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Commissioner of Income-tax Vs. S.B. Saini Brothers - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Case No. 76 of 1977
Judge
Reported in[1986]161ITR415(P& H)
ActsIncome Tax Act, 1961 - Sections 256(1) and 256(2); Income Tax Rules, 1962 - Rule 6DD
AppellantCommissioner of Income-tax
RespondentS.B. Saini Brothers
Appellant Advocate Ashok Bhan and; A.K. Mittal, Advs.
Respondent Advocate B.S. Gupta, Adv.
Excerpt:
.....the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply communication of a copy of the written order itself, a party who knows about the making of an order cannot ignore the same and allow grass to grow under its feet and do nothing except waiting for a formal communication of the order or to choose a tenuous plea that even though he knew about the order, he was waiting for its formal communication to seek redress against the same in appeal. if a party does not know about the making of..........court cit v. avtar singh & sons . in our opinion, the ratio of this case is not attracted to the facts and circumstances as found by the tribunal in the present case. that was a case in which the appellate assistant commissioner, while deciding the applicability of rule 6dd(j) of the rules, had taken into consideration the reputation of the supplier company and the fact that it did not charge any interest; and had held that the provisions of rule 6dd(j) were applicable to the facts of the case. this decision, in that regard, was upset by the tribunal. the assessee approached this court under section 256(2) of the act and made agrievance of the fact that the tribunal while reaching its conclusion that the provisions of rule 6dd(j) of the rules were not attracted to the facts and.....
Judgment:

D.S. Tewatia, J.

1. The Revenue has approached this court under Section 256(2) of the Income-tax Act, 1961 (for short, 'the Act') for a direction to the Tribunal to refer the following questions formulated in the petition for the opinion of this court:

' (i) Whether, on the facts and in the circumstances of the case, the Tribunal's finding that the payments amounting to Rs. 2,12,109 could not be made by bank drafts is sustainable on the basis of the material placed on record ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that cash payments amounting to Rs. 2,12,109 are covered by Rule 6DD(j) of the Income-tax Rules, 1962?'

2. The Tribunal had dismissed the Revenue's petition under Section 256(1) of the Act on the ground that no question of law arises out of its order dated May 31, 1976. The question that falls for consideration in this case is as to whether a given circumstance established on the record is an exceptional or unavoidable circumstance in terms of Rule 6DD(j) of the Income-tax Rules, 1962 (hereinafter referred to as ' the Rules').

3. Mr. Ashok Bhan, senior advocate, appearing for the Revenue, has contended that the question that falls for consideration is a mixed question of law and fact and sought to sustain his contention from the decision of this court CIT v. Avtar Singh & Sons . In our opinion, the ratio of this case is not attracted to the facts and circumstances as found by the Tribunal in the present case. That was a case in which the Appellate Assistant Commissioner, while deciding the applicability of Rule 6DD(j) of the Rules, had taken into consideration the reputation of the supplier company and the fact that it did not charge any interest; and had held that the provisions of Rule 6DD(j) were applicable to the facts of the case. This decision, in that regard, was upset by the Tribunal. The assessee approached this court under Section 256(2) of the Act and made agrievance of the fact that the Tribunal while reaching its conclusion that the provisions of Rule 6DD(j) of the Rules were not attracted to the facts and circumstances of the case, had ignored the material circumstance which had been taken into consideration by the Appellate Assistant Commissioner, i.e., the reputation of the supplier company and the fact that it did not charge any interest.

4. In the present case, the explanation offered by the assessee is that for effecting purchases, cash payments were made as a large number of cheques issued by the assessee were being dishonoured by the bank and that the sellers insisted upon cash payment. In the certificates that had been filed by the assessee from the sellers, it had been admitted by the sellers that they had insisted upon cash payment. This evidence and the explanation offered by the assessee has been accepted by the Appellate Assistant Commissioner as also by the Tribunal. Whether the circumstances of dishonouring of the cheques and the insistence of the sellers to make payment in cash constituted an exceptional or unavoidable circumstance, in our opinion, is an inference of fact and not of law. In this regard, we are supported by an earlier decision of this court in CIT v. Sawarn Singh Balbir Singh . Similar view has been repeatedly taken by the Allahabad High Court in Addl. CIT v. Friends Straw Board and Paper Mart CIT v. Kohli Khan Bhandar : [1978]111ITR419(All) and CIT v Satish Chandra : [1983]143ITR330(All) .

5. For the reasons aforementioned, we find no merit in this petition and dismiss the same.


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