Pramod Kumar, Member (A) -
(1.) THIS appeal, filed by the assessee, is directed against the order dated 21st January 2011 passed by the learned Commissioner of Income Tax (Appeals) -I, Agra, in the matter of order under section 267 r.w.s. 251 of the Income Tax Act, 1961, for the assessment year 2002 -03. The appeal is time barred by 4 days but having perused the condonation petition and having heard the rival contentions on the same, we are inclined to condone this small delay. Accordingly, we admit the appeal and proceed to take up the same on merits.
(2.) TO adjudicate on this appeal, we have to begin by taking note of some undisputed material facts. The assessee before us is a trustee in Gurunanak Devji Trust, Guru Govind Singhji Trust and Guru Teg Bahadurji Trust. While adjudicating appeals in the cases of these trusts, learned CIT(A) held that "these trusts were not valid trusts since they did not come into existence in accordance with Section 6 of Indian Trusts Act" and, therefore, "its income should be taxed in hands of all the trustees who were shown to be managing affairs of the trusts". In pursuance of the directions so given by the CIT(A) vide order dated 31st October 2005, the Assessing Officer passed the following order on 4th December 2006:
In order to the valuable directions of the learned CIT(A) -I, Agra, vide his appeal order no. 428,430,427,429 and 431/CIT(A)/ITO 2(1) Agra/2005 -06 dated 3rd October 2005, for the assessment order narrated hereinabove, "the income shown in the hands of the trusts, has to be considered in the hands of the trustees in the equal proportion.
Since the aforesaid assessee is a trustee in the trusts, i.e. Gurunanak Devji Trust, Guru Govind Singhji Trust and Guru Teg Bahadurji Trust, 37 Saket Colony, Agra, which have been decided by the CIT(A) vide his aforesaid appellate orders. Hence, after taking into account equal proportionate shares from the trusts, as narrated below, income so arrived in the share of this trustee is added in his income.
With these brief observations, the Assessing Officer added the shares of income from the said three trusts, at Rs. 1,13,000, Rs. 1,14,000 and Rs. 1,07,500 respectively. Taking these amounts into account, as also his income of Rs. 1,49,350 declared in the return of income filed by the assessee, the assessment was now framed at Rs. 4,83,850. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success. Learned CIT(A) rejected the grievances of the assessee and, inter alia, observed as follows:
...As per order dated 3.10.05 of the CIT(A) in the case of the trusts, it is very clearly held by the CIT(A) that these trusts have not come into existence in accordance with Section 6 of the Indian Trusts Act, 1882. The source of all capital shown in the balance sheet has not been properly examined. He has also held that these trusts are not genuine. Therefore, in the end of the order, it has been held by the CIT(A) that the income shown in the hands of the trust has to be considered in the hands of the assessee in equal proportion...... The order of the AO under appeal is passed in accordance with the directions of the CIT(A) -I Agra, in his order dated 3.10.2005, and against this order of the CIT(A), no findings have are given by the Hon'ble ITAT Agra....... order passed by the AO under section 267/251 dated 4.10.2006 determining income of the appellant at Rs. 4,83,850 is confirmed...
(3.) THE assessee is aggrieved and is in appeal before us.;