GANESH TRADING CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two reference applications have been registered on the motion of the assessee under S. 256 (1) of the INCOME TAX ACT, 1961 (for short "the Act"), by the Income -tax Appellate Tribunal, Delhi Bench

(2.) THE dispute relates to the asst. year 1975 -76 and centres round the addition of Rs. 20,000. The said sum was reflected in the books of account of the assessee as cash credit in the name of one Balwant Singh. Income -tax Officer (in short "the ITO") held that the assessee's explanation was unsatisfactory as regards the nature and source of the said sum. Said finding was challenged by the assessee by way of appeal before the Commissioner of Income -tax (Appeal) [in short "the CIT (A)"]. The CIT omitted to deal with the question. An application was filed under S. 154(1)(b) of the Act seeking rectification of the appellate order, dt. 17th March, 1979. The CIT recorded a finding against the assessee. An appeal was preferred before the Tribunal questioning the correctness of the addition maintained by the CIT(A). It is to be noted that since the variation between the income returned and the income assessed was more than Rs. 1 lakh, ITO had referred the matter to the Inspecting Assistant Commissioner (in short "the IAC"). The said authority issued notice to the assessee to explain as to why the addition proposed should not be approved. The assessee took the stand that adequate opportunity was not granted for explaining the cash credit. The IAC examined the record and found that adequate opportunity was granted to the assessee to have his say but the same was not complied with. Additionally, it was observed by the IAC that in a proceeding under S. 144B(4), fresh evidence could not be entertained. The Tribunal upheld the CIT (A)' conclusion that adequate opportunity had been granted to the assessee to explain the cash credit which it could not satisfactorily explain. The Tribunal did not address itself to the question whether in a proceeding under S. 144B(4) there was any fetter on the IAC to admit fresh evidence. On being moved for reference, the question as set out above, has been referred for opinion.