The two-judge bench of the Supreme Court, has recently opined that the jurisdiction of the division bench in a Writ Appeal is limited to adjudication of questions of law. Findings of fact recorded concurrently by the authorities under the Income Tax Act, 1961 including the single bench of the High Court cannot be disturbed.
The Court was considering an appeal preferred by the Revenue against the order of the division bench of the High Court in a Writ Appeal.
In the impugned judgment, the division bench of the High Court has set aside the order of the single bench in which the single bench dismissed the writ petition filed by the assessee against the revisional order passed against him. the case of the assessee was that the Commissioner of Income Tax, through his order upheld the disallowance of amount claimed by him as deduction in respect of trade creditors for the reason that the records establish that the assessee has shown sudden in trade creditors without any significant transactions of purchases during the year.Since the claim was found by the authorities as bogus, the amount claimed was added to the total income of the assessee.
However, the division bench reversed the above orders since both are adverse to the assessee and therefore, reversed the orders by holding that the 37 persons who had advanced the loan to the Assessee ought to have been given notice.The order was again challenged before the Supreme Court by the Revenue.
The Court observed that “The jurisdiction of the Division Bench in a Writ Appeal is primarily one of adjudication of questions of law. Findings of fact recorded concurrently by the authorities under the Act and also in the first round of the writ proceedings by the learned single judge are not to be lightly disturbed. In the present case, in the face of the clear findings that the loan applications were processed by the Officers of the Assessee and the loan transactions in question of the aforesaid 37 persons were also handled really by the Assessee and further in view of the categorical finding that the loan amounts were not reflected in the returns of the 37 persons in question, we do not see how the High Court could have taken the above view and remanded the matter to the Assessing Officer. It has been pointed out before us that pursuant to the impugned order passed by the Division Bench of the High Court fresh assessment proceedings have been finalized by the Assessing Officer. The said exercise has been done in the absence of any interim order of this Court. However, merely because fresh assessment proceedings has been carried out in the meantime it would certainly not preclude the Court from judging the validity and correctness of the order of the Division Bench of the High Court.”
Read the full text of the order below.
