Commissioner of Income Tax vs Smt. Nirmal Anand

Arun Kumar, J.—By this petition u/s 256(2) of the Income Tax Act, 1961 (for short "the Act"), the Revenue seeks a direction to the Income Tax Appellate Tribunal (for short "the Tribunal") to state the case and refer the following questions, stated to be of law, arising out of RA No. 374/ Delhi of 1997 in respect of the assessment year 1986-87, for the opinion of this court :

"(1) Whether, on the facts and circumstances of the case and in law, the Tribunal was correct in holding that the Commissioner of Income Tax had wrongly assumed jurisdiction u/s 263 of the Income Tax. Act?

(2) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was correct in cancelling the order passed by the Commissioner of Income Tax u/s 263 of the Income Tax Act ?"

The assessee, an individual, was assessed to Income Tax in respect of the relevant assessment year on a total income of Rs. 4,05,520 as against the returned income of Rs. 3,69,740. However, the Commissioner of Income Tax, after examining the assessment record, came to the conclusion that the said assessment was prejudicial to the interests of the Revenue inasmuch as: (i) the deduction on account of house tax, pertaining to the earlier years but paid during the year was wrongly allowed by the Assessing Officer because the income from immovable property was not assessed under the head "Income from house property" as the assessed was not the legal owner thereof; (ii) the assessed had not disclosed interest income on the amounts lying deposited in her compulsory deposit account ; and (iii) though the assessed had made a disclosure under the amnesty scheme in respect of the wealth, no corresponding disclosure was made under the Income Tax Act. He accordingly set aside the assessment and directed the Assessing Officer to make a fresh assessment.

Aggrieved by the said order, the assessed preferred an appeal to the Income Tax Appellate Tribunal.

While setting aside the said order, the Tribunal observed that in so far as the question of allowability of house tax and disclosure of interest earned on compulsory deposit account was concerned, it was clear from the record that in the past, the amount of interest was brought to tax on receipt basis and the deduction in respect of the house tax was allowed after due application of mind by the Assessing Officer. As regards the issue relating to the source of acquisition of jewellery declared under the amnesty scheme, the Tribunal held that there was no material on record to show that the jewellery was acquired in the previous year relevant to the assessment year under consideration and not in the year as mentioned by the assessed in her declaration under the amnesty scheme and, Therefore, in the absence of any clear finding that income on account of unexplained investment was assessable in the relevant assessment year, it could not be said that the assessment order was prejudicial to the interests of the Revenue.

The Revenue''s application u/s 256(1) of the Act having been dismissed, this petition has been filed.

Having heard learned counsel for the parties, we are of the view that in the light of the afore noted findings recorded by the Tribunal, which are pure findings of fact, not challenged by the Revenue by a specific question, the proposed questions are not questions of law fit for reference to this court.

The petition is accordingly dismissed with no order as to costs.