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TMI Blog1967 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... to three assessment years, namely, the two years mentioned above as well as the subsequent assessment year 1951-52. They were disposed of by him by a common order and the question framed above has reference to certain alterations made by the Appellate Assistant Commissioner in the findings recorded by the Income-tax Officer and certain directions issued by him to the Income-tax Officer. The brief facts are the following : The assessee follows an account year which is different from the financial year. His account year commences on the first of September every year and closes on the 31st of August of the immediately succeeding year. The relationship between the account years and the assessment years with which we are now concerned is as follows : Account year Assessment year 1-9-1947 to 31-8-48 1949-50 1-9-1948 to 31-8-49 1950-51 1-9-1949 to 31-8-50 1951-52 For convenience, we shall refer to these years respectively as first year, second year and third year. The assessment of the first year was completed on the 31st December, 1953, by one Income-tax Officer. The assessments for the second and the third years were completed by another Income-tax Officer in February, 1955. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year. Thus the sum of Rs. 19,130 was made up of entries during the period September, 1948, and March, 1949, within the financial year relating to the first year 1949-50 ; and Rs. 11,000 added by the Income-tax Officer for the third year fell within the period November, 1949, and January, 1950, and therefore within the financial year corresponding to the second of the assessment years 1950-51. Now, although it may be in certain circumstances and subject to certain conditions open to an assessee to choose his own account year with respect to particular sources, so far as income from undisclosed source is concerned, the previous year is the previous year as defined, namely, the financial year immediately preceding the assessment year. The result of the findings of the Appellate Assistant Commissioner, therefore, was that on a proper examination of the accounts and the situation, Rs. 19,130 should have been assessed as income from undisclosed sources for the assessment year 1949-50 and Rs. 11,000 should have been assessed as income from undisclosed sources during the assessment year 1950-51. Acting on this legal result, the Appellate Assistant Commissioner deleted Rs. 11,000 from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31 of the Income-tax Act, 1922, they are limited to the assessment year to which the appeal in question relates and to the record of the assessment made up of the return made by the assessee and the matters examined and considered by the Income-tax Officer. In this case, according to the argument, the Appellate Assistant Commissioner has treated all the three assessment years, the appeals in respect of which he was hearing together as consolidated appeals, as one large unit and not three different units as he should have done. It is also contended that even if his order may be cut up into three portions, each relating to one of the assessment years he was dealing with, he has committed the error of adding to the sources of income sources not examined or considered by the Income-tax Officer in relation to the said year. The arguments are supported by two rulings of the Supreme Court, which circumstance reduces to a considerable extent the necessity of discussing the matter on principle or at any great length. First of the cases is that reported in Income-tax Officer v. Murlidhar Bhagwan Das. In that case, the Supreme Count laid down the following propositions, namely, (1) the jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercised only in respect of the source actually considered by the original assessing authority. The effect of the decision is that the Appellate Assistant Commissioner would have no power to enhance the assessment by discovering new sources of income not mentioned in the return of the assessee nor considered by the Income-tax Officer in his assessment order. Applying these principles, it appears to us that the findings and directions made by the Appellate Assistant Commissioner in his appellate order which the Tribunal held were within the scope of his appellate power are actually beyond the limits of that power. It will be noticed that the original assessing authority had not dealt with the cash credits as representing income from an undisclosed source, but as a device adopted to suppress a portion of his income derived from business. The clear opinion of the assessing authority was that they were really relatable to the business of the assessee as a source of income and were portions of such income so diverted as to escape liability to tax. As against this the clear opinion of the Appellate Assistant Commissioner was that they were not part of the business income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this court took the view that a question of law did arise out of the appellate order of the Tribunal in this case, it cannot be said to have indulged in framing a question to which an answer in general terms as above was perfectly obvious. The question must be related to the facts and circumstances of the case and so related it clearly involves the several elements raised before us and discussed in the argument on behalf of the assessee and considered by us in this order. Our answer therefore to the question is that the Tribunal was not right in taking the view that the Appellate Assistant Commissioner in this case had the competence to alter the findings of the Income-tax Officer to the effect that the cash credits were part of the business income into a finding that they were undisclosed items of income from undisclosed source and consequently to travel beyond the record of the appeals before him and alter in one appeal the assessment on the basis of facts and materials restricted to another appeal. This means that the shifting of the income of Rs. 11,000 from the assessment year 1951-52 to the income assessable for the assessment year 1950-51 and the direction to add to the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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