COMMISSIONER OF INCOME TAX Vs. BHARATKUMAR MODI

JUDGEMENT

(1.) SINCE the above appeals raise common question of law and fact, they are disposed of together by this common judgment.

(2.) THE short question which arises for determination in this appeal is as follows:

(3.) IN appeal No. 127 of 2000, the assessee filed return of income for asst. year 1993 -94. The total income included agricultural income of Rs. 64,90,951 which was taken for aggregation for rate purpose. The return of income declared total income of Rs. 3,63,400. During the asst. yrs. 1991 -92 and 1992 -93 investigations were carried out. The farmers and Tahsildar were examined to ascertain genuineness of the nature of income. The finding for both the asst. yrs. 1991 -92 and 1992 -93, as given by the AO, was that the assessees had laundered concealed income by showing such income as agricultural income. During the course of assessment proceedings, the assessees filed an affidavit from farmers confirming that lands were leased to them. The assessees also relied upon certificates from Tahsildar. The AO had certain material in his possession which was not shown to the assessees. The AO declared Rs. 64,90,951 as income from undisclosed sources. Being aggrieved, the assessees carried the matter in appeal to CIT(A) who came to the conclusion that the AO ought to have given an opportunity to the assessees to explain the material gathered by the AO against the assessees. The first appellate authority came to the conclusion that the AO had rejected, wrongly, the assessees' claim of income from agriculture without examining all the evidence and without confronting the assessees with all the material used against them. In the circumstances, the CIT(A) set aside the assessment order and restored the matter back to the file of the AO with a direction to make enquiries. Being aggrieved by the order of the first appellate authority, the assessees carried the matter in appeal to the Tribunal. Before the Tribunal, the assessees contended that there was violation of the rules of natural justice. That, no enquiry was held by the AO. That, no opportunity was given to the assessees to rebut the evidence of material gathered by the AO. Therefore, it was contended that the entire assessments be declared null and void and not merely set aside the order of AO. In other words, the assessees contended that the proceedings be annulled in their entirety for violation of rules of natural justice. In support of their contention, they relied upon the orders of the Tribunal for the earlier years viz. asst. yrs. 1991 -92 and 1992 -93 where, for similar defects, the assessees' prayer for annulment of the assessments came to be accepted. The contention of the assessees was accepted by the Tribunal. Accordingly, the order of CIT(A) remitting the matter back to the AO was set aside by the Tribunal. The Tribunal further declared annulment of the assessments following its earlier judgments. Hence, this appeal is filed under S. 260A of the IT Act.