B. Viswanathiah and Co. and others vs Commissioner of Income Tax

Ratnam, J.—T.C.P. Nos. 207 to 209 and 211 of 1990. - In these tax case petitions at the instance of the assessee u/s 256(2) of the Income

Tax Act, 1961, a direction is sought to the Tribunal to refer the following four questions of law :

(1) Whether, on the facts and in the circumstances of the case, there were materials before the Tribunal to hold that the sum of Rs. 3,42,025

represented income of the firm from other sources for the assessment year 1965-66 ?

(2) Whether, on the facts and in the circumstances of the case, the view taken by the Tribunal that the amounts represented income of the firm is a

reasonable view on the facts and in the circumstances of the case ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Hindu undivided family did not possess

cash of Rs. 14,35,834 or any portion thereof on September 24, 1961, and the above conclusion of the Tribunal was reasonable on the facts and in

the circumstances of the case ?

(4) Whether, on the facts and in the circumstances of the case, the assessments for the assessment year 1965-66 is barred by limitation ?

We find from a careful perusal of the order of the Tribunal that it had exhaustively referred to all the explanations put forward by the assessee

and also the improbability of the assessee having been able to command funds as claimed. Though learned counsel for the assessee attempted to

make out that question Nos. 1 to 3 sought to be referred are mixed questions of fact and law, we find that they are purely questions of fact and the

conclusion arrived at by the Tribunal is based upon an exhaustive consideration of all the relevant materials placed by the assessee and also

revealed by the inspection reports, and, cannot, therefore, be stated to be perverse. We are, therefore, of the view that questions No. 1 to 3

sought to be referred cannot be regarded as questions of law justifying a reference of those questions.

In so far as the fourth question is concerned, the opening words of section 153(2A) of the Act show that this is applicable only with reference to

proceedings for an assessment in relation to the assessment year commencing on the 1st day of April, 1971, and subsequent assessment years. A

plain reading of section 153(2A) with section 153(3) of the Income Tax Act, 1961, shows that the period of limitation prescribed in those

provisions apply only with reference to the assessment years commencing on and after April 1, 1971, and not for the earlier assessment years with

which we are concerned in these tax case petitions. Under these circumstances, no referable question of law can be said to arise out of the order

of the Tribunal. These tax case petitions are, therefore, dismissed. No costs.

T. C. P. No. 210 of 1990 :

In this tax case petition at the instance of the assessee u/s 256(2) of the Income Tax Act, 1961, a direction is sought to the Tribunal to refer the

following questions of law for the opinion of this court :

(1) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified and had materials to hold that the

Hindu undivided family did not possess cash of Rs. 14.35 lakhs on September 24, 1961, or even any portion thereof and the above conclusion of

the Tribunal was reasonable on the facts and in the circumstances of the case ?

(2) Whether, on the facts and in the circumstances of the case, the assessment completed for the assessment year 1961-62 on June 26, 1981, is

not barred by limitation ?

In so far as the first question is concerned, the Tribunal had, after referring to all the available materials, found as a fact that the Hindu undivided

family did not possess cash of Rs. 14.35 lakhs or even any part thereof on September 24, 1961, and that would be essentially a question of fact.

The argument of learned counsel for the petitioner that the first question to be raised is a mixed question of law and fact has no substance for, the

Tribunal had dealt with the entire available evidence regarding the claim of the assessee that cash was possessed by the Hindu undivided family and

had negatived that claim not only on the basis of the materials, but also on probabilities. Under these circumstances, the first question sought to be

referred being essentially one of fact, cannot be so referred.

Regarding the second question sought to be referred, what we have stated earlier with reference to the fourth question in T. C. P. Nos. 207 to

209 and 211 of 1990, would apply and, under these circumstances, no referable question of law can be said to arise out of the order of the

Tribunal even in this tax case petition. T. C. P. No. 210 of 1990 is also dismissed. No costs.