1996 (2) TMI 14 - SC - Income Tax

Tribunal declined to make the reference to HC - assessee then made an reference application to the High Court - assessee withdrew that application after some arguments - assessee filed writ petition before HC which was dismissed by HC on ground that assessee could have brought the correctness of the Tribunal s order on the merits in reference before the High Court through a reference application - HC was justified in dismissing writ petition.

Summary

Issues:
- Validity of reassessment proceedings under the Income-tax Act
- Tribunal's decision to decline adjournment request
- High Court's dismissal of writ petition challenging Tribunal's order

Validity of reassessment proceedings under the Income-tax Act:
The appellant, an assessee under the Income-tax Act, disclosed income from 14 trucks under a voluntary disclosure scheme. The disclosure was accepted on March 31, 1966. However, on February 28, 1973, the Income-tax Officer issued a reassessment order under section 148 of the Income-tax Act for the assessment years 1959-60 to 1962-63, bringing additional amounts to tax as income from trucks. The appellant contended that the Income-tax Officer had no power to reassess the income as the disclosures under the voluntary scheme were protected. Despite the appellant's appeal, the Appellate Assistant Commissioner not only rejected the appeal but also enhanced the amount found by the Income-tax Officer. The appellant then appealed to the Income-tax Appellate Tribunal, which proceeded ex parte on May 31, 1975, after declining the appellant's adjournment request due to the representative's health issue. The Tribunal deleted the addition made by the Appellate Assistant Commissioner but allegedly ignored the appellant's contention on the validity of reassessment proceedings. Subsequently, the Tribunal dismissed the application for restoration of the appeals on August 31, 1976.

Tribunal's decision to decline adjournment request:
The appellant, on May 22, 1975, requested an adjournment from the Tribunal due to the representative's health issue. However, the Tribunal declined the adjournment request, proceeding ex parte on May 31, 1975. The appellant claimed that the reply declining the adjournment was received too late for him to make alternate arrangements to appear before the Tribunal. This decision by the Tribunal led to the appellant feeling aggrieved as they were not able to present their case effectively, impacting the outcome of the proceedings.

High Court's dismissal of writ petition challenging Tribunal's order:
Following the Tribunal's decisions, the appellant sought to refer questions to the High Court, which were declined by the Tribunal. Subsequently, the appellant withdrew the application made to the High Court for reference. The appellant then filed a writ petition before the High Court challenging the Tribunal's order dated May 31, 1975, and the reassessment made by the Income-tax Officer. However, the High Court dismissed the writ petition on May 13, 1977, noting that the issues raised in the petition should have been brought before it through a reference application, which the appellant had withdrawn. The High Court emphasized that the questions raised in the writ petition could have been addressed through a reference application, and thus, the dismissal of the petition was justified.

In conclusion, the Supreme Court dismissed the appeal, stating that the appellant could have raised the issues through appropriate channels such as reference applications or during the Tribunal proceedings. The High Court's decision to decline the writ petition was deemed appropriate, and no costs were awarded in the matter.