TMI Blog1982 (1) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... of Perianna Pillai, they were tenants-in-common, each entitled to an equal and separate share I in the transport business bequeathed to them. It was urged that, in consequence, each legatee had to be assessed separately in respect of his, or her, individual share of income from the business. The AAC rejected this contention, and confirmed the assessments made in the status of an AOP. The assessee filed further appeals before the I.T. Appellate Tribunal" reiterating their objection that the ITO was in error in assessing them in the status of an AOP. This contention was met by the department with a new plea put forward at the hearing of the appeal by the Tribunal. The new plea was that even if the assessee could not be treated as an AOP, they could yet be regarded as a " body of individuals " (BOI) and charged to tax as such, as a single unit of assessment. The Tribunal entertained this new plea of the department and sustained the assessments already made but treating the assessee as a " body of individuals ", and directing the ITO to amend the assessments accordingly. In the present references, brought before this court at the instance of the assessees two questions are raised. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent I.T. Act, 1961. Both provisions, in terms, enjoin that the Tribunal, after hearing the parties to the appeal, " shall pass such orders thereon as it thinks fit ". It was while construing these words and particularly the expression " thereon ", that the Supreme Court rendered their opinion that the Tribunal was not powerless to dispose of an appeal on the basis of a new point raised by the respondent to the appeal. In a recent reported decision of this court in CIT v. Madras Industrial Investment Corporation Ltd. [1980] 124 ITR 454, the Supreme Court's ruling in Hukumchand's case[1967] 63 ITR 232, was referred to, and the legal position was summed up in the following terms (p. 463): " Thus, the legal position is clear that neither the assessee nor the department is restricted to the plea put forward at any earlier stages, when the matter travels through the hierarchy of authorities and that it would be open to the Tribunal to consider any fresh plea in the exercise of its discretion. Even where consequences of the acceptance of the assessee's plea would involve granting a larger amount as deduction than was demanded at the stage of assessment, the Tribunal would have juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se cases. The other decision is from Delhi, reported as CIT v. Edward Keventer (Successors) P. Ltd. [1980] 123 ITR 200. The Delhi High Court in their judgment observed that a new plea from respondent must be entertained by the Tribunal as a matter of practice on principles of natural justice. The value of these three decisions as precedents, however, is so much the less because none of them refers to the decision of the Supreme Court in Hukumchand's case [1967] 63 ITR 232. Nevertheless, they disclose a consensus of judicial opinion on the amplitude of the Tribunal's appellate jurisdiction as including the power to entertain a new plea even if it is raised by a respondent to an appeal. In the present case, the Tribunal did not have to go in for fresh facts while entertaining the department's new plea and deciding it. They did so by applying the relevant statutory provisions to the facts already on record. Learned counsel for the assessees submitted that, on the facts found, the Tribunal erred in holding that the assessee constituted a BOI within the meaning of the Act. Learned counsel submitted that the mere fact that a plurality of individuals happened to be interested as owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in 1961, the year after the Supreme Court decided Indira Balkrishna case [1960] 39 ITR 546, the idea of an AOP had become too well settled to need further clarification. If Parliament's intention in drawing up the relevant provisions in the 1961 Act had been to make no changes in this class of assessees and to leave them well enough alone, it could have done so by the simple expedient of not adding anything to, or taking away anything from, the familiar phrase " association of persons ". As it happened, however, Parliament added the new class of " body of individuals ", while retaining the old expression " association of persons ". The significance of this addition to the existing classification ought not to be lost on a court of construction. Legislative history in one other respect also points to the same conclusion. The expression " association of persons " was adopted as a right expression when extensive amendments to the statute were made in the year 1939. The much earlier statutory term. " association of individuals " was given up by the Legislature for the reason that " persons " was thought wide enough to include artificial juridical persons. To hold, therefore, that " bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r accident. They-are, on the contrary, a family group, knit by family ties. At the inception, they were united in a common grief. The bequest of the business to all of them in common under the testator's will only tended to make their family tie-up into more of an economic group or body than it would otherwise have been. What is more, the object which united them economically was not just an investment in property but a live business undertaking. Business, as a species of property, differs from other subjects of ownership in that it is not static, but involves a constant flow of transactions upon transactions every day, subject to risks and vicissitudes unlike in other kinds of property, and requiring overt acts, of management by those who wish to profit by it. There is no evidence on record in this case that the widow was at any time aided by any of her sons even after they had attained majority, one by one. But they always had the choice of demanding their share, which if conceded, would have resulted either in the disruption of the business or in its disposal. Nothing of this kind, however, happened in this group. That the integrity of the business continued with not one of them ..... X X X X Extracts X X X X X X X X Extracts X X X X
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