M B ABDULLA M B ABDULLA Vs. COMMISSIONER OF INCOME TAX KERALA:INCOME TAX OFFICER KERALA
SUPREME COURT OF INDIA (FROM: KERALA)
COMMISSIONER OF INCOME TAX,KERALA,INCOME TAX OFFICER,KERALA
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Sabyasachi Mukharji, C.J.I -
(1.)-This is a petition under Article 136 of the Constitution for leave to appeal against the orders of the tribunal and the High Court. The High Court vide its order dated- 31st January, 1989 had dismissed the application for reference. There is also an order of the tribunal refusing to make a reference under Section 256(1) of the Income Tax Act, 1961 (hereinafter called 'the Act'). This petition also seeks leave to appeal directly from the said order of the tribunal.
(2.)However, in order to appreciate the controversy in this case the facts reiterated by the High Court of Kerala in its said judgment and order are important, it had observed as follows:-
"For the assessment year 1969-70 the petitioner filed a return declaring a total income of Rs.9,571/-. In completing the assessment the assessing authority proceeded on the basis that the assessee was the owner of the gold seized on 9-11-68 and confiscated by the Customs authorities worth Rs. 20 lakhs and accordingly the Income-tax Officer treated the sum of Rs. 20 lakhs as income from undisclosed source applying the provisions of Section 69-A of the Income Tax Act, 1961. On appeal, the Appellate Assistant Commissioner held that the assessee was not the owner of the contraband gold seized by the Central Excise authority and therefore reduced the assessee's total income by Rs. 20 lakhs. The Revenue filed a second appeal before the Appellate Tribunal, Cochin Bench. After going through the evidence the Tribunal came to the conclusion that the car belonged to the assessee and the special places of concealment had been provided by design in the car, Further the assessee himself was driving the car in which the gold was found. The assessee also has not attributed the ownership to anybody else. The assessee also has not established that the gold was given to him by any third party. In view of all these, the addition of Rs. 20 lakhs made by the Income-tax Officer but deleted by the Appellate Asstt. Commissioner was restored. The additional ground raised by the Revenue that the appeal is not maintainable before the Appellate Asstt. Commissioner was rejected. The assessee thereafter filed a Miscellaneous Petition for rectification of the order of the Tribunal. The rectification sought to be made are:-
(1) Business loss to the tune of Rupees 20,00,000 incurred by the assessee due to investment in gold and the confiscation of the gold by the Customs authorities be allowed for the assessment year 1969-70, in view of the decision of the Supreme Court in C.I.T. v. Piara Singh, decided on 8-5-1980 and reported in 124 ITR 40:
(2) the income-tax and special surcharge amounting to Rs. 16,19,395/-, Rs. 20,00,000 and
(3) as the tax has already been collected from the amount of Rs. 20,00,000 no interest was payable."
(3.)The High Court noted that the tribunal could not accede to the requests -of the petitioner as these could not be considered as mistakes apparent from records. The points had not been raised by way of cross-appeal or cross-objections. Thereafter, the assessee filed a petition u/s. 256 of the Act seeking reference of the following questions of law:-
" 1. Whether the Tribunal is right in law in its view that the right to file an application under Section 254(2) of the Income Tax Act, 1961 is open to be exercised only by the applicant and not by the respondent in the appeal before it
2. Whether the Tribunal is right in law in rejecting the application under Section 254(2) on the ground that the applicant was not the appellant before it and that he had also not filed any memo of cross-objections in the appeal against him
3. Whether on the facts and in the circumstances of the case the assessee was bound to raise before the Tribunal, at the stage when he was only supporting the order appealed against him, of his case for deduction which he was legally entitled to claim in case of allowance of the appeal against him
4. Whether on the facts and circumstances of the case the Tribunal was right in law in holding that the claim of loss on account of confiscation of the gold was not the subject matter of the appeal -
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