RAM CHANDRA PRASAD BHADANI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A statement of the case has been submitted by the Tribunal, Patna Bench, Patna, under S. 66(1) of the Indian IT Act, 1922 (hereinafter referred to as the 1922 Act "), although the reference application was filed under S. 256(1) of the INCOME TAX ACT, 1961 (hereinafter referred to as " the 1961 Act "), referring the following questions of law for the opinion of this Court :

(2.) BEFORE the facts are taken up, it is necessary to point out that the question of assessment relates to the assessee, Chatturam. Chatturam died during the pendency of the Taxation Case No. 47 of 1976 and an appli cation was filed by Ram Chandra Prasad Bhadani, son of Chatturam, claiming that Chatturam, the petitioner, in Taxation Case No. 47 of 1976, had died leaving behind several sons and daughters who are members of the Hindu joint family and Ram Chandra Prasad Bhadani is the eldest son of Chatturam and he is the Karta of the family and he prayed for per mission to prosecute Taxation Case No. 47 of 1976 as legal representative of the deceased assessee, Chatturam. The prayer was allowed. It is under these circumstances that Ram Chandra Prasad Bhadani has been impleaded as the petitioner being the legal representative of Chatturam.

(3.) NOW , the facts of the present case may be briefly stated. Originally, the assessment in this case was made under S. 23(3) of the 1922 Act on June 14, 1949. This order was rectified in 1950 and the EPT as well as the business profits tax was allowed as a deduction as provided under S. 12(1) of the EPT Act, 1940, and S. 10 of the Business Profits Tax Act, 1947. Later on, the ITO found that the Tribunal, by its order dt. November 30, 1970, decided that the income of Rs. 1,27,000 in the hands of the deceased assessee, Chat turam, was from undisclosed sources and not from business and so no excess profits tax and business profits tax was leviable on this income. As a consequence of this order of the Tribunal, the ITO proceed ed to rectify the earlier assessment as rectified by a further rectification under S. 155(3) of the 1961 Act. By this rectification order, the deduction allowed in respect of excess profits tax and business profits tax was withdrawn. This order of the ITO has been annexed and marked as Annexure " A " forming part of the statement of the case.