|COURT:||Andhra Pradesh High Court|
|CORAM:||Challa Kodanda Ram J, L. Narasimha Reddy J|
|CATCH WORDS:||excise records, manufacturing process, verification|
|DATE:||October 29, 2014 (Date of pronouncement)|
|DATE:||November 14, 2014 (Date of publication)|
|AY:||1988-89 to 1997-98|
|FILE:||Click here to download the file in pdf format|
|An ITO cannot carry out the functions of an authority under the Central Excise Act and arrogate to himself the power to determine the quantity of production, or the intricacies of the manufacturing process. He must seek assistance of the concerned authority|
(i) Even where the authorities of the Central Excise Department doubt the accuracy of figures mentioned in the registers, or if they find it difficult to understand the complexity of the manufacturing process, they seek the help of the experts. Sometimes experts are on the rolls of the department itself, and on the other occasions, the service of experts outside the department are availed. The Assessing Officer under the Act can certainly look into various records of the assessee, to satisfy himself about the correctness of the facts and figures, or to come to his own conclusions about the income of the assessee. If it is a case of mere verification of books of account, or the registers that reflect the sale of any product, the Income Tax Officer can undertake the exercise by himself. Where, however, he entertains a doubt about the correctness of the facts and figures that are mentioned in the registers, which are required to be maintained under the Central Excise Act or the Rules made thereunder, the proper course for him would be to take the assistance of the concerned authority under the Central Excise Act. Howsoever anxious or willing he may be to verify the registers, by himself, outcome of the exercise may not be accurate. Just a Superintendent of Central Excise Department, cannot be expected to verify the correctness of the income tax returns, submitted by a manufacturer, it is not at all safe for any Income Tax Officer to undertake verification of the records referable to the department of Central Excise. Unfortunately, this is what exactly has happened in the instant case. A perusal of the order of assessment discloses that the Assessing Officer did not feel any inhibition to express his views on a matter, which does not genuinely fall in his purview. In a way, he has undertaken certain activity, which a Superintendent of Excise Department would have hesitated.
(ii) An Income Tax Officer cannot carry out the functions of an authority under the Central Excise Act and arrogate to himself the power to determine the quantity of production, or to utter a final word on the intricacies of the manufacturing process, that too, without referring to any reliable material. The Assessing Officer, in the instant case, was totally unsuited for undertaking the activity of determining the exact production of the material, which itself involves very complicated procedures.