M/s. Krishna Corporation, Bhavnagar V. The Asstt. Commissioner of Income Tax, Circle-1, Bhavnagar

ITSSA 152/AHD/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8377 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-10-2019
• Assessment Year: misc
• Appeal Filed On: 30-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ALOK SINGH
• Assessee Lawyers: MRS NIYATI SHAH
• Keywords: Opportunity of being heard; Question of law; Block assessment; Set aside
• Section: 132

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ./ IT(SS)A NO.152/AHD/2016 [BLOCK PERIOD 1.4.1990 TO 7.11.2000] M/S.KRISHNA CORPORATION EX-PARTNER VINOD SHANTILAL BUSA, FLAT NO.G-1, SIDDHI FLATS PLOT NO.1032-A, NR. VIRBHADRA AKHADA, DAWN, KRISHNA NAGAR BHAVNAGAR 364 001. VS. ACIT, CIR.1 BHAVNAGAR. ( APPLICANT ) (RESPONDENT) ASSESSEE BY : MRS.NIYATI SHAH, AR REVENUE BY : SHRI (DR.) ALOK SINGH, CIT-DR ! '#$ % &' / DATE OF HEARING : 09/10/2019 ()* % &' / DATE OF PRONOUNCEMENT: 09/10/2019 ORAL ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF T HE ASSESSEE AGAINST ORDER OF THE LD.CIT(A) DATED 29.2.2016 PASS ED FOR THE BLOCK PERIOD STARTING FROM 1.4.1990 AND ENDING ON 7.11.20 00. 2. IN THE FIRST PRELIMINARY GROUNDS OF APPEAL, THE ASSESSEE HAS PLEADED THAT THE LD.CIT(A) HAS PASSED THE IMPUGNED ORDER AFTER EXPIRY OF TIME LIMIT GRANTED TO IT BY THE ITAT VIDE ORDER DATED 5.7.2013 PASSED IN IT(SS)A.NO.41/AHD/2007. IT(SS)A NO.152/AHD/2016 2 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT AT THE PREMISE S OF SHRI MUKESH OZA ON 7.11.2000. ACCORDING TO THE REVENUE, DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING MATERIALS WERE FOUND AND SEIZED. ON PERUSAL OF ANNEXURE A/1 FROM PAGE NO.1 TO 59 IT REV EALED THAT SHRI MUKESH M. OZA HAS BOOKED TWO FLATS IN A PROJECT DEV ELOPED BY THE ASSESSEE, BEARING FLAT NOS.303 AND 304 AT SIDDHI FL ATS. ACCORDING TO THE AO, THE AO OF THE SEARCHED PERSON I.E. SHRI MUK ESH OZA HAS REMITTED THE SEIZED MATERIAL WITH A SATISFACTION NO TE THAT THE ASSESSEE HAS RECEIVED ON-MONEY ON SALE OF THESE FLATS FROM SHRI MUKESH OZA. ON THE BASIS OF THAT INFORMATION A NOTICE UNDER SEC TION 158BD WAS ISSUED TO THE ASSESSEE, WHICH WAS SERVED UPON THE A SSESSEE. AN ASSESSMENT ORDER WAS PASSED UNDER SECTION 158BD ON 30.9.2005 WHEREBY THE LD.AO HAS DETERMINED THE UNDISCLOSED IN COME FOR THE BLOCK PERIOD AT RS.53,99,800/-. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE HAS SOLD 12 FLATS. ON THE STRENGTH OF THE MATERIAL COLLECTED FROM THE PREMISES OF SHRI MUKESH OZA, THE LD.AO HAS WORKED OUT THE ALLEGED ON-MONEY RECEIVED BY THE ASSESSEE ON SALE OF THESE FLATS AND MULTIPLIED THIS AMOUNT WITH 12 AND WORKED OUT THE U NDISCLOSED INCOME. DISSATISFIED WITH THE ASSESSMENT ORDER, THE ASSESSE E CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHO DECIDED ON 30.11.2006. AGAIN DISSATISFIED, THE ASSESSEE CARRI ED THE MATTER IN APPEAL BEFORE THE TRIBUNAL, AND THE TRIBUNAL HAS DE CIDED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 28.9.2012. THE APPEA L OF THE ASSESSEE WAS DISMISSED. THEREAFTER, THE ASSESSEE FILED A MI SC. APPLICATION BEARING MA NO.236/AHD/2012, AND THIS MA WAS ALLOWED ON 12.4.2013. BY THIS ORDER IN MA, THE TRIBUNAL HAS RECALLED ITS ORDER, AND THE APPEAL WAS OF THE ASSESSEE RESTORED TO ITS ORIGINAL NUMBER . THE TRIBUNAL THEREAFTER HEARD BOTH THE PARTIES, AND DECIDED THE APPEAL VIDE ORDER DATED 5.7.2013, AND SET ASIDE ONE OF THE ISSUES TO THE CIT(A) FOR ADJUDICATION AFRESH. THE DIRECTION GIVEN BY THE TR IBUNAL IN PARA-6 READS AS UNDER: IT(SS)A NO.152/AHD/2016 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND T HAT THIS IS NOTED BY THE AO IN THE ASSESSMENT ORDER THAT IN THE COURSE OF SEARCH CARRIED OUT ON 07.11.2000 IN THE PREMISES OF MUKESH M. OZA, VARIOUS INCRIMINATING DOCUMENTS AND PAPERS WER E FOUND AND SEIZED AND THE A.O. WHO MADE THE ASSESSMENT OF SHRI MUKESH M OZA U/S 158BC HAD CONSIDERED THE SEIZED MATERIAL IN THE SATISFACTION NOTE WRITTEN FOR FORMATION OF A BELIE F THAT THE PRESENT ASSESSEE HAD EARNED UNDISCLOSED INCOME FOR THE CONC ERNED BLOCK PERIOD. BUT THERE IS NO FINDING GIVEN BY LD. CIT(A ) AS TO WHETHER ANY MATERIAL WAS FOUND IN THE COURSE OF SEARCH, CAR RIED OUT IN THE CASE OF MUKESH M OZA ALTHOUGH IT IS THE CLAIM OF TH E LD. A.R. THAT THIS CONTENTION WAS RAISED BEFORE LD. CIT(A) IN SUP PORT OF GROUND.NO.1 RAISED BY THE ASSESSEE BEFORE LD. CIT(A ) WHICH WAS REJECTED BY HIM BY STATING THAT THIS GROUND IS GENE RAL IN NATURE, UNDER THESE FACTS, WE FEEL THAT IN THE INTEREST OF JUSTICE, THIS MATTER SHOULD GO BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION ON THIS ASPECT ALONE, AS TO WHETHER THE AO OF THE P RESENT ASSESSEE COULD HAD ANY JURISDICTION ON THE ASSESSEE U/S. 158BD AFTER EXAMINING THIS ASPECT AS TO WHETHER ANY INCRI MINATING MATERIAL/DOCUMENT WAS SEIZED IN THE COURSE OF SEARC H CARRIED ON 07.11.2000 IN THE CASE OF MUKESH M OZA BECAUSE WE F IND THAT THERE IS AN ARGUMENT OF THE LD.AR BEFORE US THAT AL THOUGH A PAPER BOOK OF 221 PAGES HAD BEEN FILED BY THE REVENUE BEF ORE THE TRIBUNAL, THERE IS NO DOCUMENT AVAILABLE IN THE PAP ER BOOK SHOWING ANY INCRIMINATING FOUND AND SEIZED IN THE C OURSE OF SEARCH CARRIED OUT ON 07.11.2000 IN THE CASE OF MUK ESH M. OZA. WE, THEREFORE, SET ASIDE THE ORDER OF LD. CITTA) AN D RESTORE THE MATTER BACK TO HIS FILE FOR A DECISION ON THIS LIMI TED ASPECT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD THE S IDES AND AFTER EXAMINING THE RECORDS, AND HE SHOULD PASS A SPEAKIN G AND REASONED ORDER WITHIN A PERIOD OF THREE MONTHS FROM THE DATE OF RECEIPT OF THIS TRIBUNAL ORDER. WE ALSO WANT TO MAK E IT CLEAR THAT THE ASSESSEE SHOULD NOT SEEK ANY ADJOURNMENT BEFORE LD. CIT(A) WITHOUT COMPELLING REASONS AND SHOULD COOPERATE WIT H HIM AND SHOULD PROVIDE ALL THE DETAILS/EVIDENCES REQUIRED B Y LD.CIT(A) WHICH ARE IN HIS POSSESSION AND CONTROL. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 4. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, A PERUSAL OF LAST FEW LINES OF PARAGRAPH-6 EXTRACTED (SUPRA)WOULD INDICAT E THAT TIME LIMIT GIVEN TO THE CIT(A)WAS ONLY THREE MONTHS FROM RECEI PT OF THE ORDER. BUT THE LD.FIRST APPELLATE AUTHORITY HAS TAKEN TWO- HALF-YEARS TO DECIDE THE APPEAL. SHE FURTHER CONTENDED THAT THE ASSESSE E HAS APPRAISED THE IT(SS)A NO.152/AHD/2016 4 LD.CIT(A) TIME AND AGAIN ABOUT THE DIRECTIONS GIVEN BY THE TRIBUNAL FOR DECIDING THE APPEAL WITHIN THREE MONTHS. IN ORDER TO BUTTRESS HER CONTENTIONS, SHE TOOK US THROUGH VARIOUS CORRESPOND ENCE MADE TO THE CIT(A) IN THIS CONNECTION AND PLACED ON PAGES NO.36 0 TO 370. THE ASSESSEE HAS PLACED ON COPIES OF THREE-FOUR LETTERS WRITTEN TO THE CIT(A) APPRAISING HER ABOUT TIME LIMIT GIVEN BY THE TRIBUN AL FOR EARLY DECISION ON THE APPEAL. AT THIS STAGE, WE DEEM IT APPROPRIA TE TO TAKE NOTE ONE OF THE LETTERS DATED 19.1.2015, WHICH READS AS UNDE R: FROM: M/S KRISHNA CORPORATION, C/OVINODS.BUSA, G - 5, NAGESHWAR BUILDING, PADMAVATI NAGAR, 150 FT ROAD, BHAYANDAR (WEST), MUMBAI, DIST THANE 401 101. JANUARY 19,2015. TO THE COMMISSIONER OF INCOME TAX, APPEALS 6, AMDAVAD. RESPECTED SIR, REF: IT A T NO. 41 / AHD / 2007 ORDER DTD, 5/12/201 4. AS PER YOUR INSTRUCTION GIVEN TO US DURING THE LAST HEARING ON 13- 01-2015 WE HEREBY SUBMIT COPY OF LETTER ADDRESSED TO THE ACIT, CIRCLE -1, BH AVNAGAR DTD. 29-11-2013 REQUESTING TO PASS ON ' PAPERBOOK AND OT HER PAPERS FILED BY THE' DEPARTMENT DURING COURSE OF HEARING BEFORE TRIBUNAL' TO C . HOWEVER THEY HAVE N OT SUPPLIED TO YOU. HOWEVER, AS PER YOUR INSTRUCTION COPY OF DEPARTMENT SUBMISSION DTD.11-11-2011 IS ATTACHED HEREWITH (PAGE NO1 221 ) FURTHER WE RELY UPON ALL THE SUBMISSIONS AND ARGUME NTS MADE BEFORE YOU BY LATE SHRI A. L PAREKH (ADVOCATE). IT(SS)A NO.152/AHD/2016 5 WE ALSO RELY UPON LIST/OF EVENTS AND DATES FILED BE FORE THE HON'BLE IT AT BENCH D ON 10-6-2013. THE BLOCK ASSESSMENT ORDER FOR PERIOD 1/4/1990 TO 7 /11/2000 WAS REMANDED BY HONBLE ITAT 'B' BENCH AMDAVAD WITH A DIRECTION FOR 'A FRESH DECISION ON THIS ASPECT ALONE AS TO WHETHE R THE A 0 OF THE PRESENT ASSESSEE COULD HAD ANY JURISDICTION ON THE ASSESSEE U/S 158 B D AFTER EXAMINING THIS ASPECT AS TO WHETHER A NY INCREMENTING MATERIAL DOCUMENT WAS SEIZED IN THE CO URSE OF SEARCH CARRIED ON 7/11/2000 IN CASE OFMUKESH M. OZA BECAUSE WE FIND THAT THERE IS AN ARGUMENT OF ID. A R BEFORE US THAT ALTHOUGH A PAPER BOOK OF 221 PAGES HAD BEEN FILED BY THE REVEN UE BEFORE TRIBUNAL, THERE IS NO DOCUMENT AVAILABLE IN THE PAP ER BOOK SHOWING ANY INCREMENTING MATERIAL FOUND AND SEIZED IN THE COURSE OF SEARCH CARRIED OUT ON 7/11/2000 IN CASE OFMUKESH M. OZA.' E APPELLANT MOST RESPECT FULLY BEG TO DRAW YOUR ATT ENTION TO PAGE 3 OF BLOCK ASSESSMENT ORDER RELYING ON 'PAGE 1 OF A NNEXURE -A-1 FURTHER PAGE NO 12 & 17(ANNEXURE A-1 SEIZED ON 13/1 1/2000 AS REFERRED ABOVE....' IT IS THERE FOR CLEAR THAT ANNEXURE A WAS SEIZED ON 13/11/2000. FURTHER WE WOULD LIKE TO DRAW YOUR ATTENTION TO PAG E 73 OF 221 PAPER BOOK REFERRED BY HON'BLE 1TAT. IT IS A STATEM ENT RECORDED ON OATH AT AVKAR BHAVAN, MUMBAI ON 29/1/2001. Q UESTION NO. 2 ASKED BY DY. DIRECTOR OF INCOME TAX (INV) UNIT II -(4) STATS THAT ANNEXURE A-A WAS SEIZED ON 13/11/2000. THUS ANNEXURE A -1 WAS SEIZED FORM SHRI MUKESH M. O ZA ON 13/11/2000 WHILE HIS BLOCK ASSESSMENT IS ONLY UP TO 7/11/2000. WE RELY UPON THE DECISION OF 3. THE HONBLE PUNJAB AND HARYANA HIGH COURT IN TH3 CASE OF CIT V/S MRUDULA PROPRIETOR OF DHRUV FABRICS 335 ITR PAGE NO.226 ACTION U/S158BD MUST BE TAKEN BEFORE COMPLETION OF ASSESSMENT OF SEARCHED PERSON. SINCE THE BLOCK ASSESSMENT U/S.158BC WAS COMPLED ON 30-5-2005 AND SATISFACTION U/S 158 BD WAS RECORDED ON 15-07-2005 THE SAID PROEEDINGS U/S158BD ARE NOT VAILD. THE HON'BLE ITAT, AMDAVAD IN CASE OF NALIN D.SHAH, AHMEDABAD V/S INCOME TAX OFFICER DECIDED ON 29-12-2001, THERE WAS A JUSTIFICATION FOR THE ASSESSING OFFICER TO INITATE IT(SS)A NO.152/AHD/2016 6 PROCEEDINGS AGAINST THE ASSESSEE, MCASE OF ORE PARTICULALY WHEN THE NOTICE WAS ISSUED U/S 158 B D OF THE INCOME TAX ACT, AFTER THE COMPLETION OF ASSESSM ENT IN CASE OF PERSON SEARCHED. THE ISSUE OF NOTICE U/S 158 B D BY THE ASST. COMMIS SIONER OF INCOME TAX CIRCLE -1, BHAVNAGAR FOR RECOVERY OF DOC UMENTS BEYOND THE BLOCK PERIOD IS THEREFORE WITHOUT JURISD ICTION AND BAD IN LAW. KINDLY SET A SIDE THE BLOCK ASSESSM ENT DELETE THE ADDITION OF RS 53,99,800/= MADE ON ASSUMPTIONS AND VACATE THE DEMAND RAISED BY HIM. AND FOR THIS ACT OF KINDNESS THE APPELLANT SHALL ALWAYS REMAIN GRATEFUL. 5. ON THE STRENGTH OF THE ABOVE, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER IS NOT SUSTAINABL E AND DESERVES TO BE QUASHED. 6. ON THE OTHER HAND, THE LD.CIT-DR CONTENDED THAT A PERUSAL OF THE TRIBUNALS ORDER WOULD INDICATE THAT THIS IS ONLY G UIDELINE REQUIRES TO BE FOLLOWED AND NOT MANDATORY DIRECTION. HE FURTHER C ONTENDED THAT THE TRIBUNAL HAS OBSERVED THAT THE ASSESSEE WOULD NOT S EEK ADJOURNMENT. IT IS NOT ASCERTAINABLE, WHETHER THE ASSESSEE HAS S OUGHT ADJOURNMENT OR NOT. HE FURTHER EMPHASIZES THAT THIS IS OLD MAT TER AND SEARCH WAS CARRIED OUT WAY BACK IN THE YEAR 2000, AND THE CIT( A) WAS EXAMINING VARIOUS ASPECTS AFTER 13 YEARS, THEREFORE, PROBABLY THE SEIZED MATERIAL WOULD NOT BE EASILY AVAILABLE TO THE CIT(A), AND TH EREFORE, SOME MORE TIME WAS TAKEN FOR FINALISATION OF THE MATTER. IN ORDER WORDS, HIS EMPHASIS IS THAT THIS DIRECTION OF THE TRIBUNAL BE NOT CONSTRUED AS MANDATORY, AND ONLY DIRECTORY. THE MATTER SHOULD B E DECIDED ON MERIT. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE RECORD CAREFULLY. A PERUSAL OF THE TRIBUNALS ORDE R WOULD INDICATE THAT THE TRIBUNAL HAS SPECIFICALLY DIRECTED THE LD.CIT(A ) TO DECIDE THE APPEAL WITHIN THREE MONTHS FROM THE RECEIPT OF THE ORDER. AN EXECUTING COURT CANNOT GO BEYOND THE SCOPE OF DECREE. IT HAS TO EX ECUTE AS IT IS. IF THE LD.CIT(A) HAS ANY RESERVATION ABOUT THE TIME LAP, T HEN EITHER AN IT(SS)A NO.152/AHD/2016 7 APPROPRIATE APPLICATION OUGHT TO HAVE BEEN MADE TO THE TRIBUNAL FOR ENHANCEMENT OF THE TIME LIMIT OR THIS DIRECTION OUG HT TO HAVE BEEN CHALLENGED BEFORE THE HIGHER AUTHORITIES. ONCE A S PECIFIC TIME HAS BEEN GIVEN BY AN APPELLATE AUTHORITY BY REMITTING THE MA TTER TO THE LOWER AUTHORITIES TO ADJUDICATE THE MATTER, THEN THAT TIM E LIMIT HAS TO BE ADHERED TO. OTHERWISE, THERE WOULD NOT BE ANY FINA LITY TO THE ORDER. A POSSIBLE CONTENTION FOR LOWER AUTHORITIES COULD BE, THOUGH THE TRIBUNAL HAS DELETED THE ADDITION ON ISSUE, BUT NOW FRESH MA TERIAL SURFACED, AND THEREFORE, IT IS APPROPRIATE FOR THE AO TO MAKE ADD ITION ON THE BASIS OF FRESH MATERIAL. IF THAT BE ALLOWED TO HAPPEN, THEN HOW THE FINALITY WILL BE ATTAINED ?. IN ORDER TO ATTAIN FINALITY TO THE LITIGATION, EXECUTING COURT HAS TO FOLLOW THE DECREE OF THE HIGHER COURTS ; WHETHER RIGHT OR WRONG. THEY DO NOT HAVE ANY JURISDICTION TO SIT OV ER THE JUDGMENT OF HIGHER FORUM. AT THIS STAGE, WE DEEM IT APPROPRIAT E TO REFER TO THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF BH OPAL SUGAR INDUSTRIES LTD. VS. ITO, REPORTED IN 40 ITR 618 (SC ). THE FACTS IN THIS CASE AS NOTICED BY THE HONBLE SUPREME COURT ARE TH AT THE ASSESSEE COMPANY WAS CARRYING ON THE BUSINESS OF MANUFACTURI NG AND SELLING SUGAR IN VARIOUS GRADES AND QUANTITIES. DURING THE RELEVANT PERIOD THE COMPANY GREW ITS OWN SUGARCANE AND BROUGHT THE SAME ALONG WITH THE CULTIVATOR'S SUGARCANE TO ITS FACTORY FOR MANUFACTU RING SUGAR. FOR THE SUGARCANE GROWN ON ITS OWN FARMS THE APPELLANT COMP ANY CLAIMED RS. 1-13-0 PER MAUND AS ITS MARKET VALUE. HOWEVER, THE REVENUE COMPUTED THE MARKET VALUE AT THE RATE OF RS. 1-6-0 PER MAUND ; THUS ACCORDING TO THIS COMPUTATION THERE WAS A LOSS AND THE DEPARTMENT HELD IN HIS ASSESSMENT ORDER THAT THE ASSESSEE WAS NOT E NTITLED TO CLAIM ANY DEDUCTION OF AGRICULTURAL INCOME FOR THE ASSESSMENT YEAR. THE ASSESSEE COMPANY THEN APPEALED TO THE APPELLATE ASSISTANT CO MMISSIONER, WHO DETERMINED THE MARKET VALUE OF THE SUGARCANE GROWN ON THE ASSESSEES OWN FARMS AT THE RATE OF RS. 1-7-9 PER MAUND. THIS RESULTED IN AN AGRICULTURAL INCOME OF RS. 29,360, WHICH THE APPELL ATE ASSISTANT COMMISSIONER ALLOWED TO BE DEDUCTED FROM THE TOTAL INCOME OF THE IT(SS)A NO.152/AHD/2016 8 ASSESSEE. NOT SATISFIED WITH ORDER OF THE APPELLAT E ASSISTANT COMMISSIONER, THE ASSESSEE PREFERRED AN APPEAL TO T HE TRIBUNAL. THE TRIBUNAL DISPOSED OF THE APPEAL OF THE ASSESSEE WIT H FOLLOWING DIRECTIONS: WE WOULD, THEREFORE, DIRECT THE INCOME-TAX OFFICE R TO ASCERTAIN THE AVERAGE TRANSPORT CHARGES PER MAUND FROM THE CE NTRES TO THE FACTORY AND TO ADD TO IT THE RATE OF RS. 1-4-6 PER MAUND AND ON THAT BASIS WORK OUT THE MARKET VALUE OF THE SUGARCA NE GROWN BY THE ASSESSEE COMPANY IN ITS OWN FARMS. IF THE MARKE T VALUE COMES TO MORE THAN RS. 1-7-9 PER MAUND FURTHER RELI EF TO THE NECESSARY EXTENT WILL BE GIVEN BY THE INCOME-TAX OF FICER. IF, HOWEVER, THE MARKET VALUE IS LESS THAN RS. 1-7-9 TH E APPEAL MUST FAIL.' 8. DISSATISFIED WITH THE DIRECTION OF THE TRIBUNAL, REVENUE FILED AN APPLICATION UNDER SECTION 66(1) OF THE INCOME TAX A CT FOR MAKING A REFERENCE TO, ON THE QUESTION OF LAW ARISE OUT OF T HE TRIBUNALS ORDER, BUT, THIS APPLICATION WAS WITHDRAWN BY THE COMMISSI ONER OF INCOME TAX ON 4.8.1954. HOWEVER, THEREAFTER, THE DEPARTMENT D ID NOT GIVE EFFECT TO THE DIRECTIONS OF THE TRIBUNAL ON THE GROUND THA T THE ASSESSEE- COMPANY HAS DEBITED A SUM OF RS.59,116/- ONLY TOWAR DS TRANSPORTATION OF EXPENSES. IN OTHER WORDS, THE DEPARTMENT HAS DI SCOVERED NEW EVIDENCE OR NEW MATERIAL FOR JUSTIFYING ITS STAND O F NOT GIVING EFFECT TO THE TRIBUNALS DIRECTIONS. DISSATISFIED WITH THE A CTION OF THE DEPARTMENT, THE ASSESSEE FILED WRIT PETITION BEFORE THE JUDICIAL COMMISSIONER, BHOPAL, THEN EXERCISING THE POWER OF A HIGH COURT FOR THAT AREA. THE JUDICIAL COMMISSIONER FOUND IN EXPR ESS TERMS THAT THE INCOME TAX DEPARTMENT HAD ACTED ARBITRARILY AND IN CLEAR VIOLATION OF THE DIRECTIONS GIVEN BY THE TRIBUNAL. IN OTHER WOR DS, JUDICIAL COMMISSIONER FOUND THAT THE DEPARTMENT HAD DISREGAR DED THE ORDER OF THE TRIBUNAL, FAILED TO CARRY OUT HIS DUTY ACCORDIN G TO THE LAW AND HAD ACTED ILLEGALLY. HOWEVER, IN SPITE OF THAT FACT, THE LD.JUDICIAL COMMISSIONER HAS DISMISSED WRIT PETITION ON THE GRO UND THAT THE TRIBUNAL WENT WRONG IN NOT TREATING THE CENTRES AS MARKETS WITHIN THE IT(SS)A NO.152/AHD/2016 9 MEANING OF RULE 23 OF THE INCOME-TAX RULES. IN OTH ER WORDS, THE LD.JUDICIAL COMMISSIONER WENT ON TO COMMENT ON THE DECREE OF THE TRIBUNAL WHICH WAS NOT UNDER CHALLENGE BEFORE HIM. THIS ISSUE TRAVELLED TO HONBLE SUPREME COURT, AND THE HONBLE SUPREME C OURT WHILE ALLOWING THE APPEAL OF THE ASSESSEE HAS RECORDED TH E FOLLOWING FINDING: WE THINK THAT THE LEARNED JUDICIAL COMMISSIONER WA S CLEARLY IN ERROR IN HOLDING THAT NO MANIFEST INJUSTICE RESULTE D FROM THE ORDER OF THE RESPONDENT CONVEYED IN HIS LETTER DATED MARC H 24, 1955. BY THAT ORDER THE RESPONDENT VIRTUALLY REFUSED TO CARR Y OUT THE DIRECTIONS WHICH A SUPERIOR TRIBUNAL HAD GIVEN TO H IM IN EXERCISE OF ITS APPELLATE POWERS IN RESPECT OF AN ORDER OF A SSESSMENT MADE BY HIM. SUCH REFUSAL IS IN EFFECT A DENIAL OF JUSTI CE, AND IS FURTHER MORE DESTRUCTIVE OF ONE OF THE BASIC PRINCIPLES IN THE ADMINISTRATION OF JUSTICE BASED AS IT IS IN THIS CO UNTRY ON A HIERARCHY OF COURTS. IF A SUBORDINATE TRIBUNAL REFU SES TO CARRY OUT DIRECTIONS GIVEN TO IT BY A SUPERIOR TRIBUNAL IN TH E EXERCISE OF ITS APPELLATE POWERS, THE RESULT WILL BE CHAOS IN THE A DMINISTRATION OF JUSTICE AND WE HAVE INDEED FOUND IT VERY DIFFICULT TO APPRECIATE THE PROCESS OF REASONING BY WHICH THE LEARNED JUDICIAL COMMISSIONER WHILE ROUNDLY CONDEMNING THE RESPONDENT FOR REFUSIN G TO CARRY OUT THE DIRECTIONS OF THE SUPERIOR TRIBUNAL, YET HELD T HAT NO MANIFEST INJUSTICE RESULTED FROM SUCH REFUSAL. IT MUST BE REMEMBERED THAT THE ORDER OF THE TRIBUNA L DATED APRIL 22, 1954, WAS NOT UNDER CHALLENGE BEFORE THE JUDICI AL COMMISSIONER. THAT ORDER HAD BECOME FINAL AND BINDI NG ON THE PARTIES, AND THE RESPONDENT COULD NOT QUESTION IT I N ANY WAY. AS A MATTER OF FACT THE COMMISSIONER OF INCOME-TAX HAD M ADE AN APPLICATION FOR A REFERENCE, WHICH APPLICATION WAS SUBSEQUENTLY WITHDRAWN. THE JUDICIAL COMMISSIONER WAS NOT SITTIN G IN APPEAL OVER THE TRIBUNAL AND WE DO NOT THINK THAT, IN THE CIRCUMSTANCES OF THIS CASE, IT WAS OPEN TO HIM TO SAY THAT THE OR DER OF THE TRIBUNAL WAS WRONG AND, THEREFORE, THERE WAS NO INJ USTICE IN DISREGARDING THAT ORDER. AS WE HAVE SAID EARLIER, S UCH A VIEW IS DESTRUCTIVE OF ONE OF THE BASIC PRINCIPLES OF THE A DMINISTRATION OF JUSTICE. IN FAIRNESS TO HIM IT MUST BE STATED THAT LEARNED C OUNSEL FOR THE RESPONDENT DID NOT ATTEMPT TO SUPPORT THE JUDGMENT OF THE JUDICIAL COMMISSIONER ON THE GROUND THAT NO MANIFES T INJUSTICE RESULTED FROM THE REFUSAL OF THE RESPONDENT TO CARR Y OUT THE DIRECTIONS OF A SUPERIOR TRIBUNAL. HE CONCEDED THAT EVEN IF THE ORDER OF THE TRIBUNAL WAS WRONG, A SUBORDINATE AND INFERIOR TRIBUNAL COULD NOT DISREGARD IT; HE READILY RECOGNI SED THE SANCTITY AND IMPORTANCE OF THE BASIC PRINCIPLE THAT A SUBORD INATE TRIBUNAL IT(SS)A NO.152/AHD/2016 10 MUST CARRY OUT THE DIRECTIONS OF A SUPERIOR TRIBUNA L. HE ARGUED, HOWEVER, THAT THE ORDER OF THE TRIBUNAL WAS UNINTEL LIGIBLE AND THE RESPONDENT DID HIS BEST TO UNDERSTAND IT ACCORDING TO HIS' LIGHT. THIS ARGUMENT ADVANCED ON BEHALF OF THE RESPONDENT APPEARS TO US TO BE SOMEWHAT DISINGENUOUS. WE FIND NO DIFFICUL TY IN UNDERSTANDING THE ORDER OF THE TRIBUNAL; IT DIRECTE D THE RESPONDENT 'TO ASCERTAIN THE AVERAGE TRANSPORT CHAR GES PER MAUND FROM THE CENTRES TO THE FACTORY AND ADD TO IT THE RATE OF RS. 1-4-6 PER MAUND OF SUGARCANE'. THE DIRECTION IS CLEAR AND UNAMBIGUOUS. THE RESPONDENT INSTEAD OF ASCERTAINING THE AVERAGE TRANSPORT CHARGES PER MAUND FROM THE CENTRES TO THE FACTORY, REFERRED TO THE TRANSPORT CHARGES FROM THE FARMS TO THE FACTORY AND ON THAT FOOTING DISREGARDED THE DIRECTIONS OF T HE TRIBUNAL ; FOR THE RESPONDENT TO SAY THEREAFTER THAT THE ORDER OF THE TRIBUNAL WAS NOT INTELLIGIBLE BETRAYS A REGRETTABLE LACK OF CANDOUR. WE MUST, THEREFORE, REJECT THE ARGUMENT OF LEARNED COU NSEL FOR THE RESPONDENT. THE LEARNED JUDICIAL COMMISSIONER REFERRED TO THREE DECISIONS IN SUPPORT OF THE PROPOSITION THAT A DIRECTION OR ORDE R IN THE NATURE OF A WRIT OF MANDAMUS CANNOT BE CLAIMED AS OF RIGHT , NOR NEED SUCH A WRIT ISSUE FOR EVERY OMISSION OR IRREGULARIT Y: BIMAL CHAND V. CHAIRMAN, JIAGUNJ AZIMGUNJ MUNICIPALITY AN D ANOTHER AIR 1954 CAL. 285; GRAM PANCHAYAT, VIDULOF VIDUL V. MULTI PURPOSE CO-OPERATIVE SOCIETY OF VIDU L & ANOTHER AIR 1954 NAG. 82AND MESSRS. SENAIRAM DOONGARMALL V. COM MISSIONER OF INCOME-TAX, ASSAM [1956] 29 ITR 122. IN THE VIEW WHICH WE HAVE EXPRESSED, NAMELY, THAT BY THE IMPUGNED ORDER THE RESPONDENT FAILED TO CARRY OUT A LEGAL DUTY IMPOSED ON HIM AND SUCH FAILURE WAS DESTRUCTIVE OF A BASIC PRINCIPLE O F JUSTICE, A WRIT OF MANDAMUS SHOULD ISSUE EX DEBITO JUSTITIAE TO COM PEL THE RESPONDENT TO CARRY OUT THE DIRECTIONS GIVEN TO HIM BY THE INCOME-TAX APPELLATE TRIBUNAL, BOMBAY, AND IT IS UN NECESSARY TO CONSIDER THE DECISIONS REFERRED TO ABOVE EXCEPT MER ELY TO STATE THAT IN NONE OF THEM AROSE ANY QUESTION OF CONDONIN G A REFUSAL BY AN INFERIOR TRIBUNAL TO CARRY OUT THE DIRECTIONS GI VEN TO THAT TRIBUNAL BY A SUPERIOR TRIBUNAL IN THE UNDOUBTED EX ERCISE OF ITS APPELLATE POWERS, ON THE GROUND THAT THE ORDER OF T HE SUPERIOR TRIBUNAL WAS WRONG. WE MUST, THEREFORE, ALLOW THIS APPEAL, SET ASIDE TH E JUDGMENT AND ORDER OF THE JUDICIAL COMMISSIONER DATED FEBRUARY 1 4, 1956, AND ISSUE AN ORDER DIRECTING THE RESPONDENT TO CARRY OU T THE DIRECTIONS GIVEN BY THE INCOME-TAX APPELLATE TRIBUNAL, BOMBAY, IN ITS JUDGMENT AND ORDER DATED APRIL 22, 1954. THE APPELL ANT COMPANY WILL BE ENTITLED TO ITS COSTS IN THE PROCEEDINGS BE FORE THE JUDICIAL COMMISSIONER AND IN THIS COURT.: IT(SS)A NO.152/AHD/2016 11 THE ABOVE JUDGMENT DO INDICATE THAT SUBORDINATE AUT HORITIES HAVE NO JURISDICTION TO TINKER WITH DIRECTIONS OF A HIGH ER FORUM UNDER THE GARB THAT THE TRIBUNAL WAS NOT JUSTIFIED IN GIVING SUCH DIRECTIONS; IN EXECUTION OF AN ORDER BECOMING FINAL, THE EXECUTING COURT CAN NOT SIT OVER THAT ORDER AS AN APPELLATE AUTHORITY. IT HAS TO JUST FO LLOW THE ORDER AND EXECUTE IT. THE LD.CIT(A) HAS FAILED TO PASS THE O RDER WITHIN TIME LIMIT GIVEN BY THE TRIBUNAL, AND THEREFORE, HER ORDER IS NOT SUSTAINABLE. 9. IT IS FURTHER OBSERVED THAT THE STAND OF THE ASS ESSEE BEFORE THE TRIBUNAL WAS THAT THERE IS NO INCRIMINATING MATERIA L AVAILABLE IN SUPPORT OF THE ADDITION MADE BY THE AO. THE TRIBUNAL HAS R EMITTED THE MATTER TO IDENTIFY WHETHER ANY MATERIAL IS AVAILABLE FOR I NVOKING JURISDICTION UNDER SECTION 158BD. SINCE THE LD.CIT(A) FAILED TO ADJUDICATE THE ISSUE WITHIN THE TIME PROVIDED BY THE TRIBUNAL, THEN IT I S TO BE ASSUMED THAT NO INCRIMINATING MATERIAL WAS POSSESSED BY THE REVE NUE IN SUPPORT OF THE ADDITION MADE UNDER SECTION 158BD, AND THEREFOR E, ADDITION DESERVES TO BE DELETED. 10. WITH THE ABOVE OBSERVATION, WE QUASH THE IMPUGN ED ORDER OF THE CIT(A) AND DELETE THE ADDITION. APPEAL OF THE ASSE SSEE IS, THUS, ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 9 TH OCTOBER, 2019. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/10/2019