TMI Blog1985 (8) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... and October 31, 1951, respectively. Several years later on February 21, 1965, the Income-tax Officer sent a proposal to the Central Board of Direct Taxes seeking their approval to reopen the assessment for the aforesaid three years. In the view of the Income-tax Officer, the assessee was possessed of a house at Deoghar which ostensibly stood in the name of Lakshmi Devi, wife of Hanuman Prasad Sharaf. The income represented by the unexplained investment in the house property had escaped assessment. The unexplained investment, according to the Income-tax Officer, was to the tune of Rs. 1,45,600. With the approval of the Central Board, the assessments were reopened In answer to the notice under section 148 of the Income-tax Act, the assessee filed a return declaring " Nil" income. After hearing the assessee's representative, the Income-tax Officer allocated the unexplained investment over the house as follows Rs. 1948-49 60,000 1949-50 25,000 1950-51 60,000 On scrutiny of the accounts, the Income-tax Officer found that in the pass book of Lakshmi Devi, there was a deposit of Rs. 1,52,500 on December 11, 1948. The Income-tax Officer called upon the assessee but not Lakshmi Devi t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has no reason to believe that any income has escaped assessment and even if he has any such reasons, it is not based on any objective fact which was material for assessment and which the appellant did not disclose at the time of the original assessment." The Appellate Assistant Commissioner thus held that the inclusion of the investment in the house property as unexplained income was unwarranted. In regard to the inclusion of Rs. 1,52,500 mentioned in the pass book of Lakshmi Devi as unexplained income of the assessee, the Appellate Assistant Commissioner observed that the reassessment proceeding had been initiated only for considering the unexplained investment in the house and not in regard to the sum of Rs. 1,52,500 mentioned in the pass book of Lakshmi Devi. The reassessment proceeding, therefore, could not be initiated for inclusion of the sum of Rs. 1,52,500. Besides this technical objection to the initiation of reassessment proceeding, the Appellate Assistant Commissioner also applied himself to the stand of the Department on merits. He found that Lakshmi Devi had an overdraft account with the United Commercial Bank Ltd., Calcutta. On the security of a call depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had admitted that the transactions in regard to Rs. 1,52,500 pertained to the Hindu undivided family. I have been somewhat at a loss to appreciate how the assessee could have made such an admission. This matter had been contested by the assessee before the Income-tax Officer as well as before the Appellate Assistant Commissioner tooth and nail. Having succeeded before the Appellate Assistant Commissioner, there appears to be no earthly reason for the assessee to have conceded that this sum belonged to the Hindu undivided family. In paragraph 10 of the application under section 256(1) of the Act, the assessee disputed the alleged admission in the following words : " That the Tribunal has also erred in assuming facts as admission was not there and which has also vitiated the judgment. " The Tribunal instead of stating that the assertion of the assessee in paragraph 10, quoted above, was not correct, again reiterated in paragraph 8 in the statement of facts that it had been admitted before the Tribunal that the amount, though stood in the name of Lakshmi Devi, really belonged to the Hindu undivided family. It passes my comprehension that the assessee could have made such an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her income. If she failed in that behalf, the Revenue would presume that it may have been the income of the assessee, Hanuman Prasad Sharaf just because Lakshmi Devi was the wife of Hanuman Prasad Sharaf, the karta of the Hindu undivided family, it did not necessarily follow that the sum shown in her pass book was the income of the Hindu undivided family and not the personal income of Lakshmi Devi. The parties are Marwaris by origin. Small dealings by females of the house are not unknown. She could have her I own income apart from the income of the Hindu undivided family. Lakshmi Devi, therefore, not having been called upon by the Income-tax Officer to explain the source of the deposit of Rs. 1,52,500 in her pass book, the second question of calling upon the assessee to explain it did not arise. The Department, therefore, had no material before it to indicate that the said sum was the income of the assessee. In the absence of such material, it is difficult to hold that income liable to tax had escaped assessment. Merely because the assessee happens to be the husband of Lakshmi Devi, there was no obligation upon him to indicate in his return the income of his wife, Lakshmi Devi. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 147 of the Income-tax Act. Learned additional standing counsel submitted that the finding of the Tribunal that the sum of Rs. 1,52,500 belonged to the assessee was finding of fact and this court cannot interfere with the findings of fact. He submitted that the assessee had admitted before the Tribunal that the said sum belonged to the assessee and, therefore, the conclusion was inescapable that an item of income belonging to the assessee had escaped assessment. He submitted that the Tribunal not only in the judgment but also in the statement of the case had stated that the fact of the impugned sum belonging to the Hindu undivided family had been admitted before it and this court was precluded from probing whether the assessee had admitted it or not. As a bald proposition, it must be conceded that findings of fact recorded by the Income-tax Appellate Tribunal are binding on the High Court acting in its advisory jurisdiction. It is not open to test the findings of fact unless that is the question referred to the High Court. Further, the narration of facts in the statement of case must be accepted as correct. Therefore, I would not like to state that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of any further investigation? The Income-tax Officer had held that this sum was liable to be assessed as income of the assessee. The assessee had admitted before the Tribunal that it belonged to the Hindu undivided family. If the fact of admission is correct, the Tribunal should have straightaway allowed the appeal of the Department. There was nothing further to be investigated. That is an additional ground for me to doubt the statement in the judgment and the statement of the case regarding the admission. The Appellate Assistant Commissioner had held that there was no failure on the part of the assessee to disclose his income fully and truly. If the Tribunal felt that that finding of the Appellate Assistant Commissioner was not correct, it should have set it aside, but curiously without setting aside that finding, the Tribunal directed the Appellate Assistant Commissioner to reconsider the matter. Without upsetting the finding of the Appellate Assistant Commissioner in this regard, the Tribunal had no jurisdiction to direct the Appellate Assistant Commissioner to consider the matter further. Learned Additional Standing Counsel for the Revenue brought to our notice the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed as follows: " It was argued by Shri J. Sahay, Inspector of Income-tax, who appeared for the Income-tax Officer that at least for 1949-50, the reassessment was valid because a sum of Rs. 1,52,500 has escaped assessment. In my opinion, this contention is not correct Firstly, the Income-tax Officer, as is apparent from his order of assessment, initiated reassessment proceedings for considering unexplained investment only. He cannot take up new ground to justify initiation of proceedings. The order for 1949-50 does not show that reassessment proceedings were started for taxing Rs. 1,52,500. This reason is not mentioned in the order sheet for 1949-50 either. Therefore, the Income-tax Officer cannot bank on it for supporting his action. " The orders of the Income-tax Officer and the Appellate Assistant Commissioner show clearly that the sum of Rs. 1,52,500 was not the matter for which permission to initiate reassessment proceeding was asked for and accorded. If that was not the subject matter of sanction by the Board, it was not open to the Income-tax Officer or the Tribunal to look into this aspect of the matter. Sanction to re-investigate this matter could not have been as ..... 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