Commissioner of Income Tax vs Balwant Singh Arora

Gokal Chand Mital, J.—This order will dispose of Income Tax References Nos. 57 and 82 of 1981, as they arise between the parties relating to the same assessment year and out of one assessment order passed by the Income Tax Officer.

For the assessment year 1971-72, the assessee filed a return on October 20, 1971, u/s 139(4) of the Income Tax Act, 1961 (hereinafter called "the Act"), showing an income of Rs. 12,875. The assessee filed a second return on March 28, 1974, showing an income of Rs. 13,075. The Income Tax Officer framed the assessment on March 29, 1975, at Rs. 66,865. In appeal, the assessee took up an additional ground before the Appellate Assistant Commissioner to the effect that the assessment was time-barred. For some reason, the Appellate Assistant Commissioner did not consider the additional ground of limitation but on merits deleted the additions made by the Income Tax Officer. The Revenue felt aggrieved and took the matter in appeal before the Income Tax Appellate Tribunal, Chandigarh, and the assessee filed cross-objections on the question of limitation. The Tribunal, by its order dated December 15, 1979 (copy of which is not available in the paper book), sent the matter covered by the cross-objections on the point of limitation to the Appellate Assistant Commissioner and directed that the appeal filed by the Revenue would be disposed of after the decision by the Appellate Assistant Commissioner. The Appellate Assistant Commissioner held that the assessment was not time-barred as it was a case of concealment of income and the case came within the ambit of Section 153(1)(b) of the Act as, thereunder, the assessment could be framed within eight years.

It is worthwhile to note that the appeal of the Revenue was pending before the Tribunal against the order of the Appellate Assistant Commissioner deleting the additions. Against the order of the Appellate Assistant Commissioner on the basis of the remand order holding the assessment to be within time, the assessee filed an appeal before the Tribunal. The Tribunal took up the assessee''s appeal first and by an exhaustive order dated November 27, 1980, concluded that the assessment was beyond limitation and allowed the appeal. Curiously enough, the appeal filed by the Revenue still remained pending and was taken up on January 14, 1981, and on that date, the appeal was dismissed as infructuous in view of the order of the Tribunal dated November 27, 1980, passed in the assessee''s appeal on the point of limitation. At the instance of the Revenue, the following two questions have been referred for the opinion of this court, one in each of the two references :

Income Tax Reference No. 57 of 1981 :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in law in cancelling the assessment on the ground that it was barred by limitation and, as such, invalid ?"

Income Tax Reference No. 82 of 1981 :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in dismissing the departmental appeal as infructuous without considering it on merits ? "

On a consideration of the matter, we are of the opinion that it would have been just and proper that both the appeals were heard and decided by the Tribunal at one and the same time and were disposed of by a common order. The reason is not far to seek. The point for consideration in both the appeals was whether the case fell within Clause (c) of Sub-section (1) of Section 271 of the Act for the purpose of Section 153(1)(b) or not. If it did, then, the assessment order would be within limitation and for coming to this conclusion it had to be found out whether the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income. If this matter was to be decided against the Revenue, then, of course, the limitation of eight years would not be applicable. Under the circumstances, the Tribunal erred in not deciding the appeals together and in dismissing the appeal filed by the Revenue as infructuous.

For the reasons recorded above, we direct that I. T. A, No. 364 of 1980 and I.T.A. No. 147 of 1977-78 filed by the parties for the assessment year 1971-72 be heard by the Tribunal at one and the same time and be decided together by a common order and the parties would be at liberty to raise all points in support of their respective appeals and the Tribunal will render fresh decision thereon in accordance with law, without being influenced by the orders dated November 27, 1980, and January 14, 1981. In view of the above, the questions referred in both the references are returned unanswered, leaving the parties to bear their own costs.