- (1.) THE Income -tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (for short 'the Tribunal') in ITA Nos. 205 to 210/Chd/2004, for the asst. yrs. 1993 -94 to 1998 -99. The appellant has also framed similar substantial questions of law by filing separate appeals for separate assessment years. The facts are being taken from ITA No. 16 of 2005.
(2.) THE substantial questions of law sought to be raised are as under : "(i)(a) That whether, under the facts and circumstances of the case, the assessing authority is justified in taking the action under s. 148 and making reassessment by changing the head of the income from business income to rental income based on the change of opinion and without bringing any material or evidence to justify the issue of notice under s. 148 and there being interpretation of law and hence the proceedings are unjurisdictional and need to be quashed. (b) That, under the facts and circumstances of case, the CIT(A) and Tribunal were justified in not adjudicating upon the issue of notice under s. 148. (ii) That, whether the Tribunal was justified in upholding the reassessment under s. 148 and reversing the decision of the CIT(A) by holding that hiring of commercial assets being building and plant and machinery is an income from property and from other sources and not the business income under the facts and circumstances of the case. (iii) That whether, under the facts and circumstances of the case, the Tribunal is justified not to have dealt with the various judgments relied upon by the respondents to adjudicate upon the issue on merits and hence the order is perverse and not a speaking order and against the judicial duty of the quasi -judicial authority to be performed. (iv) That whether, under the facts and circumstances of the case, the Tribunal was justified in not taking into consideration the findings of the Tribunal for the asst. yrs. 1980 -81 to 1983 -84 in ITA Nos. 748/Chd/1992 to 751/Chd/1992 and placing the onus on the appellant to prove that he had the intention to start the business and completely taking a divergent opinion which is bad in law. (v) That whether, under the facts and circumstances of the case, the Tribunal was justified in law in treating the income of Rs. 1,73,894 as rental income in the reassessment proceedings against the business income claimed by the appellant and having assessed as such for all the impugned years thereby disallowing the expenditure of Rs. 1,27,020. 1,73,894 from renting out building and machinery, against which he claimed expenditure of Rs. 1,27,020 including remuneration paid to partners but the same was being shown as income from business. Since in the opinion of the AO income chargeable to tax has escaped assessment, notice under s. 148 of the IT Act, 1961 (for short 'the Act') was issued to the assessee. In response to the notice, the assessee reiterated his earlier return filed declaring the income at Rs. 4,800. After considering the contention raised by the assessee, the AO taxed entire receipt of the assessee on account of rent of building and machinery as income from house property and after granting statutorily available deductions demand of tax was raised.
(3.) AGGRIEVED against the order of assessment, the assessee went in appeal before the Commissioner of Income -tax the Tribunal for the asst. yrs. 1980 -81 to 1983 -84, directed that the income of the assessee is to be treated as income from the business and not from the house property. While accepting the appeal, the CIT(A) observed that the AO had not brought on record any evidence/facts to prove that the business has really been closed down and not suspended due to slump in the market. While recording this finding the CIT(A) lost sight of the fact that admittedly the business had been discontinued by the assessee since 1980 -81. Aggrieved against this order of CIT(A), the Revenue went in appeal before the Tribunal which was accepted vide order "6. We have heard the rival submissions, perused the orders of the tax authorities and gone through the material available on record as well as case law and the earlier order of the Tribunal in the case of the assessee. Whereas the assessee has relied on order of the Tribunal, learned Departmental Representative has subsequently raised a point as to the intention of the assessee of enjoying income in the form of rental only and not as business income. We find that facts in asst. yrs. 1980 -81 to 1983 -84 were somewhat different as the assessee had claimed its closure of business only some time ago and there could be an intention of the assessee to restart its business and the assessee was given benefit of such intention as the business had closed down only some time ago. But here in these cases we find that the assessee could not restart its business closed years back and it is also a fact that the assessee ultimately sold the land. Observing the above facts and circumstances of the case, we find that at no point of time during such a long gap in closure of business the assessee was able to prove its intention to restart its business. We have also considered the submissions of learned Authorised Representative that some work could not be started, as managing partner was ill. However, the contention of the assessee does not carry much strength due to the fact that the business was never started after its closure and ultimately the land was sold without being used in business. We, therefore, considering the facts of the case, are of the opinion that the ratio of the decision in the case of Scindia Potteries (supra) is well applicable to the present case as the intention of the assessee to restart its business was not at all in existence despite lapse of 17 years from its closure and the AO was left with no option but to treat the income as income from house property and the CIT(A) was not justified in deleting the finding of the AO based on the finding of the Tribunal almost ten years back in almost different circumstances. We, therefore, restore the orders of the AO in this regard and cancel that of the CIT(A)." ;