SAMPAT RAM BUDHMAL vs COMMISSIONER OF INCOME TAX.

B. R. ARORA, J. :

The assessee, by this application under s. 256(2) of the IT Act has prayed that the Tribunal, Jaipur Bench, Jaipur, may be directed to refer the following questions of law for the opinion of the High Court :

"(1) Whether the ITO was justified in initiating and completing the reassessment proceedings under s. 147(a)/148 of the Act for asst. yr. 1974-75 in the case of the assessee and whether the Tribunal was right in law in upholding the same ?

(2) Whether the Tribunal was justified in holding that due to failure on the part of the assessee to disclose fully and truly all material facts, income had escaped assessment and the proceedings initiated under s. 147(a) were valid ?

(3) Whether the Tribunal was justified in holding that, in view of the Supreme Court decision, the provisions of s. 147(a) get automatically attracted to the facts of the present case, when the facts of the present case and those before the Honble Supreme Court were entirely distinguishable and that having been pointed out before the Tribunal, whether the Tribunal was justified in holding that the questions of law arising out of the order of the Tribunal were purely academic and need not be referred ?"

The assessee, for the asst. yr. 1974-75, was assessed by the ITO on 16th Jan., 1975. The case of the assessee was thereafter reopened as according to the ITO, certain income escaped assessment. After serving a notice on the assessee, the ITO, A Ward, Churu, completed the assessment under s. 142(2)/147(a) of the Act vide its order dt. 18th Feb., 1984. Dissatisfied with the order dt. 18th Feb., 1984, the assessee preferred an appeal before the CIT(A), Jodhpur, who, vide his order dt. 27th Sept., 1985 allowed the appeal filed by the assessee and held that the reassessment proceedings for the asst. yr. 1974-75 are not sustainable as all the relevant facts were within the knowledge of the ITO when the original assessment were made and simply because these were not shown by the appellant-assessee in his income but known to the ITO, the reassessment proceedings cannot be held to be valid. According to the CIT(A), s. 147(a) cannot be invoked for remedying the patent failure by the ITO while completing the original assessment. He, therefore, cancelled the reassessment proceeding for the asst. yr. 1974-75. The Revenue, aggrieved with the order passed by the CIT(A) preferred an appeal before the Tribunal, Jaipur Bench, Jaipur, and the Tribunal, by its judgment dt. 16th Dec., 1986, relying upon the judgments of the Supreme Court reported in Indo-Aden Salt Mfg. and Trading Co. Pvt. Ltd. Vs. Commissioner of Income Tax, Bombay, A.L.A. Firm Vs. Commissioner of Income Tax, Madras, and Central Provinces Manganese Ore Co. Ltd. Vs. I.-T.O., Nagpur, allowed the appeal filed by the Revenue and restored the order of the ITO. The assessee thereafter moved an application under s. 256(1) of the Act for referring two questions of law mentioned in the application for the opinion of the High Court. The learned member of the Tribunal, after considering the arguments, refused to refer the questions on the ground that they are purely of academic interest and observed as under :

"Since the finding of fact is that the assessee had failed in his primary duty and this being further decided by Their Lordships of the Supreme Court (supra) both the questions become purely of academic interest and, therefore, the reference does not survive, hence, rejected."

It is contended by the learned counsel for the assessee that the questions of law do arise out of the judgment passed by the Tribunal and it was not justified for the Tribunal to decide the matter at that time while refusing to refer the questions and as the questions of law do arise from the order passed by the Tribunal, the Tribunal should have made reference for the opinion of the High Court.

We have considered the submissions made by the learned counsel for the parties.

The controversy involved in the present case stands squarely covered by the judgment of the Supreme Court reported in Indo-Aden Salt Mfg. and Trading Co. Pvt. Ltd. Vs. Commissioner of Income Tax, Bombay, The Tribunal, while relying upon the judgments of the Supreme Court, also held that due to failure on the part of the assessee to disclose fully and truly the income that the income escaped assessment and, therefore, the proceedings under s. 147(a) of the Act are maintainable.

Since the controversy raised in this case stands squarely covered by the judgment of the Supreme Court, it will be a futile exercise to direct the Tribunal to refer the questions for the adjudication to this Court.

In this view of the matter, we do not find any merit in this application under s. 256(2) of the Act and the same is hereby dismissed.