No Interference with findings of facts unless relevant evidence not considered or finding arrived by ITAT placing reliance on inadmissible evidence-Allahabad High Court
ABCAUS Case Law Citation:
ABCAUS 1137 (2017) (02) HC
Assessment Year : 2009-10
Date/Month of Pronouncement: February, 2017
Brief Facts of the Case:
The appeal was admitted by the Lucknow Bench of the Hon’ble Allahabad High Court on following substantial questions of law:
(a) The Hon’ble ITAT has erred in law and on facts by restoring the turnover of Rs. 1,84,32,508/- purportedly recorded in the books of assessee instead of turnover of Rs. 30 crores estimated by AO despite the fact that the true and full extent of sales was not reflected in the audited books of accounts and the documents and was thus not fully disclosed.
(b) The Hon’ble ITAT has erred in law and on facts confirming the order of the Ld. CIT(A) who quantified the relief as of Rs. 70,70,800/- without appreciating the fact that in this process the addition of Rs. 31,611/- made on account of income from other sources, which was not contested by the assessee in appeal before the Ld. CIT(A), also got deleted.
(c) The Hon’ble Tribunal did not give any finding for accepting the total turnover of Rs. 1,84,32,508/- as declared by the assessee and thereby upholding the relief of Rs. 70,70,610/- relying solely on the order of the Ld. CIT(A) without appreciating the fact that the action of the AO in rejecting the books of the assessee has been confirming by the CIT(A) and during the assessment proceedings the assessee did not furnish the copies of the 6R forms giving details of the Mandi Tax paid amounting to Rs. 4,26,600/- or any evidence in order to verify the purchase of wheat during the year.”
However, the Revenue could not dispute that questions formulated in the appeal could not be said to be substantial questions of law since issues raised therein were pure questions of fact on which finding of fact has been recorded by Courts below and in absence of anything to show that same was perverse, it could not be said that any substantial questions of law had arisen in this appeal.
Observations made by the High Court:
The Hon’ble Court observed that there are two situations in which, ordinarily, interference with findings of fact is permissible, namely,
(a) when material or relevant evidence is not considered, which if considered, would have led to opposite conclusion, and
(b) where a finding has been arrived at by court below by placing reliance on inadmissible evidence, which if would have been omitted, an opposite conclusion would have been possible.
In this regard, the Hon’ble Court referred to the various judgments of the Apex Court and/or High Courts as under:
| Dilbagrai Punjabi Vs. Sharad Chandra, AIR 1988 SC 1858 | The Court affirmed the observations of High Court that First Appellate Court is under a duty to examine entire relevant evidence on record and if it refuses to consider important evidence having direct bearing on the disputed issue, and the error which arises is of magnitude that it gives birth to a substantial question of law, the High Court would be entitled to set aside the finding |
| Jagdish Singh Vs. Nathu Singh, AIR 1992 SC 1604 | It was said where finding by court of facts is vitiated by non consideration of relevant evidence or by an essentially erroneous approach to the matter, the High Court is not precluded from recording proper finding |
| Sri Chand Gupta Vs. Gulzar Singh, AIR 1992 SC 123 | The Court upheld interference by High Court in second appeal where the Lower Appellate Court relied an admission of third party treating it as binding on the defendant though it was inadmissible against the said defendant |
| Sundra Naicka Vadiyar Vs. Ramaswami Ayyar, AIR 1994 SC 532 | The Court said where certain vital documents for deciding the question of possession were ignored, such as compromise, an order of revenue Court relying on oral evidence was unjustified. |
| Ishwar Dass Jain (Dead) through Lrs. Vs. Sohan Lal (Dead) through Lrs., 2000(1) SCC 434 | It was held that there are two situations in which inference with findings of fact is permissible:
(a) The first one is when material or relevant evidence is not considered which, if considered would have led to an opposite conclusion. . . . .” |
| Govindaraju Vs. Mariamman, 2005(2) SCC 500 | The Court said that existence of substantial question of law is the sine qua non for exercise of jurisdiction under Section 100 of the Code. If a second appeal is entertained under Section 100 without framing substantial questions of law then it would be illegal and would amount to failure or abdication of duty cast on the Court. |
| Santosh Hazari Vs. Purushottam Tiwari, 2001(3) SCC 179 | the Court considered what the phrase “substantial question of law” means. It says that the phrase is not defined in the Code. The word “substantial”, as qualifying question of law, means-of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with-technical, of no substances or consequence, or academic merely |
| Rimmalapudi Subba Rao Vs. Noony Veeraju, AIR 1951 Madras 969 | When a question of law is fairly arguable, where there is room for difference of opinion or where the Court thought it necessary to deal with that question at some length and discuss an alternative view, then the question would be a substantial question of law. On the other hand, if the question was practically covered by decision of highest Court or if general principles to be applied in determining the question are well settled and the only question was of applying those principles to the particular fact of case, it could not be a substantial question of law. |
| Sir Chunilal Mehta and Sons Ltd. Vs. The Century Spinning and Manufacturing Company Ltd. AIR 1962 SC 1314 | The observations in Rimmalapudi Subba Rao were affirmed and concurred by the Constitution Bench |
| Union of India Vs. Ibrahim Uddin and another (2012) 8 SCC 148 | There may be exceptional circumstances where the High Court is compelled to interfere, notwithstanding the limitation imposed by the wording of Section 100 CPC. It may be necessary to do so for the reason that after all the purpose of the establishment of Courts of justice is to render justice between the parties, though the High Court is bound to act with circumspection while exercising such jurisdiction. In second appeal the court frames the substantial question of law at the time of admission of the appeal and the Court is required to answer all the said questions unless the appeal is finally decided on one or two of those questions or the court comes to the conclusion that the question(s) framed could not be the substantial question(s) of law. There is no prohibition in law to frame the additional substantial question of law if the need so arises at the time of the final hearing of the appeal. |
Held:
It was held that no substantial question of law had arisen and the appeal was accordingly dismissed.
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