TMI Blog2009 (10) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (hereinafter referred to as "the Act"), raise common issues of facts and law, and are with respect to the assessment years 1995-96, and 1997-98. Dr. Narendra Prasad, a surgeon in Patna and Dr. Leela Prasad, his wife and a professor, are two individual assessees. According to the impugned order, they constitute an "association of persons" (AOP, in short), in the name and style of M/s. Alok Nursing Home, within the meaning of section 2(31) of the Act. Misc. Appeal No. 145 of 2004, Misc. Appeal No. 146 of 2004, and Misc.Appeal No. 148 of 2004, are with respect to the assessment year 1995-96. The remaining two appeals are with respect to the assessment years1996-97 and 1997-98. The primary question for consideration in these appeals is the same, whether or not Dr. Narendra Prasad and Dr. Leela Prasad, the two individual assessees, constitute an association of person, namely, M/s. Alok Nursing Home, within the meaning of section 2(31) of the Act The three learned authorities below have disposed of the matters by common orders, and these appeals are accordingly being disposed of by a common judgment. 2. It may be clarified that Dr. Leela Prasad, the appellant of M. A. No. 146 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the husband and the wife in equal proportions and, therefore, the rental income and the other income earned from the nursing home in those three assessment years, would be assessed at the hands of the applicant and his wife. The Department continued to accept the returns of the two assessees on the same basis for all the years thereafter till such time their returns for the two assessment years in question came up for consideration. It is relevant to state that the Department has taken different stand only with respect to these two assessment years, and has reverted to the same position, and continued to follow the aforesaid basis formulated by the Settlement Commission, in the subsequent assessment years also. 5. The returns submitted by the assessees were scrutinized by the learned Assessment Officer by her order dated November 12, 1997. She provisionally came to the conclusion that it was a case of income escaping assessment under section 147 of the Act and, therefore issued notice in terms of section 148 of the Act as to why Alok Nursing Home be not treated to be an association of persons of the two assessees. On a consideration of the materials before her, she came t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the income from Alok Nursing Home is to be assessed at the ratio of 50-50 basis in the hands of Dr. Narendra Prasad and Dr. Leela Prasad and in view of the fact that the Revenue authorities have accepted the factual and the legal position for long years even after the order of the Settlement Commission, it is open to allow the Revenue authorities to change their position and take a different stand and treat the Alok Nursing Home as an association of persons and to tax on the aforesaid basis?" 7. While assailing the validity of the impugned order, the learned counsel for the appellants submits that it may be a case of income escaping assessment within the strict and hyper-technical view of law of section 147 of the Act, but is surely not a case of suppression of income. He next submits that the learned Third Member has travelled beyond the terms of the reference made to it by the two Members of the Tribunal which is in violation of the provisions of section 255(4) of the Act. He relies on the following reported judgments: (i) Jan Mohaminud v. CIT [1953] 23 ITR 15 (All); and (ii) Hanutram Chandanmul v. CIT [1953] 23 ITR 505 (All). 8. He submits in the same vein that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d himself to the issues referred to him by the two members on difference of opinion, and no unnecessary emphasis can be placed on discussion of incidental issues. He also submits that the learned authorities under the Act in the present case were free to take a different view, inter alia, for the reason that assessment of the periods in question had not commenced. He lastly submits that the learned Assessing Officer, as well as the learned Tribunal, have on consideration of the facts and figures returned by the two assessees, have recorded as an issue of facts that an association of persons is in existence. 10. We have perused the materials on record and considered the submissions of learned counsel for the parties. The over-arching reality in the protracted proceedings is that the learned authorities under the Act have nowhere, and at no point of time, found the two assessees guilty of suppression of material facts or suppression of income, which goes to the credit of the two assessees. The authorities have come to the conclusion that the two constitute an association of persons, different and distinct from the two individual assessees, within the meaning of section 2(31) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined before the Settlement Commission. The view taken by the Settlement Commission has been followed by the learned authorities under the Act even for the periods that have followed the ones in question apart from the preceding periods. We agree with the view taken by the learned Judicial Member who has observed as follows in the impugned order: " Theoretically supported with the provision of law a hypo thetical situation can be defined that there exist an association of per sons but unless there are materials to prove and establish virtually there exist an association of persons is yet to be conceived. It has to be noted that the same facts and circumstances are coming ever since 1982-83. How, when and in what manner Dr. Narendra Prasad and Dr. Mrs. Leela Prasad constituted an association of persons and in what manner and to what extent that aspect has to be found out. The Revenue Department has been accepting and assessing the income from Alok Nursing Home in the hands of doctor couple at the ratio of 50 per cent, each for long. Making a departure without bringing any material as pointed out above is not justified ." 12. We are in this connection supported by the law laid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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