TMI Blog1993 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,000 per month, free of income-tax. According to he appellant, the order of appointment further stipulated that the period of employment shall be 25 years and that in case his services are terminated before the expiry of the said period, he shall be paid compensation at the rate of Rs. 40,000 per annum for the unexpired period. The Revenue, of course, disputes the aforesaid stipulations relating to period of service and the provision for compensation in case of premature termination. Through a letter dated February 14, 1950, the services of the appellant were terminated with effect from November 30, 1949. An amount of s. 7 lakhs was paid to the appellant on that occasion. In the assessment proceedings relating to the assessment Year 1950-51, the appellant claimed that the said sum of Rs. 7 lakhs received by him was not taxable inasmuch as it represented compensation for loss of employment. He submitted that, according to the law as it then stood, the amount paid by way of compensation towards loss of employment was not taxable. The Income-tax Officer did not agree with the submission and included the said amount in his income. On appeal, the Appellate Assistant Commissioner up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mattered whether the matter was considered and finally decided on the merits or not. Even if there was a final decision on the merits, it would be final only for the purposes of those Tribunals and would not bind other Tribunals or this Commission investigating the matter afresh for any other purposes." "The question before the income-tax authorities was whether the receipt of Rs. 7 lakhs was taxable or not in the hands of Shriyans Prasad Jain. We are not, however, looking into this question, viz., taxability or otherwise of the payment of Rs. 7 lakhs. What we are concerned with is the propriety of the transaction itself." The Commission had further observed: "We do not deny that Shri Shriyans Prasad worked for D. C. P. M. from 1943 and that he drew remuneration specified in the liquidator's letter of May 1, 1953, to Messrs. D. P. Khosla and Co., nor did we question that the income-tax was paid as stated during that period. We have questioned in another place the reasonableness of the terms but not the fact of appointment on those terms. What we are questioning here are the terms about the period of employment and the provision about the payment of compensation for the brea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reasonable belief as to omission or failure to disclose may arise as a result of information which may come to his know ledge, but even in such cases, if the assessee has omitted or failed to disclose truly and fully all material and primary facts, it will always be open to take action under section 147(a). Under section 151(1), no notice shall be issued under section 148 after the expiry of eight years from the end of the relevant assessment year, unless the Board is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The notice under section 148 in the present case has been issued after the expiry of eight years from the end of the assessment year 1950-51, but the Central Board of Direct Taxes, upon a report submitted by the Income-tax Officer, has accorded its sanction for initiation of proceedings against the assessee for the assessment year 1950-51 under section 147(a) of the Act. In that view of the matter, it is not possible to take the view that the initiation of proceedings can be regarded as time barred. Accordingly, the notice for initiation of reassessment proceedings will have to be upheld in so far as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and could not have been reopened either in reassessment proceedings or by the Settlement Commission in proceedings under Chapter XIX-A of the Act. (4) The finding of the Tribunal with respect to the said letter is based on no evidence. It is a case of pure guess. Shri P. S. Poti, learned counsel for the Revenue, supported the reasoning and conclusion of the Settlement Commission. He submitted that the findings recorded by the Commission are not subject to review in this appeal. Learned counsel submitted that in the absence of the appellant establishing that the order of the Commission is violative of any of the provisions of the Act, no relief can be granted to him in this appeal. He relied upon the decision of this court in Jyotendrasinhji v. S. I. Tripathi [1993] 201 ITR 611. Section 7 of Indian Income-tax Act, 1922, read as follows at the relevant time: "Salaries.-(1) The tax shall be payable by an assessee under the head 'Salaries' in respect of any salary or wages, any annuity, pension or gratuity, and any fees, commissions, perquisites or profits in lieu of, or in addition to, or are paid by or on behalf of, the Government, a local authority, a company, or any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. According to the appellant, the letter read as follows: "DALMIA CEMENT AND PAPER MARKETING Co. LTD., DALMIANAGAR. Syt. Shriyans Prasad Jain, October 11, 1943. Bombay. Dear Sir, Confirming the negotiations that have been carried on between this company and yourself, this is to confirm that you will please look after the Bombay office organisation of this company, for which you will be paid a fixed amount of Rs. 4,000 (rupees four thousand only) per month. Income-tax and super-tax due and payable on this amount of remuneration will be paid by the company according to the rate prescribed in the yearly Finance Acts. Conveyance and entertainment allowances will be allowed as may be agreed upon from time to time. The term of employment will be for a definite period of 25 years commencing from April 1, 1943, and the company reserves to itself the right to depute you to look after the interests of any other concern and arrange for your remuneration being paid either by that other concern or itself meet the same. You have requested that it should be made clear that should your services be terminated before the expiry of 25 years, then a definite compensation for loss of offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness of the letter was gone into in the original assessment proceedings and that the finding recorded therein in the, appellant's favour is not open to review either in the reassessment proceedings or by the Settlement Commission, So far as the Assessing Officer is concerned, admittedly, he did not refer to the said aspect. He did say that the said letter was produced before him but he did not say whether the letter produced before him was the original or a copy. So far as the Appellate Assistant Commissioner is concerned, he merely observed in his order that " there is on record an agreement dated October 11, 1943". The genuineness of the said letter was not put in issue before him. It is true that before the Tribunal, the Departmental Representative sought to challenge the genuineness of the said letter, but the said challenge was not allowed to be raised. The Tribunal held that it was not open to the Department to attack the genuineness of the said agreement/letter for the first time at the stage of the Tribunal. It is, there fore, not correct to say that the genuineness of the letter was pronounced upon by the authorities in the original assessment proceedings. In this vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
