By K. B. Bhujle, Advocate
New Page 1
21 Appeal to Tribunal : Powers of Single
member : S. 255(3) of Income-tax Act, 1961 : A.Y. 1996-97 : Income computed by
AO less than Rs.5 lakhs : CIT(A) enhanced it to more than Rs.5 lakhs : Single
member can decide the appeal.
[CIT v. Mahakuteshwar Oil Industries, 298 ITR 390
(Kar.)]
The assessee was a manufacturer of edible oil. For the A.Y.
1996-97, it had declared the total income of Rs.8,660 in the return of income.
The Assessing Officer computed the total income at Rs.2,27,614. The Commissioner
enhanced the income to Rs.13,89,795. In appeal before the Tribunal, the Single
Member of the Tribunal decided the appeal and granted relief to the assessee.
In the appeal preferred by the Revenue, the following
questions were raised :
“(i) Whether the single member of the Tribunal had
jurisdiction to decide the appeal when the subject matter of appeal was
exceeding Rs.5,00,000 ?
(ii) Whether the Tribunal was justified in reversing the
findings of the Appellate Commissioner, when the assessee failed to discharge
the burden of proof as required u/s.68 of the Income-tax Act ?
The Karnataka High Court upheld the decision of the Tribunal
and held as under :
“(i) A single member of the Tribunal can exercise powers if
the income computed by the Assessing Officer is less than Rs.5 lakhs, even
though the same has been enhanced by the Commissioner (Appeals) in excess of
Rs.5 lakhs.
(ii) The Tribunal had given a categorical finding that the
assessee was willing to examine the creditors as its witnesses to prove that
it had availed of loans from them. No records were produced to show that the
assessee had not made such a statement either before the Assessing Officer or
before the Commissioner (Appeals). When the Revenue had got the records to
show whether the assessee was willing to examine any of the witnesses or not,
when such documents were not placed before the Court, one would have to draw
an adverse inference against the Revenue.”
