Sri Karun Dutt Singh alias Rinku Singh, Chennai V. ACIT, Ernakulam

MA 21/COCH/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7199 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 16-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-04-2011
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: T N SEETHARAMANADV
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM M.P. NO. 21/COCH/2011 (ARSG. OUT OF I.T.A. NO. 25/COCH/2009) ASSESSMENT YEAR:2007-08 SHRI KARUN DUTT SINGH ALIAS RINKU SINGH, C/O PRAKASH GOLD PALACE P. LTD., 144, PURASAWALKAM HIGH ROAD, KELLYS, CHENNAI-600 010 VS . THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE-APPLICANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI T.N.SEETHARAMAN, ADV.-AR REVENUE BY MS. S. VIJAYAPRABHA, JR.DR DATE OF HEARING 16/09/2011 DATE OF PRONOUNCEMENT 25/11/2011 O R D E R PER SANJAY ARORA, AM: THIS IS AN APPLICATION FOR A RECALL OF ITS ORDER D ATED 9.2.2011 (FOR THE ASSESSMENT YEAR (A.Y.) 2007-08) BY THE TRIBUNAL, MOVED BY THE ASSESSEE-RESPONDENT U/S. 254(2) OF THE INCOME-TAX ACT, 1961 ('THE ACT' HEREINAFTER). 2.1 OPENING THE ARGUMENTS ON BEHALF OF THE ASSESSEE , THE LD. AR, HIS COUNSEL, AFTER CLARIFYING (ON A QUERY BY THE BENCH) THAT NO APPEAL STOOD PREFERRED TO DATE AGAINST THE IMPUGNED ORDER BEFORE THE HONBLE HIGH COURT, STATE D THAT IN VIEW OF THE CHANGE IN THE CONSTITUTION OF THE BENCH; THE JUDICIAL MEMBER (JM) CONSTITUTING THE BENCH THAT HEARD THE APPEAL HAVING BEEN SINCE TRANSFERRED, HE WOULD BEGI N BY RECOUNTING BRIEFLY THE FACTS OF THE CASE. THIS IS A CASE OF A PERSON FOUND IN POSS ESSION OF GOLD JEWELLERY, WHO AT THE VERY M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 2 THRESHOLD STATED, BOTH TO THE POLICE WHICH APPREH ENDED HIM IN THE FIRST INSTANCE - AS WELL AS THE REVENUE DEPARTMENT, WHICH REQUISITIONED THE SAME (GOLD JEWELLERY) ON BEING INFORMED BY THE POLICE, THAT HE WAS EMPLOYED WITH M /S. PRAKASH GOLD PALACE (P.) LTD. (`PGPL FOR SHORT), CARRYING THE GOODS OF HIS EMPLO YER. THE LD. CIT(A), THE FIRST APPELLATE AUTHORITY, TAKING COGNIZANCE OF THE SAME, AS WELL A S THE EVIDENCE FURNISHED BY THE ASSESSEE IN RESPECT OF THE SAID GOODS REPRESENTING THE STOCK-IN-TRADE OF PGPL, DELETED THE ADDITION MADE BY THE AO U/S. 69A OF THE ACT. IN THE PROCEEDINGS BEFORE THE TRIBUNAL, WHILE THE LD. CIT-DR, SHRI PAVAN VED, RELIED ON THE ASSESSMENT ORDER, HE DID ON THE ORDER OF THE FIRST APPELLATE AUTHORITY. IN ADDITION, AS HE WANTED TO BRING THE RELEVANT MATERIAL ON RECORD, HE FILED A PAPER-BOOK (PB), TAKING THE COUR T THROUGH THE SAME. THE TRIBUNAL, HOWEVER, RESTORED THE ASSESSMENT ORDER. AN EMPLOYE E EARNING A MEAGRE SALARY OF ` 6000/- PER MONTH WAS, THUS, ASSESSED TO TAX FOR THE SAID GOODS AMOUNTING TO ` 63.64 LAKHS VIDE THE IMPUGNED ORDER. IN FACT, THE SALES-T AX AUTHORITIES HAD ALSO TREATED IT AS REPRESENTING THE CONCEALED TURNOVER OF PGPL, WHICH THE TRIBUNAL DISMISSED AS OF LITTLE CONSEQUENCE, STATING THAT THE SCOPE OF THE TWO ENA CTMENTS WAS VASTLY DIFFERENT. THE TRIBUNAL HAS REVERSED THE SPECIFIC FINDINGS BY THE LD. CIT(A) WITHOUT STATING ITS REASON/S FOR THE SAME. IN FACT, ITS ORDER WAS PRONOUNCED ON LY ON 09.02.2011, I.E., A GOOD SEVEN MONTHS AFTER THE ORIGINAL HEARING ON 24.6.2010. IN THE INTERIM, THE CASE WAS POSTED FOR HEARING TWICE, I.E., ON 8.9.2010 AND 14.12.2010. O N BOTH THE OCCASIONS, HOWEVER, NO ARGUMENTS TOOK PLACE BY EITHER SIDE, THE HEARINGS B EING ONLY FORMAL. THE ENTIRE ORDER BY THE TRIBUNAL IS A RESULT OF A POST HEARING EXERCISE , DONE BEHIND ITS BACK, RELYING ON CASE LAWS WHICH WERE NOT REFERRED TO BY EITHER PARTY BEF ORE IT. FURTHER, IT RAISED A LOT OF QUERIES, DRAWING INFERENCE BOTH FOR AND AGAINST THE ASSESSEE; BEING MOSTLY AGAINST THE ASSESSEE. THE SAME, IF POSED THERE-TO, COULD BE AN SWERED BY IT. IN FACT, SOME OF THEM STAND LISTED BY THE ASSESSEE ITSELF VIDE ITS GROUND /S ASSUMED BEFORE THE LD. CIT(A), VIZ. GROUND NOS. 7 TO 11. THE REVENUES APPEAL, IN CONTR ADISTINCTION, RAISED ONLY ONE EFFECTIVE GROUND, GROUND NO. 2. AS AN EXAMPLE, THE TRIBUNAL VIDE PARA 4.10 OF ITS ORDER OBSERVES THAT THE ASSESSEE HAD PAID TAX OF ` 24 LAKHS ON 2.2.2008 AND, THEREFORE, CANNOT BE CONSIDERED AS A MAN OF NO MEANS. THE SAME HAD, IN FACT, BEEN PAID BY PGPL (STATING THE PAYMENT PARTICULARS) ON THE DIRECTIONS BY THE HONB LE HIGH COURT FOR GETTING THE M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 3 REQUISITIONED GOLD ORNAMENTS RELEASED. THE SAME, I F POSED TO THE ASSESSEE, COULD HAVE BEEN ANSWERED, AS ALSO EACH OF THE OTHER QUERIES. THE IMPUGNED ORDER IS CLEARLY AN INCORREC T ORDER, PASSED IN VIOLATION OF THE RULES OF LAW AND PROCEDURE, INCONSISTENT WITH THE MAXIM AUDI ALTERAM PARTEM. THE SAME MAY THEREFORE BE RECALLED AND HEARD AFRESH, AND FOR WHI CH THE TRIBUNAL HAS AMPLE POWERS. TOWARDS THIS, HE CITED AND READ OUT THE DECISION IN THE CASE OF ITO VS. S.B. SINGAR SINGH AND SONS (1970) 75 ITR 646 (ALL.), HOLDING THAT THE TRIBUNA L HAD INHERENT POWERS TO REVIEW ITS ORDER IN ORDER TO CORRECT A WRONG DONE B Y IT TO A PARTY. 2.2 THE LD. DR, ON THE OTHER HAND, VEHEMENTLY O PPOSED THE ASSESSEES OBJECTION. WHAT THE ASSESSEE ESSENTIALLY SEEKS BY WAY OF A RECALL I S A REVIEW OF ITS ORDER BY THE TRIBUNAL, WHICH IT IS CLEARLY INCOMPETENT TO DO AND, IN FACT, EVEN IF IT OMITS TO CONSIDER AN ARGUMENT ADVANCED OR A PARTICULAR FACT, THAT WOULD NOT BY IT SELF BESTOW UPON THE TRIBUNAL THE JURISDICTION TO RE-APPRAISE OR RE-CONSIDER THE SAME . RELIANCE WAS PLACED BY HER ON A HOST OF CASE LAW (SEE NOTE # 1) . THE TRIBUNAL IN THE INSTANT CASE HAD PASSED A VER Y SPEAKING AND WELL CONSIDERED ORDER, TAKING INTO CONSIDERATIO N THE ENTIRETY OF THE FACTS AS BORNE OUT BY THE MATERIAL ON RECORD. THE SCOPE OF SEC. 254(2 ) IS SEVERELY LIMITED, I.E., TO A PATENT MISTAKE OR A WRONG COMMITTED BY THE TRIBUNAL IN PAS SING AN ORDER. FURTHER, THERE HAS BEEN NO VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE, AND THE DEPARTMENT OBJECTS TO THE COMMENTS BY THE ASSESSEE (PER PARA 4 OF ITS APPLICA TION) THAT NEITHER PARTY HAD BEEN ALLOWED DUE OPPORTUNITY OF BEING HEARD. A RECALL O F ITS ORDER BY THE TRIBUNAL CAN ONLY BE WHERE IT HAS PASSED AN EX PARTE ORDER, THOUGH ON MERITS, WITH THE PARTY BEING NOT REPRESENTED SATISFYING IT AS TO THE GENUINENESS OF THE REASON/S FOR ITS NON-APPEARANCE ON DATE OF HEARING (RULE 24 OF THE INCOME TAX RULES, 1 963 ( THE RULES HEREINAFTER)). THE SAME IS CLEARLY INAPPLICABLE IN THE FACTS AND CIRCU MSTANCES OF THE PRESENT CASE. 2.3 THE LD. AR, IN REJOINDER, WOULD SUBMIT THAT HIS PETITION OR PRAYER MAY NOT BE CONSIDERED AS AN APPLICATION U/S. 254(2), BUT ONE S EEKING INVOCATION BY THE TRIBUNAL OF ITS INHERENT POWER TO ADDRESS A WRONG CAUSED BY IT. M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 4 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD, AS WELL AS THE CASE LAW CITED. 3.1 THE FIRST THING THAT NEEDS TO BE ADDRESSED, I.E., BEFORE WE COULD GO INTO THE MERITS OF THE PRESENT APPLICATION BY THE ASSESSEE, IS THE SCO PE OF THE POWERS AVAILABLE TO THE TRIBUNAL FOR RECALLING ITS ORDER. THE CIRCUMSTANCES LEADING TO ITS EXERCISE ARE SPECIFIED IN RULE 24 OF THE RULES, WHICH READS AS UNDER:- HEARING OF APPEAL EX PARTE FOR DEFAULT BY THE APPEL LANT . 24. WHERE, ON THE DAY FIXED FOR HEARING OR ON ANY O THER DATE TO WHICH THE HEARING MAY BE ADJOURNED, THE APPELLANT DOES NOT APPEAR IN PERSON OR THROUGH AN AUTHORISED REPRESENTATIVE WHEN THE APPEAL IS CALLE D ON FOR HEARING, THE TRIBUNAL MAY DISPOSE OF THE APPEAL ON MERITS AFTER HEARING THE RESPONDENT: PROVIDED THAT WHERE AN APPEAL HAS BEEN DISPOSED OF AS PROVID ED ABOVE AND THE APPELLANT APPEARS AFTERWARDS AND SATISFIES THE TRI BUNAL THAT THERE WAS SUFFICIENT CAUSE FOR HIS NON-APPEARANCE, WHEN THE APPEAL WAS CALLED ON FOR HEARING, THE TRIBUNAL SHALL MAKE AN ORDER SETTING ASIDE THE EX PARTE ORDER AND RESTORING THE APPEAL. THE SAID RULE IS CLEARLY INAPPLICABLE, WITH THE TR IBUNAL HAVING PASSED AN ORDER AFTER HEARING BOTH THE SIDES. THERE IS NO OTHER PROVISION IN LAW, AS WAS SOUGHT TO BE EMPHASISED BY THE LD. DR DURING HEARING, WHEREBY THE TRIBUNAL COULD RECALL ITS ORDER. AN EXERCISE OF POWER CANNOT BE IN VACCUM BUT HAS TO BE ON SOME LEG AL BASIS. THE RECALL OF ITS ORDER WOULD MEAN PASSING A FRESH ORDER BY RE-HEARING AND RE-ADJUDICATION OF THE ENTIRE SUBJECT MATTER OF THE APPEAL. THE DISPUTE NO LONGER REMAINS RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED BUT LEADS TO AN EFFACEMENT OF THE EARLIER ORDER U/S. 254(1). THE SAME, THUS, IS CLEARLY IMPERMISSIBLE UNDER SECTION 254(2) OF THE ACT, AS EXPLAINED BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. ITAT (1992) 196 ITR 683 (ORISSA). AN ORDER U/S. 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER U/S. 254(1), SO THAT IT (RECALL) IS IMPE RMISSIBLE U/S. 254(2) (ALSO REFER: KARAN & CO. V. ITAT , 253 ITR 131 (DEL.)). THE HONBLE COURT GOES ON TO NOTE THE POWER TO RECALL AVAILABLE UNDER RULE 24 OF THE RULES, OBSERVING THAT UNDER THE CIRCUMSTANCES AS STIPULATED THEREIN, OR THE LIKE, I .E., WHEREBY AN ORDER IS RENDERED ELICIT, COULD ONLY A REHEARING BE DIRECTED. THE PREMISES O F THE SAME, IT MAY BE NOTED, IS THE SAME AS THAT BROUGHT FORTH BY THE HONBLE COURT IN THE CASE OF S. B. SINGAR SINGH AND SONS M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 5 (SUPRA), I.E., THAT NO COURT OR TRIBUNAL CAN BY IT S OWN WRONG CAUSE PREJUDICE TO ANY PARTY BEFORE IT, WHICH IN FACT REPRESENTS A LEGAL MAXIM. WE FIND ECHO OF THE SAME PRINCIPLE IN THE DECISION BY THE APEX COURT IN THE CASE OF HONDA SEIL POWER PRODUCTS LTD. VS. CIT (2007) 295 ITR 466 (SC). THE PROPOSITION AND/OR TH E CIRCUMSCRIPTION TO THE EXERCISE OF THE POWER (OF RECALL), IT WOULD BE APPARENT, IS CAS T IN TERMS MORE STRICT THAN RULE 24, ALSO FALLING U/S. 254(2), WHERE-UNDER AN ORDER MAY BE RE CALLED EVEN FOR NO WRONG CAUSED BY THE TRIBUNAL/COURT. CLEARLY, THE WRONG MENTIONED HEREIN MUST BE ONE WHICH IS OBVIOUS AND PATENT, NOT ONE WHICH IS ITSELF SUBJECT TO DEBA TE. THE INVOCATION OR EXERCISE OF POWER HINGES ON TWO KEY WORDS WRONG AND PREJUDICE, AN D WHERE THE TWO ARE THEMSELVES INDETERMINATE OR CONSTITUTE THE BONE OF CONTENTION, A PLEA FOR RECALL CANNOT SUCCEED. 3.2 WE MAY PROCEED TO EXAMINE THE ASSESSEES CASE W ITH REFERENCE TO, AND IN THE BACKGROUND OF THIS UNDERSTANDING OF THE SCOPE OF PO WER TO RECALL, DERIVED ON THE BASIS OF ITS ELUCIDATION BY THE HIGHER COURTS OF LAW. IN TH IS REGARD, THE FIRST WRONG PLEADED BY THE ASSESSEE IS THAT THE HEARING DID NOT FOLLOW A FAIR PROCEDURE. WE ARE UNABLE TO SEE HOW. WOULD THE SAME HEARING, ONE MAY ASK, BE CONSIDERED AS SO, IF IT HAD RESULTED IN AN ORDER PASSING A VERDICT FAVOURABLE TO THE ASSESSEE, I.E., THE TRIBUNAL ACCEPTED ITS CASE ON MERITS? IT IS QUIZZICAL THAT THE SAME HEARING, IN THE PRESE NCE OF BOTH THE PARTIES THERETO, IS DEEMED PREJUDICIAL (TO IT) BY ONE PARTY AND NOT THE OTHER. THE TRIBUNAL DID NOT, AND POSSIBLY CANNOT; THE HEARING BEING CONDUCTED IN AN OPEN, TRA NSPARENT MANNER, STOP ANY PARTY FROM ADVANCING ANY ARGUMENT OR RAISING ANY CLAIM, I.E., QUA THE APPEAL BEING HEARD. FURTHER, IN VIEW OF THE TIME ELAPSED, IT ONLY DEEMED FIT, I.E., TO MAINTAIN THE FAIRNESS OF PROCEDURE, TO AFFORD OPPORTUNITY TO THE PARTIES TO, IF SO DESIRED , (RE)STATE THEIR RESPECTIVE CASES BEFORE IT. THIS BY ITSELF CLEARLY INDICATES THAT THE TRIBUNAL VIEWS THE DELAY, WHICH OCCASIONALLY MAY ATTEND ITS ORDER (FOR A VARIETY OF REASONS), NOT AL WAYS WITHIN ITS CONTROL, AS NOT DESIRABLE, SO THAT, WHERE CAUSED, THE PARTIES MAY BE ALLOWED A N OPPORTUNITY OF HEARING. AS SUCH, TO TURN AROUND AND SAY THAT IT WAS NOT AFFORDED AN ADE QUATE OPPORTUNITY OF HEARING IS NEITHER PROPER NOR A CORRECT STATEMENT OF FACT. FURTHER, IT IS NOT A CASE WHERE ANY LENGTHY ARGUMENTS WERE MADE; THE LD. AR, BY HIS OWN ADMISSI ON, HAVING RELIED ON THE ORDER OF THE FIRST APPELLATE AUTHORITY AND THE ASSESSEES PA PER-BOOK (PB), AND WHICH STANDS M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 6 FAITHFULLY RECORDED AT PARA 3 OF THE TRIBUNALS ORD ER. IT IS NOT EVEN A CASE WHERE A PARTICULAR ARGUMENT OR FACT HAS BEEN OMITTED TO BE CONSIDERED BY THE TRIBUNAL, EVEN AS THE HIGHER COURTS OF LAW HAVE HELD THE SAME, UNLESS IT GOES TO THE ROOT OF THE MATTER, AS NOT ENTITLING FOR A RECTIFICATION AND/OR A RECALL. WE, THEREFORE , DO NOT CONSIDER THE SAME AS CONSTITUTING A `WRONG, GIVING RISE TO A RECALL. 3.3 THE ASSESSEES SECOND PLEA IS WITH REGARD TO THE RELIANCE BY THE TRIBUNAL ON CASE LAW NOT RELIED UPON OR CITED BEFORE IT BY EITHER PA RTY. WE FIND THE CHARGE AS WHOLLY INAPPOSITE AND INACCURATE. NO CASE LAW STANDS APPLI ED AT THE ASSESSEES BACK. IT WOULD BE RATHER WHOLLY INCORRECT TO CONSTRUE THE ESTABLISHED CASE LAW, SETTLING THE LAW IN THE MATTER, AS BEING EITHER FOR OR AGAINST THE ASSESSEE; THE LA W BEING PARTY-NEUTRAL, EVEN THOUGH IN THE FACTS AND CIRCUMSTANCES OF A GIVEN CASE, THE DECISI ON RENDERED MAY BE EITHER IN FAVOUR OF OR EVEN AGAINST THE REVENUE. BUT THAT IS WHOLLY IRR ELEVANT AND BESIDES THE POINT, WITH WHAT BEING RELEVANT AND APPLICABLE IS THE RATIO OF THE DECISION OR THE EXPOSITION OF LAW AS MADE THEREIN. IN THE PRESENT CASE, THE REVENUE HAD INVOKED SEC. 69A OF THE ACT. A SUBSTANTIAL PART OF THE ASSESSEES CASE WAS THAT HE BEING ONLY AN EMPLOYEE OF PGPL, WHOSE GOODS HE WAS CARRYING, NO ADDITION IN ITS RES PECT, I.E., EVEN ASSUMING THE SAME AS NOT SUITABLY EXPLAINED, COULD BE MADE IN HIS HANDS, SO THAT THE ASSESSMENT, IF AT ALL, COULD BE MADE ONLY IN THE HANDS OF HIS EMPLOYER, PGPL. IT WAS THUS INCUMBENT ON THE TRIBUNAL TO DECIDE THIS ISSUE BEFORE PROCEEDING TO EXAMINE T HE ISSUE ON MERITS, I.E., THE SATISFACTORY OR OTHERWISE NATURE OF THE ASSESSEES EXPLANATION W ITH REGARD TO THE NATURE AND SOURCE OF THE REQUISITIONED GOODS. NO ASSISTANCE TO THE TRIBU NAL TOWARD THE SAME HAVING BEEN EXTENDED BY THE PARTIES, WITH THE LD. CIT(A) ALSO H AVING NOT ISSUED ANY DEFINITE FINDINGS QUA THIS ASPECT OF THE MATTER, IT EXAMINED THE RELEVAN T PROVISIONS OF LAW, AS WELL AS THE SETTLED LAW IN THE MATTER (REFER PARA 4.1 & 4.2 OF THE IMPUGNED ORDER ), TO HOLD THAT THE ASSESSEES STATUS AS AN EMPLOYEE COULD ONLY FORM A PART OF HIS EXPLANATION AND BY ITSELF CANNOT BE CONSIDERED AS TAKING THE CASE AS OUTSIDE THE PURVIEW OF SECTION 69A OF THE ACT, SO THAT THE ASSESSEE (WHERE CONFIRMED AS AN EMPLOYE E) COULD NOT BE CONSIDERED AS BEING NOT OBLIGED TO ESTABLISH OR SATISFACTORILY EXPLAIN THE SAME, I.E., IN TERMS OF THE SECTION, SUBSTANTIATING HIS CASE, WHERE-EVER REQUIRED, WITH MATERIALS. THE ISSUE THUS WAS HELD AS M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 7 WHOLLY FACTUAL (REFER PARA 4.3 ). OF COURSE, WHERE THE IMPUGNED GOODS ARE EXHIBITE D AS CONSTITUTING THE STOCK-IN-TRADE OF HIS (ASSSESSEE-P OSSESSORS) EMPLOYER, OR THE EMPLOYER ADMITS OF THE SAME AS REPRESENTING HIS UNACCOUNTED STOCK, SO THAT ITS OWNERSHIP IS ESTABLISHED, NO FURTHER OBLIGATION IN THE MATTER LA Y ON HIM (ASSESSEE); THE SAID GOODS HAVING BEEN SATISFACTORILY EXPLAINED BY HIM AS TO T HEIR NATURE AND SOURCE (ALSO REFER PARA 4.7 ). THE REFERENCE TO THE CASE LAW WAS THUS ONLY FOR ALLUDING TO THE PRINCIPLES OF LAW GOVERNING THE ISSUE UNDER REFERENCE. THE TRIBUNAL, IN APPLYING THE LAW, IS IN FACT DUTY BOUND TO DO SO AND, ACCORDINGLY, RIGHTLY AND RIGHTF ULLY DID SO. WOULD IT, ON THE CONTRARY, IT MAY BE ASKED, BE PROPER ON ITS PART TO ALLUDE TO THE SAME WITHOUT DRAWING ON THE SETTLED CASE LAW IN THE MATTER; THE CASE LAW BEING BY THE A PEX COURT AND THE HONBLE JURISDICTIONAL HIGH COURT, BOTH OF WHICH ARE RATHER MANDATORY IN T HEIR APPLICATION, SO THAT REFERENCE TO THE SAME, APART FROM BEING APPOSITE, WAS INCUMBENT ON IT. THE ASSESSEES CHARGE FAILS. 3.4 THE ASSESSEES NEXT PLEA IS THAT THE DIFFERE NT QUERIES, IF POSED TO HIM, COULD BE SUITABLY ANSWERED OR MET, SO THAT HE STANDS PREJUDI CED THEREBY, I.E., NON-POSER OF THE QUERIES DEEMED RELEVANT BY THE TRIBUNAL IN DECIDING THE ISSUE UNDER APPEAL. THE SAME (QUERIES), WE MAY FIRSTLY CLARIFY, COULD FIND A PLA CE IN ITS ORDER, EVEN IF PASSED BY THE TRIBUNAL EARLIER, SO THAT THE TWO ASPECTS ARE INDEP ENDENT OF EACH OTHER. HERE, AGAIN, THE LD. AR HAS NOT POINTED OUT ANY QUERY THAT IS EITHER NOT RELEVANT OR STANDS ADEQUATELY MET BY THE MATERIAL/S ON RECORD. THE LD. AR WOULD CLAIM (B EFORE US) THAT HE COULD ANSWER EACH AND EVERY QUERY. HOWEVER, THE RELEVANT QUESTION IN THIS REGARD, TO OUR MIND, IS NOT IF HE COULD DO SO OR NOT, WHICH WOULD FURTHER BE A SUBJEC T MATTER OF DEBATE AND SPECULATION, BUT WHETHER, FIRSTLY, IT IS RELEVANT AND, SECONDLY, IF IT COULD BE ANSWERED WITH REFERENCE TO THE MATERIAL ON RECORD. THIS IS AS IT IS ONLY AN ANSWER ARISING OUT OF OR BORNE BY AND CONSISTENT WITH THE MATERIAL ON RECORD WHICH IS REL EVANT AND, THUS, COULD FIND ACCEPTANCE BY THE TRIBUNAL. THE ASSESSEE HAS NOT POINTED OUT ANY SUCH . IN FACT, THE QUERIES THEMSELVES ARISE ONLY OUT OF THE MATERIAL ON RECORD. IN THE C ASE OF ROSHAN DI HATTI V. CIT (1977) 107 ITR 938 (SC), THE APEX COURT DISAPPROVED THE ADVERS E INFERENCE DRAWN BY THE TRIBUNAL ON THE BASIS OF THE ANSWERS BY THE APPELLANTS COUNSEL TO THE QUESTIONS POSED BY THE MEMBERS CONSTITUTING THE BENCH DURING HEARING, STAT ING THAT FOR ANY EVIDENCE TO BE RELIED M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 8 UPON, IT HAS TO BE TAKEN ON RECORD, OBSERVING THE P RESCRIBED PROCEDURE. THE TRIBUNAL IN THE INSTANT CASE HAS GONE BY THE MATERIAL ON RECORD. FU RTHER, THE ASSESSEE, IN THIS REGARD, STATES THAT ITS GROUND NOS. 7 TO 11 BEFORE THE FIRST APPEL LATE AUTHORITY (FORMING PART OF THE RECORD) CONTAINS ANSWERS TO SOME OF THE QUESTIONS/Q UERIES RAISED BY THE TRIBUNAL. WE ARE UNABLE TO SEE HOW, AS THE GROUNDS THEMSELVES RAISE ISSUES BY WHICH THE ASSESSEE HIMSELF IS AGITATED! FURTHER, THE SAME STAND NOT ANSWERED BY THE LD. CIT(A) VIDE HIS ORDER, AND WHICH IS WHAT PROMPTED US TO ASK IF THE ASSESSEE WO ULD BE AGGRIEVED BY A FAVOURABLE ORDER, AS THAT BY THE LD. CIT(A), APPEALED AGAINST BY THE REVENUE. IN FACT, TWO OF THE SAID GROUNDS (I.E., GROUND NOS. 8 & 11) PLEAD NON-GRANT OF OPPORTUNITY BY THE ASSESSING OFFICER. IF ANYTHING, THE SAME ONLY GOES TO SHOW TH AT THE QUERIES ARE RELEVANT, ARISING OUT OF EXPLANATION/S OFFERED OR THE MATERIALS LED IN SU PPORT AND, FURTHER, IT IS FOR THIS REASON THAT THE LD. AR WAS SPECIFICALLY QUESTIONED BY THE BENCH DURING THE HEARING IF THE SAID QUERIES IN ANY MANNER ENLARGED THE SCOPE OF THE CON TROVERSY, I.E., AS BEFORE THE ASSESSING AUTHORITY, TO NO REBUTTAL BY HIM. EVEN AS SOUGHT T O BE EXPLAINED DURING THE HEARING ITSELF, THE REVENUES LONE GROUND EFFECTIVELY CAPTURES THE CONTROVERSY UNDER REFERENCE, AND THE QUERIES RAISED ARE ONLY A MANNER OF WRITING THE ORD ER; THE SAME POINTING OUT TO THE VARIOUS GAPS AND/OR DEFICIENCIES IN THE ASSESSEES EXPLANAT ION, THE REASONABILITY OR OTHERWISE OF WHICH IS IN ISSUE. THE ISSUE BEFORE THE TRIBUNAL IS THE VALIDITY IN LAW OF THE NON- SATISFACTION OF THE ASSESSING AUTHORITY (WITH THE S AID EXPLANATION), WHICH THE FIRST APPELLATE AUTHORITY FOUND AS NOT SO, SO THAT THIS I S WHAT IT (THE TRIBUNAL) AS AN APPELLATE AND FINAL FACT FINDING AUTHORITY WAS CALLED UPON TO CON SIDER AND ADJUDICATE ON, AND WHICH WOULD ALSO INCLUDE THE REASONS CITED BY THE FIRST A PPELLATE AUTHORITY, EITHER IN SUPPORT OR AGAINST. 3.5 AT THIS STAGE, WE CONSIDER IT PROPER TO, SO AS TO EXHIBIT THE IMPORT AND PURPORT OF WHAT IS BEING SAID, ADVERT TO ONE SUCH QUERY (SAY), AS RAISED IN GROUND NO. 7 (BEFORE THE LD. CIT(A)), WHICH READS AS:- ` 7. THE APPELLANT DENIES THE ASSESSING OFFICERS ST ATEMENT THAT WHILE CARRYING THE JEWELLERY HE HAD NO DOCUMENTS OR PROPER EXPLANATION OF THE SAME, WHEN THE FACT IS THAT HE WAS CARRYING THE APPROVAL/DELIVERY CHALLAN DATED 20/7/2006 FOR 22 CT. GOLD M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 9 ORNAMENTS (ON APPROVAL NOT FOR SALE) GROSS WEIGHT 6 572.620 GRAMS ISSUED BY THE COCHIN BRANCH OF THE COMPANY . THE QUERY IN THIS REGARD IS POSED AT PARA 4 .6 OF THE IMPUGNED ORDER. THE QUESTION HAS NOT BEEN ANSWERED BY THE LD. CIT(A), SO THAT THERE IS NO SPECIFIC FINDING/S BY HIM IN THE MATTER. TWO, THE NON-CARRYING OF DOCUMENT IS ITSELF ADMITTED TO AND, FURTHER, EXPLAINED BY THE ASSESSEE IN ANSWER TO QUESTION NO. 2 (PB PG. 3) . THE MATTER STANDS COMPREHENSIVELY ANALYSED BY THE TRIBUNAL, I.E., IN ALL ITS FACETS, NOTING SEVERAL INFIRMITIES/GAPS (VIZ. THE DIFFERENCE IN THE QUANTITY AND DATES; THE INCONSIST ENCY VIS-A-VIS THE ASSESSEES STATEMENT, INCLUDING WITH REGARD TO THE SOURCE OF THE GOLD ORN AMENTS; THE STATEMENT OF THE DIRECTOR, SH. ABHILASH K. JAIN; THE RECORDS AT THE LOCAL BRAN CH OFFICE AS ALSO THEIR STATE OF MAINTENANCE; THE ABSENCE OF ANY ORDER-BOOK, ETC.). 3.6 THE ASSESSSEE HAS CITED ANOTHER EXAMPLE FRO M THE ORDER TO HIGHLIGHT OF THE APPEAL HAVING BEEN DECIDED WITHOUT ALLOWING IT PROPER OPPO RTUNITY TO EXPLAIN ITS STAND, LEADING TO ITS CAUSE BEING PREJUDICED. AND WHICH WE MAY REF ER TO, IF ONLY FOR THE SAKE OF COMPLETENESS OF THIS ORDER. THE RELEVANT OBSERVATIO NS BY THE TRIBUNAL, AND THE ASSESSEES CHARGE IN ITS RESPECT, LISTED PER PARA 7 OF ITS WRI TTEN SUBMISSIONS, IS REPRODUCED AS UNDER: `7. IN PARA 4.10 AT PAGE 19 OF THE ORDER THE HONBLE T RIBUNAL HAS OBSERVED: (THIRDLY) WE FIND THAT THE ASSESSEE H AS PAID TAX AT 24 LAKHS ON 2.2.2008, I.E., EVEN PRIOR TO THE COMPLETION OF ASSESSMENT ON 26.3 .2008. THE CONTENTION OF THE ASSESSEE BEING A MAN OF NO MEANS, THUS STANDS DISP ROVED. IT IS SUBMITTED THAT THE PAYMENT OF ` 24 LAKHS WAS MADE IN COMPLIANCE WITH THE ORDER OF THE HONBLE KERALA HIGH COURT VIDE JUDG MENT DATED 25.1.2008 IN WRIT APPEAL NO. 168 OF 2007. THE PAYMENT WAS MADE BY P RAKASH GOLD PALACE PVT.LTD., THE PETITIONERS EMPLOYER, BY AT PAR CHE QUE NO. 244703 DATED 1.2.2008 DRAWN ON UTI BANK (NOW AXIS BANK), PURASWALKAM BRA NCH, CHENNAI-600 007 INTO STATE BANK OF INDIA, MG ROAD, ERNAKULAM. IT IS CLEAR THAT THE HONBLE TRIBUNAL HAS MADE THE AFORESAID INCORRECT OBSERVAT ION WITHOUT ASCERTAINING THE FACTS REGARDING THE PAYMENT OF THE SUM OF ` 24 LAKHS IN QUESTION. M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 10 THAT IS, THE INFERENCE OF THE ASSESSEE AS BEING NOT A MAN WITHOUT MEANS IS CONTESTED ON THE BASIS OF THE FACTUM OF PAYMENT BEING NOT BY HIM BUT ONLY BY HIS EMPLOYER, PGPL. THE CHARGE IS UNTENABLE. FIRSTLY, THE ISSUE, A MATT ER OF FACT, AS WOULD BE APPARENT FROM A MERE BROWSE OF THE ORDER, HAS NOT BEEN DECIDED IN T HE LEAST ON THAT BASIS. THE TRIBUNAL AFTER EXAMINING THE ASSESSEES CONTENTION OF BEING AN EMPLOYEE OF PGPL, WHICH IT CONSIDERS AS THE FIRST LIMB OF HIS EXPLANATION, ADM ITS TO THE SAME, AND PROCEEDS ON THE BASIS OF HIS STATUS AS BEING OF AN EMPLOYEE OF PGPL (REFER PARA 4.5 ). AS SUCH, THE IMPLICATION OF THE ASSESSEES CONTENTION, I.E., OF THE TRIBUNAL HAVING DECIDED ON THE BASIS OF A WRONG FACT IS INCORRECT. FURTHER, THE CITED OB SERVATION HAS BEEN MADE BY IT (TRIBUNAL) ONLY IN THE CONTEXT OF ITS CONSIDERATION FOR APPLIC ABILITY, IF SO, OF THE DECISION IN THE CASE OF CIT V. NOORJAHAN (P.K.) (1999) 237 ITR 570 (SC), NOT CITED BY THE ASSESSEE , AND WAS CONSIDERED SUO MOTU BY IT. IF, GOING BY THE ASSESSEES CONTENTION THAT NO REFERENCE TO NON CITED CASE LAW COULD BE MADE IN APPLYING THE LAW BY THE TRIBUNAL, I.E., ON ITS OWN, HE IS PRECLUDED FROM RAISING THIS PLEA. SECONDLY, THE CAP TIONED OBSERVATION BY THE TRIBUNAL IS MADE AND, ACCORDINGLY, IS TO BE CONSIDERED IN THE C ONTEXT OF THE APPLICABILITY OR OTHERWISE OF THE SAID DECISION. IN OTHER WORDS, THE PAYMENT M AY WELL HAVE BEEN MADE BY THE ASSESSEES EMPLOYER. BUT THE MERE FACT OF PAYMENT O F THE ENTIRE TAX, IN ITS VIEW, ALONG WITH TWO OTHERS, WAS CONSIDERED BY IT AS SUFFICIENT FOR THE INAPPLICABILITY OF THE SAID DECISION BY THE APEX COURT, I.E., ON FACTS. AND, WH ICH IS AGAIN, IN ANY CASE, A DECISION ON MERITS. HERE IT MAY BE RELEVANT TO ADD THAT PER PAR A 4.7 OF ITS ORDER THE TRIBUNAL HAS INDEPENDENTLY EXAMINED THE EXHIBITION/ESTABLISHMENT OF THE IMPUGNED JEWELLERY AS FORMING PART OF THE EMPLOYERS STOCK-IN-TRADE, CLEA RLY STATING THAT IN THAT CASE; THE ASSESSEES STATUS AS AN EMPLOYEE BEING CONFIRMED, N O FURTHER OBLIGATION IN THE MATTER LAY ON HIM. THE CLAIM/S BEING RAISED BY THE ASSESSEE, T HEREFORE, WITH REFERENCE TO THE CAPTIONED OBSERVATION BY THE TRIBUNAL, ARE INCORREC T AND MISCONCEIVED. LIKEWISE, QUA THE CLAIM AS REGARDS THE ASSESSMENT OF THE IMPUGNED GOO DS AS THE CONCEALED TURNOVER UNDER SALES-TAX LAW. M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 11 3.7 FINALLY, WITH REGARD TO THE IMPUGNED ORDER BEING PRINCIPALLY A POST HEARING EXERCISE BY THE TRIBUNAL. WE WONDER HOW IT COULD BE OTHERWIS E, PARTICULARLY WHERE THE ISSUE INVOLVED IS ESSENTIALLY ONE OF FACT, ENTAILING CONS IDERATION OF A VARIETY OF EVIDENCES ADDUCED IN SUPPORT, ONLY WHEREUPON COULD PROPER AND COGENT FINDINGS OF (RELEVANT) FACTS, BASED ON THE APPRECIATION OF THE EVIDENCE BEING REL IED UPON, BE ISSUED, OR COULD BE SAID TO HAVE BEEN SO, AND WHICH WOULD ALSO INCLUDE STATEMEN T OF THE REASONS UNDERLYING THE SAME. ALL THE LEGAL AND FACTUAL ARGUMENTS ADVANCED BY THE ASSESSEE IN SUPPORT OF HIS CASE, INCLUDING THE CASE LAW AND THE MATERIALS RELIED UPO N, IS NECESSARILY TO BE CONSIDERED, STATING CLEARLY THE REASONS FOR ITS ACCEPTANCE OR O THERWISE, AND ONLY WHEREUPON, A SPEAKING ORDER COULD BE SAID TO HAVE BEEN PASSED. A LL THIS NECESSARILY INVOLVES PATIENCE AND LABOUR, MENTAL AND PHYSICAL, AS THE PERTINENT I SSUE/S HAVE TO BE DELINEATED, FORMULATED, AND ADJUDICATED, AND THEN, PRESENTED IN A COHERENT, SYSTEMATIC MANNER, STATING CLEARLY THE DEFINITE REASONS IMPELLING ITS DECISION . BESIDES A NON-UNDERSTANDING AS TO ITS IMPORT, EVEN TO SUGGEST THAT ALL THIS COULD BE POSS IBLY DONE DURING HEARING IS LUDICROUS. THIS WOULD BE AKIN TO SAYING THAT THE ADVOCATE HAS PREPARED HIS CASE IN HIS CHAMBER SUBSEQUENT TO BEING BRIEFED ABOUT THE CASE BY HIS C LIENT. 4. IN VIEW OF THE FOREGOING, WE DO NOT FIND ANY REASON FOR ACCEDING TO THE ASSESSEES PRAYER PER ITS INSTANT APPLICATION FOR A RECALL OF THE IMPUGNED ORDER. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES MISCELLANEOUS AP PLICATION IS DISMISSED. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 25TH NOVEMBER, 2011 GJ COPY TO: 1. SHRI KARUN DUTT SINGH ALIAS RINKU SINGH, C/O PRA KASH GOLD PALACE P. LTD., 144, PURASAWALKAM HIGH ROAD, KELLYS, CHENNAI-600 010 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-1, ERNAKULAM. M.P. NO.21/COCH/2011 KARUN DUTT SINGH V. ASSTT. CIT, ERNAKULAM 12 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . NOTE: 1.1 CIT (ASSTT.) V. SAURASHTRA STOCK EXCHANGE LTD . (2008) ITR 227 (SC); ITO V. ITAT , 229 ITR 651 (PATNA); CIT V. RAMESH ELECTRICAL & TRADING CO ., 203 ITR 497 (BOM); HOMI MEHTA & SONS (P.) LTD. V. CIT , 63 ITD 15 (MUM); DHARAM CHAND SURANA V. ITO , 61 ITD 115 (CHENNAI). 1.2 T.S. BALRAM, ITO V. VOLKART BROS . (1971) 82 ITR 50 (SC); CIT V. RAM LAL BABU LAL , 234 ITR 776 (P&H); CIT V. SUNIL KUMAR , 212 ITR 238 (RAJ.).