - OF TAXING THE INVESTMENT MADE IN LIC POLICIES AS UN EXPLAINED INVESTMENTS AS PER SECTION 69 OF THE IT ACT IS CORR ECT AND IS ACCORDINGLY, UPHELD. 7. WITH RESPECT TO THE ADDITION ON ACCOUNT OF HOUSE HOLD EXPENSES, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OF FICER BY HOLDING AS UNDER:- 8.3.1 IN RESPONSE TO THIS, THE APPELLANT HAD ONLY MENTIONED THE INCOME EARNED BY HIM IN DIFFERENT ASSESSMENT YEARS VIDE HI S REPLY DATED 08.10.2012. BESIDES, HE HAD SUBMITTED THAT HE IS RESIDING WITH HIS FATHER, HIS WIFE AND 2 CHILDREN. FURTHER, SUBMISSION WAS THAT THE APPELLAN TS FAMILY IS A MIDDLE CLASS FAMILY AND EXPENSES ARE VERY NORMAL. THUS, TH E APPELLANT HAD FAILED TO PROVIDE THE DETAILS AS ASKED FOR BY THE AO DURING T HE COURSE OF ASSESSMENT PROCEEDINGS REGARDING HOUSEHOLD EXPENSES. DURING TH E APPELLATE PROCEEDINGS ALSO NO SUCH DETAILS HAS BEEN FURNISHED EXCEPT MAKI NG A SUBMISSION THAT ONUS WAS ON THE AO TO BRING ON RECORD SUFFICIENT MA TERIAL TO PROVE THAT EXPENSES ESTIMATED BY HIM ARE REASONABLE. THIS IS A LSO TO MENTION HERE THAT THE APPELLANT HAS NOT GIVEN THE DETAILS OF DRAWINGS MADE BY HIM FOR SUCH PURPOSES. HE HAS ONLY PROVIDED HIS LEDGER IN THE BO OKS OF ANUPAM INDUSTRIES TO SHOW SOME INDIRECT EXPENSES MADE ON H IS BEHALF. THE AO HAS ALREADY TAKEN INTO ACCOUNT THIS LEDGER. I HAVE ALSO GONE THROUGH THIS LEDGER COPY IN WHICH NO PERSONAL EXPENSES COULD BE DETECTE D. WHEN THE APPELLANT HAD NOT FURNISHED ANY DETAILS OF THE HOUSEHOLD EXPE NDITURE, THE DRAWINGS MADE BY HIM FOR THIS PURPOSE AND THE CONTRIBUTION M ADE BY OTHER FAMILY MEMBERS OUT OF THEIR DRAWINGS FOR THIS PURPOSE, THE N THE ESTIMATE MADE BY THE AO CANNOT BE HELD TO BE INCORRECT. MOREOVER, ON CE THE AO HAD ESTIMATED SUCH HOUSEHOLD EXPENDITURE AT RS.3 LACS PER ANNUM I N THE ASSESSMENT ORDER, ONUS WAS ON THE APPELLANT TO ESTABLISH WITH CONCRET E DETAILS AND SUPPORTING EVIDENCES THAT THE ESTIMATION MADE BY THE AO IS NOT CORRECT. THE APPELLANT HAS BADLY FAILED IN HIS DUTY IN THIS REGARD. DURING THE APPELLATE PROCEEDINGS ALSO NO SUCH DETAILS HAVE BEEN FURNISHED NEITHER AN Y EFFORT HAD BEEN MADE TO DISPROVE THE EXPENDITURE ESTIMATED BY THE AO EXCEPT FOR RELYING UPON SOME LEGAL PRONOUNCEMENTS. THE ESTIMATION OF HOUSEHOLD E XPENSES IS A QUESTION OF FACT AND A QUESTION OF LAW COMES TO PAY IN THIS REG ARD ONLY WHEN THE ASSESSEE FURNISHES THE DETAILS OF HOUSEHOLD EXPENSES AND THE SOURCES THEREOF AND THEN THE AO THIS DISREGARDS SUCH DETAILS AND MAKES THE E STIMATION WITHOUT ANY BASIS. HENCE, THE APPELLANTS CONTENTIONS ARE NOT A CCEPTABLE. THE ESTIMATION MADE BY THE AO FOR A FAMILY OF 6 PERSONS WHO EVIDEN TLY BELONG TO THE UPPER CLASS OF THE SOCIETY AS CAN BE SEEN FROM THE INCOME S EARNED BY THEM IN THIS ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 12 - YEAR AS WELL AS IN PREVIOUS YEARS, IS QUITE REASONA BLE AND IS ACCORDINGLY UPHELD. 8. AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT( A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 9. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE SUB MITTED THAT THE ASSESSEE HAD FILED ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A), BUT THE SAME WERE NOT ADMITTED BY LD. CIT(A) FOR THE REASONS STA TED IN HIS ORDER. THE LD. AUTHORIZED REPRESENTATIVE POINTED TO THE WRITTEN SU BMISSIONS MADE BEFORE THE LD. CIT(A) AND POINTED TO THE COPY OF SUBMISSIO NS WHICH WERE PLACED AT PAGE NOS. 39 AND 40 OF THE PAPER-BOOK. FROM THE CHA RT, HE POINTED OUT THAT THE ASSESSEE HAD SUBMITTED VARIOUS EVIDENCES AND SU PPORTING WHICH HAVE BEEN IGNORED BY THE LD. CIT(A). HE, THEREFORE, SUBM ITTED THAT THE MATTER MAY BE REMITTED BACK TO LD. CIT(A) FOR CONSIDERATIO N OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. CIT(A). WITH R ESPECT TO THE RELIANCE PLACED BY LD. CIT(A) ON DENYING THE ADMISSION OF AD DITIONAL EVIDENCE, HE SUBMITTED THAT THE RATIO OF AFORESAID DECISION ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTA TIVE, ON THE OTHER HAND, SUBMITTED THAT THE DETAILS WERE NOT SUBMITTED BEFOR E THE ASSESSING OFFICER THOUGH SUFFICIENT OPPORTUNITY WAS GRANTED TO THE AS SESSEE. HE, THEREFORE, SUBMITTED THAT IN THE ABSENCE OF THE DETAILS, THE A SSESSING OFFICER WAS FULLY JUSTIFIED IN MAKING THE ADDITIONS. HE, THUS, SUPPO RTED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN THE BANK A CCOUNT, LIC PREMIUM PAYMENTS, HOUSEHOLD EXPENSES AND AGRICULTURE INCOME . WE FIND THAT THE ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 13 - ASSESSEE SUBMITTED THE DETAILS BEFORE THE LD. CIT(A ) WHICH IS ALSO PLACED ON RECORD AT PAGE NOS. 39 AND 40 OF THE PAPER-BOOK. FR OM THE DETAILS, IT IS SEEN THAT THE ASSESSEE HAS FURNISHED EXPLANATION AND ALS O THE RELEVANT PAGE NUMBERS OF THE EVIDENCES IN SUPPORT OF HIS EXPLANAT ION. WE FIND THAT THE AFORESAID SUBMISSIONS WERE NOT CONSIDERED BY LD. CI T(A) AND IT WAS CONSIDERED AS ADDITIONAL EVIDENCES TO BE NOT ADMISS IBLE. HERE WE FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V S. SCIENTIFIC CHEMICALS, (2005) 278 ITR 199 (GUJ.), AFTER APPLYING THE RATIO OF DECISION OF HONBLE APEX COURT IN THE CASE OF TIN BOX CO. VS. CIT, (200 1) 249 ITR 216 (SC) AT PARA 10 AND 11 HAS NOTED AS UNDER:- AS HELD BY THE APEX COURT IN THE CASE OF TIN BOX C O. [2001] 249 ITR 216 ONCE THE TRIBUNAL FOUND THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD, WHETHER THE ASSESSEE COULD HAVE PLACED THE EVIDENCE BEFORE THE APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL, WAS REALLY OF NO CONSEQUENCE FOR IT WAS THE ASSESSMENT ORDER THAT, COUNTED: THAT ORDER HAD TO BE MADE AFTER THE ASSESSEE HAD BEEN GI VEN A REASONABLE OPPORTUNITY OF BEING HEARD. PRINCIPLES OF NATURAL J USTICE TAKE WITHIN THEIR SWEEP NOT ONLY THE RIGHT OF REASONABLE OPPORTUNITY, BUT ALSO THE RIGHT OF BEING HEARD. THE RIGHT OF BEING HEARD WOULD ENCOMPA SS THE FACTUM OF THE EXPLANATION TENDERED BEING CONSIDERED BEFORE THE AS SESSING AUTHORITY DECIDES TO PASS AN ORDER. SECTION 271(1)(A) OF THE ACT GRAN TS DISCRETION TO THE INCOME-TAX OFFICER TO LEVY OR NOT TO LEVY PENALTY. THIS IS CLEAR FROM THE PHRASE, 'HE MAY DIRECT THAT SUCH PERSON SHALL PAY B Y WAY OF PENALTY' NAMELY, THE INCOME-TAX OFFICER MAY DIRECT OR MAY NO T DIRECT LEVY OF PENALTY CONSIDERING THE FACT THAT HE IS REQUIRED TO BE SATI SFIED WHETHER ANY PERSON HAS COMMITTED THE STIPULATED DEFAULT WITHOUT REASONABLE CAUSE. SUCH A SATISFACTION CAN BE RECORDED ONLY IF PROPER AND ADE QUATE OPPORTUNITY IS ACCORDED TO THE ASSESSEE. THEREFORE, BEFORE THE AUT HORITY CAN EXERCISE DISCRETION VESTED IN IT, IT IS IMPERATIVE FOR THE A UTHORITY TO GRANT REASONABLE OPPORTUNITY AND THIS WOULD TAKE WITHIN ITS FOLD THE RIGHT OF BEING HEARD AND THE EXPLANATION TENDERED AS TO THE EXISTENCE OF REA SONABLE CAUSE BEING TAKEN INTO CONSIDERATION BEFORE THE ORDER TO LEVY PENALTY IS MADE. THE LEGAL POSITION IN THIS REGARD IS WELL SETTLED AND BEARS NO REPETIT ION. THE AUTHORITY VESTED WITH DISCRETION BY A STATUTORY PROVISION IS UNDER A MANDATE TO EXERCISE SUCH DISCRETION IN A JUDICIAL MANNER AND NOT ARBITRARILY . WHEN THE EXPLANATION TENDERED BY THE ASSESSEE IS IGNORED OR OMITTED FROM THE ZONE OF CONSIDERATION ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 14 - BEFORE THE ORDER IS MADE, IT WOULD DEFINITELY VIOLA TE THE PRINCIPLES OF NATURAL JUSTICE. THE ORDER WOULD BE VITIATED BY EXERCISE OF ARBITRARINESS IN THE DECISION-MAKING PROCESS AND THE DISCRETION CANNOT B E STATED TO HAVE BEEN EXERCISED JUDICIALLY. THERE IS ONE MORE ASPECT OF THE MATTER. WHEN AN AUT HORITY IS VESTED WITH DISCRETIONARY POWERS AND OMITS TO TAKE INTO CONSIDE RATION THE EXPLANATION TENDERED, WHICH HAS ADMITTEDLY BEEN FILED IN RESPON SE TO THE SHOW-CAUSE NOTICE, THE ORDER WOULD SUFFER FROM THE VICE OF NON -APPLICATION OF MIND WHEN THE ORDER RECORDS THAT NO EXPLANATION IS TENDERED. IN THE PRESENT CASE, ADMITTEDLY, IT HAS BEEN FOUND BY THE TRIBUNAL THAT THOUGH THE EXPLANATION WAS TENDERED, THE INCOME-TAX OFFICER PROCEEDED ON T HE FOOTING THAT NO EXPLANATION WAS TENDERED AND THUS, IT IS ESTABLISHE D THAT THE ORDER STANDS VITIATED FOR NON-APPLICATION OF MIND. IF A STATUTE INVESTS A PUBLIC OFFICER WITH THE AUTHORITY TO DO AN ACT IN A SPECIFIED SET OF CI RCUMSTANCES, IT IS IMPERATIVE UPON HIM TO EXERCISE THE AUTHORITY IN A MANNER APPR OPRIATE TO THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN A PARTY INTERESTED A ND HAVING A RIGHT TAKES APPROPRIATE STEPS IN THAT REGARD AND CIRCUMSTANCES FOR EXERCISE OF AUTHORITY WITH THE DISCRETION ARE SHOWN TO EXIST. THE EXERCIS E OF DISCRETION HAS TO BE IN A JUDICIAL MANNER, NAMELY, FAIRLY AND REASONABLY. APPLYING THE AFORESAID PRINCIPLES TO THE FACTS OF T HE CASE, IT IS APPARENT THAT THE ASSESSEE HAD TENDERED AN EXPLANATION BEFORE THE INCOME-TAX OFFICER IN RESPONSE TO THE SHOW-CAUSE NOTICE ISSUED BY HIM, SU CH EXPLANATION HAS BEEN IGNORED BY THE INCOME-TAX OFFICER IN ENTIRETY BY ST ATING THAT NO EXPLANATION HAS BEEN TENDERED AND IN THE CIRCUMSTANCES, THE ORD ER LEVYING PENALTY SUFFERS FROM VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND VICE OF NON- APPLICATION OF MIND AND CANNOT BE ALLOWED TO STAND. THE TRIBUNAL WAS, THEREFORE, JUSTIFIED IN HOLDING THAT THE ORDER LEVY ING THE PENALTY WAS BAD IN LAW AND COULD NOT BE SUSTAINED. 11. WE FURTHER FIND THAT HONBLE APEX COURT IN THE CASE OF HARYANA STATE CO-OP. SUPPLY & MARKETING FEDERATION LTD VS. JAYAM TEXTILES & ANR (SLP (CRIM) NO. 7700 OF 2007) ORDER DATED 07.04.2014 HAS HELD THAT PROCEDURAL DEFECTS AND IRREGULARITIES WHICH ARE CURABLE SHOULD NOT BE ALLOWED TO DEFEAT SUBSTANTIVE RIGHTS OR TO CAUSE INJUSTICE. PROCEDURE , A HAND MAIDEN TO JUSTICE, SHOULD NEVER BE MADE A TOOL TO DENY JUSTICE OR PERP ETUATE INJUSTICE BY ANY OPPRESSIVE OR PUNITIVE USE. CONSIDERING THE TOTAL ITY OF THE FACTS AND RELYING OF THE AFORESAID DECISION OF HONBLE GUJARA T HIGH COURT & APEX ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 15 - COURT AND IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT THE MATTER NEEDS RECONSIDERATION AT THE END OF THE CIT(A). WE, THERE FORE, REMIT THE ISSUE BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUE A FRESH AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND ANY OTHER EVID ENCES THAT MAY BE REQUIRED BY THE LD. CIT(A) TO DECIDE THE ISSUE. THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE NECESSARY DETAILS CALLED FOR BY THE LD. CIT(A) PROMPTLY. IN CASE OF FAILURE ON THE PART OF THE ASSESSEE TO FURN ISH THE NECESSARY DETAILS, THE LD. CIT(A) SHALL BE FREE TO DECIDE THE MATTER O N THE BASIS OF MATERIAL ON RECORD. NEEDLESS TO STATE THAT THE LD. CIT(A) SHAL L GRANT ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. THUS, THE GROUNDS RAISED BY THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. WITH RESPECT TO OTHER APPEALS, SINCE IT IS ADMI TTED BY BOTH THE PARTIES THAT THE FACTS AND CIRCUMSTANCES OF ALL THE CASES A RE IDENTICAL TO THAT OF ITA NO.2894/AHD/2013 FOR ASSESSMENT YEAR 2007-08, WE, F OR THE REASONS CITED HEREINABOVE WHILE DECIDING THE APPEAL IN ITA NO.289 4/AHD/2013 FOR ASSESSMENT YEAR 2007-2008, FOR SIMILAR REASONS AND SIMILAR DIRECTIONS ALLOW THE GROUNDS OF ASSESSEE FOR STATISTICAL PURPOSES. 13. IN THE RESULT, ALL THE SIX APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH MARCH, 2015 AT AHMEDABAD. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (ANIL CHATURVEDI) ACCOUNTANT MEMBER DATED 19/03/2015 *BIJU T, PS ITA NOS. 2892 TO 2896 /AHD/ 2013 & ITA NO.1164/AHD/2014 SHRI MEHUL J PATEL & OTHERS AYS 2007-08, 2008-09, 2009-10 - 16 - #$ %& '#&' #$ %& '#&' #$ %& '#&' #$ %& '#&'/ COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. %*() / THE RESPONDENT. 3. ++ , / CONCERNED CIT 4. , ( ) / THE CIT(A)- IV, BARODA 5. &/0 % , , / DR, ITAT, AHMEDABAD 6. 012 3 / GUARD FILE. #$ #$ #$ #$ / BY ORDER, //TRUE COPY// 4 44 4/ // / +5 +5 +5 +5 (DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD