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Jesraj Jiwanram Vs. Commissioner of Income-tax, Assam. - Court Judgment

LegalCrystal Citation
Subject;Direct Taxation
CourtGuwahati High Court
Decided On
Case NumberIn pursuance of this order, the Tribunal has stated the case referring the two questions to this Cou
AppellantJesraj Jiwanram
RespondentCommissioner of Income-tax, Assam.
Prior history
RAM LABHAYA C. J. (Ag.).-Messrs. Jesraj Jiwanram, the petitioners in this reference, are an undivided Hindu family. The family firm was dealing in cycles, cycle parts and motor accessories. The assessment with which we are concerned is of the year 1944-45. The accounting period is 1943-44.
The petitioners applied to this Court under Section 66 (2) of the Indian Income-tax Act, praying for a requisition to the Income-tax Appellate Tribunal had declined to refer on the ground that they did not a
Excerpt:
- - , due to short supply during the accounting year, notwithstanding the promulgation of the anti-profiteering ordinance, which could not effectively check black-market. on account of the failure to furnish details of the entire sales, resort to estimate by the income-tax officer was rightly made. in these circumstances, their lordships do not think it would be right to depart from the well established practice of the board to refuse to decide a question which is purely academic. i think it may be regarded as well settled that the court may justifiably decline to answer a question which, will not affect any right or liability of the taxpayer, or where it finds the question unnecessary, irrelevant or purely academic. the tribunal, however, has distinctly stated that those orders should..... ram labhaya c. j. (ag.).-messrs. jesraj jiwanram, the petitioners in this reference, are an undivided hindu family. the family firm was dealing in cycles, cycle parts and motor accessories. the assessment with which we are concerned is of the year 1944-45. the accounting period is 1943-44.the petitioners applied to this court under section 66 (2) of the indian income-tax act, praying for a requisition to the income-tax appellate tribunal had declined to refer on the ground that they did not arise from its order dated 11th june, 1949.the petition came before a division bench of this court consisting of the then chief justice, (thadani, c. j.) and myself. he was of the view that all the questions, of which reference was sought, were questions of law, and that the appellate tribunal could.....
Judgment:

RAM LABHAYA C. J. (Ag.).-Messrs. Jesraj Jiwanram, the petitioners in this reference, are an undivided Hindu family. The family firm was dealing in cycles, cycle parts and motor accessories. The assessment with which we are concerned is of the year 1944-45. The accounting period is 1943-44.

The petitioners applied to this Court under Section 66 (2) of the Indian Income-tax Act, praying for a requisition to the Income-tax Appellate Tribunal had declined to refer on the ground that they did not arise from its order dated 11th June, 1949.

The petition came before a Division Bench of this court consisting of the then Chief Justice, (Thadani, C. J.) and myself. He was of the view that all the questions, of which reference was sought, were questions of law, and that the Appellate Tribunal could be required to state the case and refer those questions to this Court for its decision. My view was that these questions did not arise from the appellate order of the Tribunal. The case was placed before my learned brother Deka, J. He delivered the judgment of the Court, dated 28th June, 1951, by which he directed the Tribunal to state the case and refer to this court the following two questions :-

" (1) Whether on the facts and in the circumstances of the case, the procedure followed by the learned Income-tax Officer in making a fresh assessment after the original assessment had been set aside by the learned Appellate Assistant Commissioner under Section 31 (3) (b) of the Indian Income-tax Act was in accordance with law.

(2) Whether on the facts and in the circumstances of the case, the learned Income-tax Officer was justified in placing on the applicant Hindu undivided family the onus of explaining the amounts standing to the credit of Hanuman Prasad Agarwalla and certain other persons in the books of account of local banks and traders and in adding the said amounts to the total income of the said Hindu undivided family after treating them as omissions of sale and income from other sources not disclosed."

"Whether on the facts and in the circumstances of the case, the Income-tax Officer was right in going into the question of cash credits appearing in the names of the various members of the Hindu undivided family and relying on them in making an estimate."

In regard to the second question, the submission made is that it does not arise.

The facts stated are as follows :-

The family firm of the assessee was originally assessed on an income of Rs. 1,67,472 by order of the Income-tax Officer, dated 31st March, 1945. The assessment was under Section 23 (3) of the Income-tax Act. The assessees accounts were not relied on and the assessment was based on estimate. On appeal, this order was set aside by the Appellate Assistant Commissioner. He found the assessment had been "hastily made without proper scrutiny of accounts and other materials available." These observations applied to the cycle department. In regard to the motor department, the Assistant Commissioner found that the estimate was made in a "slipshod way without caring to go into further details into the accounts and other available matter." Setting aside the assessment, he directed the Income-tax Officer to make a fresh assessment on the lines indicated in the order of the giving the "assessee reasonable opportunity to represent his case." A fresh assessment was made in pursuance of the appellate order. The assessee was called upon to produce particulars of purchases and sales maintained by him regarding both the branches of his business. By this time, certain items of deposits appearing in the names of certain members of the family of Hanuman Prasad Agarwalla, a member of the undivided family of the assessee, had come to the notice of the Income-tax Officer. Notice asking the assessees specifically to explain the items standing in the names of Kailash Prasad, Hanuman Agarwalla, and Indrabati, were also served on the assessee as no corresponding entries appeared in the assessees accounts. The examination of accounts disclosed that in the motor department, the assessee had cash memos for a sum of Rs. 1,13,505 as against a turnover of Rs. 2,82,052. The gross profits disclosed came to Rs. 20,879. In the other department, the assessee could give particulars of sale to the extent of Rs. 29,500 only against a turnover of Rs. 2,96,091. The gross profit disclosed was Rs. 37,234. The accounts were found to be incomplete as profits of the accounting period could not be ascertained in the absence of vouchers for the bulk of the sales. In addition, certain items of credits in the names of different members of the family in the accounts of other local concerns were noticed. The items of deposit made and appearing in the account books of various concerns in the accounting period were as follows :-

(1)

As per account books of Nagarmal Agarwalla in the name of Kailash Prasad ...

Rs. 69,100

(2)

In the name of Hanuman Agarwalla in the ledger of Pookarmal ...

Rs. 42,500

(3)

In the name of Indrabati in the New Standard Bank ...

Rs. 10,000

(4)

In the books of Comilla Union Bank in the name of Miss Sakuntala ...

Rs. 10,000

(5)

In the books of Comilla Union Bank in the name of Kailash Prasad ...

Rs. 5,000

 

Total...

Rs. 1,36,600

On behalf of the assessee, it was stated that they had no knowledge of these accounts and, therefore, had no explanation to offer.

The Income-tax Officer also took into consideration the staggering rise in prices of all motor parts, cycles, cycle parts, etc., due to short supply during the accounting year, notwithstanding the promulgation of the Anti-Profiteering Ordinance, which could not effectively check black-market. In view of these facts, the account books of the assessee were not relied on. The conclusion arrived at was that the books did not reflect the true state of the assessees business. The assessable income was then estimated and in the process a sum of 1 lakh 30 thousand, out of a total of 1 lakh 36 thousand and 6 hundred of the cash credit items, was added to the figures of profits otherwise ascertained. The cash credits seemed to the Income-tax Officer to supply the omission in accounts. The whole of the Income-tax Officers order, marked Annexure "C" has been made part of the statement of the case.

This order of the Income-tax Officer was again appealed from. Two contentions was raised before the Appellate Assistant Commissioner in appealing. They are as follows :-

(1) That the learned Income-tax Officer has erred in basically changing the ground for the assessment from percentage to cash credits in the names of the alleged members of the family.

(2) That the learned Income-tax Officers has erred in dragging the alleged members of the family in support of his assessment without proper and sufficient enquiry into their connection with the family.

The Appellate Assistant Commissioner found that the order of remand had been complied with. Full opportunity had been given to the assessee to explain his books, as also possible omissions in them indicated by items of credit discovered in favour of the members of the family.

The appellate order dated 30th April, 1947, also has been bodily incorporated in this statement by its being annexed as Annexure "D" to it. The Assistant Commissioner reproduced the whole of the explanation given by the assessee before the Income-tax Officer in his order. He also considered the affidavits filed at that stage of the case. He found that the "explanation offered was not at all satisfactory". He also found that "Hanuman Prasad Agarwalla was the managing member of the business at Jorhat and in the accounting period he was admittedly a member of the Hindu undivided family. Excepting the family business, Hanuman Prasad was not engaged in any activities and, as such, the transactions in the name of Hanuman Prasad or in the name of his son, daughter and wife should have been explained to the Income-tax Officer when he gave them opportunity for the same. The affidavits filed then were held to be of no value at this stage, as no attempt was made even then to explain the source of money credited in the names of the family members."

The appeal was dismissed and the appellate order was again appealed from. Before the Appellate Tribunal, the assessment was challenged on the sole ground "that the Income-tax Officer should not have added back any cash credits when the scope of the enquiry was limited to the accounts of the appellant." This contention did not prevail. The Tribunal held that the procedure adopted by the Income-tax Officer was correct."On account of the failure to furnish details of the entire sales, resort to estimate by the Income-tax Officer was rightly made. In making the estimate, the Income-tax Officer was further justified in taking into consideration several credits standing in the names of the various members of the family which, however, did not find place in the account books of the assessee and which were not properly explained."

As stated above, it has been pointed out that question No. 2 of the reference was never raised before the Tribunal, and question No. 1 can be said to arise in a limited form. It has been added that the finding of this Court that the two questions arise is not questioned, and the suggestion that question No. 1 arises only in a limited form is made, as the expression of opinion by this Court as to those questions was only provisional.

Dr. Pal has argued that where the Appellate Tribunal declines to make a difference and on the petition of the assessee, the High Court makes a requisition for the statement of the case and directs certain questions of law to be referred, the order is binding on both the parties. It is, therefore, not within the competence of the Tribunal to urge that these questions do not arise. If the Tribunal could re-agitate the matter by suggestions or submissions, the same right will have to be conceded to the other party, with the result that the finality of the order will be considerably impaired. In support of his contention, he has relied on the observations of the learned Chief Justice of the Bombay High Court in Narayandas Kedarnath v. Commissioner of Income-tax, Central [1952] 22 ITR 19. These observations were to the effect that it is not for the Tribunal to consider whether the questions framed by the Court are proper questions or not.

Dr. Pal has also drawn our attention to the remarks of Chakravartti, J., as he then was, in Chainrup Sampatram v. Commissioner of Income-tax, West Bengal : [1951]20ITR484(Cal) ., which have an important bearing on the question. The relevant remarks appear at page 496. They are as follows :-

"Thereafter, this Court, acting under Section 66 (2), has directed the question to be referred. In doing so, the High Court must necessarily have come to the conclusion that the decision of the Tribunal in declining it refer the question was not correct; in other words, the Tribunal was not right in holding that the question did not arise out of its order."

According to the learned Judge, even if the question does not really arise, the Court cannot refuse to entertain it as that would amount to overriding the earlier decision of a Bench of the Court. In his opinion, where the Court is confronted with such a situation, the question must be dealt with and answered on the merits. The learned Judge has also expressed the view that if the question does not arise in the case of the Court may, on that ground, decline to answer the question. This is another way of saying that if, on facts, it is found that it is not necessary to answer the question the Court may decline to do so.

Without expressing any opinion on the question whether a decision of the question referred on the merits is a way out of the difficulty, it may be said that this method of getting over the difficulty does not exhaust the alternatives available to the Court where it finds that the question not arising out of the order of the Tribunal, has been referred by the Tribunal in pursuance of a requisition from the High Court under Section 66 (2). It may not be open to the Bench which hears a reference to consider whether the order which the High Court had made under Section 66 (3) directing the Commissioner to state the case, was valid, (vide Thrikamji Jiwandas v. Commissioner of Income-tax [1924] 1 I TR 406., and Khemchand Ramdas v. Commissioner of Income-tax [1934] 2 ITR 216, but the Court is not bound to answer questions where, for instance, as in Commissioner of Income-tax, West Bengal v. Calcutta Agency Ltd. : [1951]19ITR191(SC) ., the Tribunal improperly or incorrectly made a reference in violation of the provisions of the statute, or where, as in Madanlal Dharnidharka v. Commissioner of Income-tax, Bombay City : [1948]16ITR227(Bom) ., the question had not been dealt with by the Tribunal but was actually raised and had been referred to the Court for its opinion. In the latter case, it was held that though it was not competent to any of the parties to challenge the jurisdiction of the Court to answer the question, the Court would refuse to give its opinion if it found the question irrelevant or unnecessary. It is noteworthy, however, that in both these cases the references were made by the Tribunal. They were not requisitioned by the Court.

In Sir Rajendra Narain Bhanja Deo v. Commissioner of Income-tax [1940] 8 ITR 495., the assessee raised the question whether on the terms of a certain kaoolnama, the assessees income from his raj was exempt from taxation. The Commissioner refused to submit any reference to the High Court, but the High Court directed him to refer the question raised. The Commissioner, while drawing up the statement of the case, pointed out that the document relied on was merely of academical interest, and did not affect the matter at issue. The High Court answered the question in the negative. On appeal, their Lordships of the Privy Council held that the document in question did not come into play at all. The question was purely academic and the High Court should have refused to answer. The contention was disposed of in the following terms :-

"In these circumstances, their Lordships do not think it would be right to depart from the well established practice of the Board to refuse to decide a question which is purely academic... In their Lordships opinion, both the respondent and the High Court ought to have refused to answer the question referred to it leaving it to the appellate to take such steps as he might be advised to obtain the reference to the High Court of such other question with regard to liability to income-tax as may, in fact, arise under the material settlement."

In this case, the document in question was not material. The question was purely academic, but this is not all. The observations of their Lordships are also an authority for the proposition that even if the High Court proposes a question at the mandamus stage and requires the Commissioner to state a case thereon, it may, and, as a matter of fact, should decline to answer it if it finds that it is not necessary to answer the question.

The Privy Council decision above referred to was followed in Seth Gurmukh Singh and Another v. Commissioner of Income-tax, Punjab ., and it was held that the assumptions of facts made by the High Court at the mandamus stage are not binding on the Commissioner and it is open to him to point out their inaccuracy while making the reference.

The authorities considered above emphasise different aspects of the same question and do not, in my opinion, disclose any essential conflict of principles. The propositions which may be deduced from these cases are as follows :-

That when a Bench of the High Court directs a Tribunal to state a case, it is not open to the parties or to that Bench or another Bench of the High Court to question the validity of the order. The competency or the power of a High Court to issue a mandamus can be questioned at the mandamus stage before its issue, and not when the reference is actually heard (vide Thrikamji Jiwandas v. Commissioner of Income-tax [1924] 1 ITR 406., Khemchand Ramdas v. Commissioner of Income-tax [1934] 2 ITR 216., and Tribune Trust, Lahore v. Commissioner of Income-tax . But the Court at the hearing, even though it has ordered the Tribunal to state a case on any question, retains the jurisdiction to decline to answer the question which is purely academic, or where the question is unnecessary or irrelevant. Also where a Tribunal improperly or incorrectly makes a reference in violation of the provisions of the statute, the Court is not incapable of entertaining an objection to the statement of the case if it comes to the conclusion that it should not have been stated. In such circumstances, the Court is under no obligation to express an opinion on the question referred (vide Commissioner of Income-tax, Madras v. O. RM. M. SM. SV. Sevugan : [1948]16ITR59(Mad) . In Madanlal Dharnidharka v. Commissioner of Income-tax, Bombay City : [1948]16ITR227(Bom) ., the learned Chief Justice of the Bombay High Court observed that "it was not open to a party to challenge the jurisdiction of the Court to answer a question which has been raised by the Tribunal; when the Tribunal wants advice on a technical question of law, it is the statutory duty of the Court to give that advice to the Tribunal." He, however, qualified the proposition by observing that a particular question may be irrelavant or unnecessary and the Court may refuse to give its opinion on such a question. Tendolkar, J., without expressing any difference of opinion from the Chief Justice, observed that if on the application of any of the parties a question has been referred to Court by the Tribunal, it is the duty of the Court to decide it. This is manifest. The learned Judge, however, was emphasising that the parties had no right to object to the reference. His observations are as follows :-"The section does not confer power either on the assessee or the Commissioner to go to Court and urge that the case should not have been stated." I think it may be regarded as well settled that the Court may justifiably decline to answer a question which, will not affect any right or liability of the taxpayer, or where it finds the question unnecessary, irrelevant or purely academic. It follows that it would be open to the Tribunal to point out, when stating the case, that the question which it has been directed to refer to the Court, is purely academic or will not have any effect on the decision of the case and is, therefore, unnecessary or irrelevant.

Dr. Pal, the learned advocate for the assessee, has not pressed for an answer to the first question. The question was whether on the facts and in the circumstances of the case, the procedure followed by the Income-tax Officer in making a fresh assessment after the original assessment had been set aside by the Assistant Commissioner under Section 31 (3) (b) of the Indian Income-tax Act, was in accordance with law. The objection was that the procedure followed by the Income-tax Officer in his assessment after remand was not in accordance with law. The learned counsel did not try to point out any contravention of law which the procedure followed by the Income-tax Officer may have involved. We, therefore, decline to answer this question. He has also wisely resisted the temptation of asking for an answer to the question in the modified form proposed by the Tribunal.

The learned counsel has strenuously pressed for an answer to the second question. His grievance, so far as this question is concerned, is that the onus of explaining certain sums standing to the credit of Hanuman Prasad Agarwalla, his wife, son and daughter in the books of accounts of local banks and traders, was placed on the assessee, and this was not justified in law. He has argued that though it has not been expressly stated by the Income-tax Officer or the Assistant Commissioner that the onus was on the assessees their entire approach to the question indicated that they thought the onus of showing that these items did not belong to the family was on the assessees. A notice was served on the assessee to explain the nature and the origin of these items. On behalf of the family, it was pleaded that t items did not belong to it, and that, therefore, they were not in a position to give any information. He points out that barring the fact that these items stood in the names of Hanuman Prasad Agarwalla, his wife, daughter and son, and that Hanuman Prasad was a member of the joint Hindu family in the accounting period, there was no evidence available to the taxing authorities for holding that these sums represented concealed profits or incomes of the joint family.

He based this contention on facts stated by the Tribunal in the statement of the case submitted to this Court and contended that the advisory jurisdiction of this Court is to be exercised on facts contained in that statement alone, and that it would not be correct to discover or rely on facts not contained in the statement itself. His purpose was to exclude any reference to the orders of the Income-tax Officer and the Assistant Commissioner for the purpose of finding out the basis of their findings. Those orders have been incorporated in the statement made to us by their having been annexed to the statement. The learned advocate seemed to press that by merely enclosing them as annexure they could not be regarded as part of the statement. The Tribunal, however, has distinctly stated that those orders should be treated as parts of the statement. A proper way of relying on facts found in those orders was to take out extracts from those orders and make them part of the statement, either by incorporating them in the statement or by enclosing them as annexure. Annexing orders bodily and thereby making them parts is not an approved way of including findings arrived at in those orders in the statement of facts. But merely because the findings contained in those orders and the reasons for those findings have not been made part of the record in a way that would have been unexceptional, the facts found in those orders, which the Tribunal obviously wanted to rely on, may not be excluded from consideration.

Mr. Iyengar, the learned counsel for the Commissioner of Income-tax, Assam, has frankly conceded that there is no legal presumption that sums standing in the name of a member of a joint Hindu family belong to the joint family. There would, therefore, be no onus on the assessee to show that items standing in the name of a member of the joint family do not belong to it. Mr. Iyengar, however, urges that the question whether the sums standing to the credit of Hanuman Prasad, his wife and children belonged to the joint family or not was decided not on any view of onus, right or wrong, but on the facts of the case. The decision was on the merits, and the question of onus did not enter into the consideration of the taxing authorities as a determining factor. He has urged that it is not necessary, in these circumstances, to answer the question. There is no dispute as to the allocation of onus and no controversy centres round it, nor has it influenced the decision of the case against the assessee. We have not been able to discover from the orders of the Income-tax Officer and the Assistant Commissioner any statement showing that onus was the determining factor in regard to the decision of the disputed question, but Dr. Pal, however, has urged that even though no articulate expression has been given to the view, the approach of the taxing authorities indicated that their view was that the onus was on the assessee to explain the cash credits in question, and this consideration weighed with the authorities to a considerable extent.

An examination of the facts stated by the Tribunal in the statement submitted to us alone would be enough to show that the contention, though very ingenious and very ably supported, is not well-founded.

After the remand and before making a fresh assessment, the Income-tax Officer called upon the assessee to give particulars of his purchases and sales in both the departments of his business. At the same time notices were served upon him to explain the items of deposit appearing in the names of Hanuman Prasad and members of the family in the books of local merchants and books. A scrutiny of the accounts disclosed that cash memos were available for sales in the motor department only to the extent of Rs. 1,13,500. In the other department, particulars could be given of sales to the value of Rs. 29,500. The books were incomplete. They did not furnish material for an accurate assessment of profits. In these circumstances, the conclusion arrived at was that the assessees books alone could not form the basis for ascertaining assessees profits. The unusual rise of prices of motor parts, cycles, and cycle parts during the accounting period was also noticed. The black-marketing that was rampant notwithstanding the promulgation of the Anti-Profiteering Ordinances, and the low rates of profits disclosed in the books, under the prevailing conditions, were also taken into account. In addition to these facts, there was the failure on the part of the assessee to offer any reasonable explanation for the existence of cash credits in the names of Hanuman Prasad and other members of his family. A sum of Rs. 5,000 was in the name of Kailash Prasad, son of Hanuman Prasad, a sum of Rs. 10,000 stood in the name of Miss Sakuntala, daughter of Hanuman Prasad, and a sum of Rs. 10,000 stood in the name of Indrabati, wife of Hanuman Prasad, and a deposit of Rs. 69,100 was made in the name of Kailash Prasad in the books of Nagarmal Agarwalla. There was also a deposit of Rs. 42,500 in the name of Hanuman Prasad Agarwalla in the books of Pookarmal. Only one item stood in the name of Hanuman Prasad; other items stood in the names of his wife and children. At the appellate stage, he claimed that all these sums belonged to him. Dr. Pal has also stated that these items may be treated as belonging to Hanuman Prasad. Why it became necessary for Hanuman Prasad to make all these deposits in so many different names in the accounting period, was never explained. The source from which the money came also remained undisclosed. Assuming that Hanuman Prasad had separate sources of income, it should not have been difficult for the assessee or for Hanuman Prasad to disclose them. The failure on the part of the assessee and Hanuman Prasad to offer any intelligible explanation of these cash credits was an additional circumstance that was taken into account for rejecting the accounts of the assessee.

In the circumstances of this case, it would not be correct to say that the decision of the case rested on any wrong view of the onus. In fact, the onus of the burden of proof was not the basis of the decision. The accounts were found incomplete. The bulk of the sales were not supported by vouchers. From these accounts, a correct estimate of the profits could not be formed. The absence of vouchers was considered significant in view of the very high price of motor and cycle parts which prevailed during the accounting period, notwithstanding the highly penal provisions of the Anti-Hoarding and Profiteering Ordinances. The cash credits discovered in the names of different members of the family of Hanuman Prasad indicated the possibility of their representing concealed profits. The picture that the Income-tax Officer had framed in his mind before he had any knowledge of these cash credits also seemed to justify the view that these items could possibly be withdrawals from the family income with a view to evade the tax payable under the law. The income in the first assessment which was reversed on appeal was estimated at Rs. 1,67,472. If the items of cash credit which were discovered after the remand were added to the figure of profits otherwise ascertained, it would come to Rs. 1,67,287. There would be just a difference of about Rs. 200 between the original assessment and the estimate made after remand. It would thus appear that the original estimate of the Income-tax Officer was very near the mark and the discovery of cash credits naturally indicated to him the possibility of an attempted evasion. Before adding any part of these cash credits to profits, he gave the assessee a notice to explain. It was not that the demand for an explanation was made merely on the basis of Hanuman Prasads connection with the family. There was other material which justified this course. It could not have been contended, and it must be said in fairness to Dr. Pal, that he did not contend that the Income-tax Officer had no authority to ask for such an explanation under any circumstances. It is true that there is no onus in law on a Hindu family to show that certain items of deposits standing in the names of different members of the family do not belong to it, but it cannot be denied that such items may represent family capital or the income of the family. Acquiring and holding of property and assets in the names of members of joint Hindu families is not uncommon. Where the preponderance of circumstances suggests withholding of information bearing on the income of the family, and items are discovered which stand in the names of members of the family, including minors and females, who have no ostensible sources of income the need for demanding and explanation becomes apparent. At some stage of the proceedings, this had to be done. The items could not be utilised as giving rise to an inference against the assessees unless they were afforded a reasonable opportunity of explaining them. In asking for an explanation, the Income-tax Officer offered the opportunity in the discharge of a legal duty. It is noteworthy that at the appellate stage (after remand) the ground urged was not that there was any wrong allocation of onus or that the issue was decided on that basis, but that the Income-tax Officer had erred in dragging the alleged members of the family in support of his assessments without proper and sufficient enquiry into the matter of their connection with the family. It would appear that what was pressed was that sufficient enquiry had not been made. The complaint was not at all about onus. It was about the inadequacy of the investigation. At this stage, fresh affidavits were filed. Even these were considered and even these affidavits did not improve the position. All that was stated was that the assessee was not interested in the items. How all these items without any background or history suddenly appeared in the account books of different concerns, as deposits in favour of Hanuman Prasad and members of his family, was not explained, even at that stage. It is in these circumstances that the possibility that these cash credits represented concealed profits was treated as a probability. The accounts, therefore, were not made the basis for ascertainment of profits, and the assessment made on estimate was allowed to stand.

The assessment in these circumstances must be regarded as having been made on facts found or rather on the merits of the case than on any view of onus.

In Robins v. National Trust Company [1927] A C 515., Viscount Dunedin, delivering the judgment of their Lordships of the Privy Council described the function of onus in the following terms :- "Onus is always on a person who asserts a proposition or fact which is not self-evident. To assert that a man who is alive was born requires no proof. The onus is not on the person making the assertion, because it is self-evident that he had been born. But to assert that he was born on a certain date, if the date is material, requires proof; the onus is on the person making the assertion. Now, in conducting any inquiry, the determining tribunal, be it Judge or Jury, will often find that the onus is sometimes on the side of one contending party, sometimes on the side of the other, or as it is often expressed, that in certain circumstances, the onus shifts. But onus as a determining factor of the whole case can only arise of the tribunal finds the evidence pro and con so evenly balanced that it can come to no such conclusion. Then the onus will determine the matter. But if the tribunal, after hearing and weighing the evidence, comes to a determine conclusion, the onus has nothing to do with it, and needed not be further considered."

This view was followed in Harmes and Another v. Hinksons AIR. 1946 P C 156., and the strict meaning of the term "onus probandi" was explained. It was observed that if no evidence is given by the party on whom the burden is cast, the issue must be found against him. But it was qualified by the proposition as laid down in Robins v. National Trust Company [1927] A.C 515. The propositions laid down in the two cases referred to above are axiomatic. There can be no doubt that onus as a determining factor comes into play where either there is no evidence on either side or where it is equally worthless or where it is equally balanced. Where such is not the case and all available evidence is considered without reference to onus and, without relying on the circumstance that the onus lies on a particular party, the issue is determined on facts, and the onus cannot be said to have influenced the decision. This is exactly what has happened in this case. At a certain stage of the enquiry the cash credits came to the notice of the Income-tax Officer. He had evidence pointing to the conclusion that the account books of the assessee did not represent the true state of affairs. These items of cash credits seemed to complete the picture. He gave the assessee a chance to explain. After a full consideration of the circumstances a decision was given. This decision was on facts and obviously was not influenced by any view of onus under the law. In these circumstances, it is not necessary to answer the question.

In Jitanram Nirmalram v. Commissioner of Income-tax [1951] 19 ITR 501., one of the questions referred was "whether the Appellate Tribunal was justified in giving a finding as to whether Rs. 2,75,178 represented secreted profits from business assessable in 1945-46 before the completion of the examination of the accounts as directed by the remand order of the Assistant Commissioner of Income-tax". The assessee in this case was not a joint Hindu family firm. It was a firm with 3 partners. It was held that the explanation of the assessee in regard to the cash credit figure was false and that they represented secreted profits of the business, and, therefore, were liable to be assessed as income of the firm. The finding, it was held, had been arrived at after a full consideration of all the materials bearing on the point. The Tribunal had the jurisdiction to come to that conclusion and was justified on the facts in doing so. In the present case, the assessee is a joint Hindu family firm. The competency of the taxing authorities to treat the cash credit items as representing concealed profits of the assessee is undoubted. It has not even been challenged.

For reasons given above, we think it is not necessary to answer the second question also and we decline to answer it. The reference is disposed of accordingly.

DEKA J.-I agree.

Reference not answered.


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