TMI Blog1966 (10) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 34(1)(a) of the Income-tax Act? The material facts are these : The relevant year of assessment is the assessment year 1945-46, the previous year being the financial year ending 31st March, 1945. The assessee is the wife of Ganesh Prasad. She was the grand-daughter of Raja Sir Moti Chand. She has been assessed in the status of an individual under section 34(1)(a) of the Act for her failure to explain satisfactorily a sum of ₹ 24,500 out of the total investment of ₹ 83,500 made in the purchase on May 8, 1944, of a house property at Varanasi in her name. Her husband, Ganesh Prasad, was a member of the erstwhile Hindu undivided family of M/s. Bishwanath Prasad Sons. The Tribunal has found that she also was a member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1st of December, 1952, and issued a notice, to the husband of the assessee, Ganesh Prasad, and not to her, under section 34. On the 18th of March, 1954, the husband, Ganesh Prasad, filed objections in writing to the Income-tax Officer in response to the show cause notice, dated the 16th of March, 1950, supported by an affidavit. He also furnished the original sale deed and mutation of the Municipal Board in favour of his wife and urged that he had no concern with the property. He further stated that he wanted to produce certain witnesses and gave a list of five witnesses who might be summoned including one Shri Murlidhar, the scribe of the sale-deed, to prove who the real purchaser was. The Income-tax Officer on the 22nd of March, 1954 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice under section 34(1)(a) was issued to the assessee on the 23rd of March, 1954. The assessment order was completed by the Income-tax Officer on the 7th of March, 1955. The Appellate Assistant Commissioner upheld the validity of the assessment under section 34(1)(a) and dismissed the appeal on January 24, 1959. The Appellate Tribunal also dismissed the appeal. In doing so, however, the following observations, inter alia, were made : The assessment was levied in the first instance on the Hindu undivided family in respect of this income from an undisclosed source, but this assessment against the Hindu undivided family was set aside in appeal... The next step for the department was to take up this matter against the husband, and we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource for the purchase of the house in her name. ... It was not the case of a mere change of opinion on the part of the Income-tax Officer as urged on behalf of the appellant. The Income-tax Officer had to guard against the expiry of limitation in the peculiar predicament in which he was placed, where the house stood in her name and the assessment was pending against her husband.... Since the proceedings against the husband are pending before the Appellate Assistant Commissioner, we refrain from expressing any opinion whether the money for the purchase of the house proceeded from him or not. Thereupon, the assessee moved the Tribunal for a reference to this court under section 66(1), but that application was rejected. Then this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily. The question which has been raised by the assessee before us, therefore, is whether in these circumstances it could be said that the Income-tax Officer 'had reason to believe... that profits or gains chargeable to income-tax had escaped assessment, within the meaning of section 34(1)(a)'. It is clear that what was agitating the mind of the court was the validity of the assessment itself which was made under section 34(1)(a), when the Tribunal, which is the final court of fact, had yet not made up its mind whether the impugned sum of ₹ 24,500 was the income of the assessee or that of her husband. Apart from the legality of the notice which was issued under section 34(1)(a), when no finding had been given by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, but it is certainly not open to the Income-tax Appellate Tribunal, which is the final court of fact, to make a protective order. The Act requires the Tribunal to give final findings of fact which, in this case, can only mean that it must find, as a fact, that the impugned sum was the income of the assessee and of no one else. When the Tribunal refused to give any such finding, then it is not possible for the Tribunal to confirm such an assessment, albeit under section 34(1)(a). It is not for the Tribunal to make excuses for the Income-tax Officer or to justify his action, first, in making the assessment in the hands of the undivided Hindu family, and then in the hands of the husband and, while an appeal against that assessment order made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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