ASSTT CIT Vs. KISHAN LAL AND CO
INCOME TAX APPELLATE TRIBUNAL
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C.K. Sethi, J.M. -
(1.) THE revenue is in appeal against the order dated 31-3-2003/1-4-2003 passed by the Commissioner (Appeals) in the matter of an assessment made under Section 143(3) of the Income Tax Act, 1961 for the assessment year 1999-2000. THE revenue has raised ground No. 3 of an appeal as under:
3. THE learned Commissioner (Appeals) has erred in law and on facts in not properly appreciating that the assessee has filed return first time as new assessee and ignoring that the assessee has filed copy of partnership deed dated 16-1-1996 along with addendum thereto dated 22-10-1998 in response to notice issued by assessing officer under Section 139(9) dated 28-7-2000, which proves the correct status of the assessee as PFAS, because voluntary non-compliance of the statutory provisions under Section 184/185 would not alter its status as claimed (PFAOP) in terms of the provisions of Section 292B of the Income Tax Act, 1961.
(2.) This appeal filed by the revenue was disposed of by the Tribunal vide order dated 31-3-2003. Thereafter, the revenue moved an application under Section 254(2) of the Act stating that the ground No. 3 raised in the appeal was not considered by the Tribunal while deciding the appeal. The miscellaneous application numbered as JVLA. No. 297 (Delhi) 2007 was disposed of by the Tribunal vide order dated 25-2-2008 by holding that the ground No. 3 was not adjudicated upon. The Tribunal, therefore, directed the registry to issue notice to the parties for fixing the case for hearing in due course. The Tribunal's earlier order was thus recalled for a limited purpose to adjudicate the ground No. 3.
Ground No. 3 is against Commissioner (Appeals)'s order in taking the status of the assessee as partnership firm assessed as AOP, and not partnership firm as such taken by the assessing officer.
(3.) THE assessee filed return of income for the assessment year under consideration on 12-11-1999 as a new case declaring total income at Rs. 1,07,210. THE case of the assessee was selected for compulsory scrutiny. Notices under Section 143(2)/142(1) were issued to the assessee, which were complied with. In the return of income, the assessee had determined the tax payable on a total income, of Rs. 1,07,210 by calculating the rate of tax at 30 per cent being maximum marginal rate, applicable to AOP. THE return of income filed by the assessee was not accompanied by copies of partnership deed and other documents of any agreements between the parties. THE assessing officer, therefore, asked the assessee to file the above documents vide notice under Section 139(9) in response to which the assessee furnished xerox copy of the deed of partnership made on 16-1-1996 and also a xerox copy of addendum of partnership dated 22-10-1998. THE assessing officer was of the view that the issue of ascertaining the correct status of the assessee was an important issue in the assessment of this year. He had taken a view that the correct status of the assessee is that of firm, which is confirmed by the circumstances and documents, as against the status of AOP shown by the assessee. THE assessing officer further stated that the assessee had tried to suppress the tax liability by claiming AOP status whereas the status evidenced by partnership deed is clearly as of firm. THE assessee stated before the assessing officer that the assessee has rightly chosen to be assessed as Partnership Firm assessed. As AOP and, further stated that the status of the assessee in the absence of proper instrument of partnership deed would remain as Partnership Firm assessed as AOP and not Partnership Firm Assessed As Such.;
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