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Nidimusili Ramana Reddy Vs. Commissioner of Income-tax, Andhra Pradesh - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberCase Referred No. 199 of 1976
Judge
Reported in[1983]139ITR444(AP)
ActsIncome Tax Act, 1961 - Sections 256 and 258
AppellantNidimusili Ramana Reddy
RespondentCommissioner of Income-tax, Andhra Pradesh
Appellant AdvocateS. Dasaratharama Reddi, Adv.
Respondent AdvocateP. Rama Rao, Adv.
Excerpt:
.....to refer that question for its opinion - no case made out for reframing question as prayed by assessee - reassessment proceedings are not barred by limitation as they are covered under section 147 (a) but not by section 147 (b). - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed..........him, the question whether the assessee had disclose the extent and nature of the land or not is a question of fact and in this reference, we are bound by the tribunal's finding of fact, namely, that the assessee had not disclosed the extent and nature of the land. as has been pointed out by the supreme courts in karnani properties ltd. v. cit [1971] 84 itr 547 it is for the tribunal to find the facts and it is for the high court to lay down the law applicable to the facts found. the high court has no jurisdiction to go behind or question the statement of fact made by the tribunal and when the question referred to the high court speaks of 'on the facts and in the circumstances of the case,' it means on the facts and circumstances found by the tribunal and not and circumstances that may.....
Judgment:

Alladi Kuppuswami, J.

1. The assessee is carrying on business in money lending, paddy milling and sale of rice. The assessment for the assessment year 1960-61 (accounting year ending March 31,1960,) was completed on December 31, 1963. While making the assessment for the assessment year 1962-62, the ITO entertained doubts about the correctness of the quantity of paddy credited in the assessee's account as yield from his own agricultural lands. He felt that the yield was in filated. After making the assessment for the assessment year 1961-62, the ITO reopened the assessments for the assessment years 1958-59,1959-60 ano 1960-61. For the assessment year 1961-61 with which we are concerned, the assessee had recorded in his books that he had milled 80 candies of paddy which was obtained from his books that he had milled 80 candies of paddy which was obtained from his own agricultural lands. The ITO observed that the assessee owned only about 36 acres of wet land and according to the adangal registers. The sworn deposition of the village karnam and explanation filed by the assessee in connection with the assessmeno year 1955-57, the assessee could have obtained only 30 candies of paddy for that year from his agricultural lands. there being no change in the circumstances for the assessment year 1960-61. The ITO had concluded that the assessee could have had only 30 candies of paddy available for milling form his own lands for that year also. As the assessee had shown in his books that 80 candies of paddy were available from his lands, the ITO inferred that the assessee should have purchased money at the rate of.Rs 310 per candy, he estimated the value of the paddy unaccounted for at Rs. 15,500 and included the same as the assessee's income from 'Other sources' in his order passed under s. 143 read with s. 147 of the I.T. Act.

2. On appeal before the AAC he held that the net yield from the lands would be 1 1/2 candies per acre after deducting the agricultural expenses and, accordingly, he estimated the net yield for 36 acres at 54 candies. Deducting four candies for personal consumption, he held that the assessee could from, found that the unaccounted paddy would be only 30 candies and not 50 candies as found by the ITO. He, accordingly, granted a relief of by limitation under s. 147(b) and that s. 147(a) was not applicable. The AAC observed that it had been proved that the claim made by the assessee about the yield of paddy from his own lands was excessive and, therefore. There was no substance in the assessee, s contention that s. 147(a) was not applicable and the assessment was not barred by limitation.

3. On further appeal, the Appellate Tribunal also held that the proceedings under s. 147(a) are valid since some of the primary facts for the purpose of judging as to whether the assessee's yield from his agricultural lands as entered in his books of account, was correct had not been disclosed by the assessee to the department. The Tribunal observed that the only material which the assessee had placed before the ITO at the time of the original assessment was that he possessed some lands from which he had received some quantity of paddy, but he did not disclose the most material information regarding the extent of the land possessed by him and the nature of the land which are necessary for the ITO to find out whether the yield credited in the business accounts is correct or not. In this view. The Tribunal held, that the proceedings under s. 147(a) were valid. On merits, however, the Tribunal took note of the fact that the assessee had spent cash also for meeting agricultural expenses and, hence, restricted the addition to Rs. 6,500 as against the addition of Rs. 8.900 made by the AAC.

4. This court by its order dated September 10,1975 in I.T.C. No. 31/73 directed the Appellate Tribunal to draw up a statement of case and it referred the following question of law for the opinion of this court :

'Whether. On the facts and in the circumstances of the case, the reassessment proceedings are barred by limitation under section 147(b) of the Income-tax At or are within limitation under section 147(a) of the Act ?'

5. It is not denied by the learned counsel for the applicant that if there is non-disclosure of a primary fact. The provision that is applicable is s. 147(a) of the I.T. Act and the reassessment proceedings would not in such a case be barred by limitation. In this case, the Tribunal has in its order found as a fact that the assessee did not disclose the most material information regarding the extent of the land possessed by him and the nature of the land which are necessary for the ITO to decide whether the yield from the agricultural land, said to have been received by the assessee, is correct or not. The only material which he had placed before the ITO at the time of the original assessment was that he possessed some lands from which he had received some paddy. In those circumstances, the Tribunal was right in holding that he had not disclosed the primary facts and that the reassessment was covered by s. 147(a).

6. It was, however, argued by Sri Dasaratharama Reddi, learned counsel for the applicant. That the Tribunal was wrong in stating that the assessee had not disclosed the extent of the land or the nature of the land owned by him, the question whether the assessee had disclose the extent and nature of the land or not is a question of fact and in this reference, we are bound by the Tribunal's finding of fact, namely, that the assessee had not disclosed the extent and nature of the land. As has been pointed out by the Supreme Courts in Karnani Properties Ltd. v. CIT [1971] 84 ITR 547 it is for the Tribunal to find the facts and it is for the High Court to lay down the law applicable to the facts found. The High Court has no jurisdiction to go behind or question the statement of fact made by the Tribunal and when the question referred to the High Court speaks of 'on the facts and in the circumstances of the case,' it means on the facts and circumstances found by the Tribunal and not and circumstances that may be found by the High Court. We have, therefore to proceed on the footing as stated by the Tribunal in its order as well as in the statement of case that the assessee did not disclose the most material information regarding the extent of the land possessed by him and the nature of the land. As these primary facts are not disclosed the Tribunal rightly held that s. 147(a) was applicable.

7. If the assessee desired to challenge the finding of fact of the tribunal that he did not disclose the extent and nature of the land he should have asked for a question to be framed that the finding of the Tribunal that he did not disclose the extent and nature of the land was not justified as it was based on no evidence and contrary to the record. But he did not choose to do so. In India Cements Ltd. v. CIT : [1966]60ITR52(SC) the Supreme Court observed that the High Court must accept the finding of fact made by the Appellate Tribunal and, it is for the person who has applied for a reference to challenge those findings first by an application under s. 66(1)(old Act). If he has failed to file an application expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the findings are vitiated for one reason or another, this decision was followed in Hazarat Pirmahomed Shah Saheb Roza Committee v. CIT [1966] 63 ITR 490 part from this, even if he had disclose the extent of the land, if the assessee did not disclose the correct income from the land, we are of the view that he could still be said to have not disclosed a primary fact. It may be that he may have disclosed the BEIH nature and extent of the land and the ITO could, if he had been diligent, have been able to find the true income. But it does not follow that the assessee had disclosed the material facts. In Malegaon electricity Co. (P) Ltd. v. CIT : [1970]78ITR466(SC) . The Supreme Court observed :

'It is true that if the Income-tax Officer had made some investigation, particularly if he had looked into the pervious assessment records, he would have been able to find out what have been able to find out the price in excess of their written down value realise by the assessee. It can be said that the Income-tax Officer if he had been diligent could have got all the necessary information from his records. But that is not the same things as saying that the assessee had placed before the Income-tax Officer truly and fully all material facts necessary for the purpose of assessment'.

8. When the learned counsel for the appellant was confronted with the situation that the assessee had not questioned the findings of the land, he filed an application C.M.P. No. 10860/79 to direct the respondent to produce the assessment and reassessment records of the assessee for the assessment year 1960-61, or in the alternative to call for a supplementary statement of case from the Tribunal incorporating the reasons for reassessment, and to reframe the question for reference as follows :

'Whether, on the facts, and in the circumstances of the case, there is material for the Tribunal to hold that the reassessment proceedings are made under section 147(a) of the Act and not section 147(b) of the Act and the conclusion of the Tribunal that the assessee has suppressed the fact about the ownership of 36 acres of land at the time of original assessment is base on no evidence ?'

9. This application is opposed by respondent.

Regarding the prayer to call for a supplementary statement, under s. 258 of the Act, it is no doubt open to the High Court to refer the cast back to the Tribunal for the purpose of making such additions thereto nor alterations therein as it may direct in that behalf. But this is to be done only if it is not satisfied that the statements in the case referred to it are sufficient to enable it to determine the questions raised thereby. It cannot be said, that in this case, the facts stated in the statement of case are not sufficient to enable us to determine the question. Which is the subject matter of reference. It is well-settled that the High Court cannot send back the case to the Tribunal to find a fresh the facts and embark on a fresh line of enquiry or to take additional evidence. Vide New Jehangir Vakil Mills Ltd. CIT [1958] 37 ITR 11 Petlad Turkey Red Dye Works Ltd. v. CIT : [1963]48ITR92(SC) Keshav Mills Co. Ltd. v. CIT : [1965]56ITR365(SC) and CIT v. Premji Bhimji : [1967]66ITR441(SC) We are therefore not inclined to grant the prayer to call for a supplementary statement of case from the Tribunal. the request for reframing the question by adding the further question, namely whether the conclusion of the Tribunal that the assessee unpresseed the fact about the ownership of the land at the time of the original assessment is based on no evidence is equally untenable. It was, at the instance of the assessee, that the Tribunal drew up the statement of case and referred to this court the question of law arising out of its order. The assessee did not ask the Tribunal to refer the question of law on the finding of the Tribunal that the assessee did not disclose the extent and nature of land is based on no evidence. It is too late for the assessee, at this stated, to ask the High Court to direct the Tribunal to refer that question for its opinion.

10. As we have held that no case is made out for reframing the question as prayed for by the assessee or to ask the Tribunal to furnish a supplementary statement of case, the prayer of the petitioner to call for the order of assessment for the year 1960-61, and the connected records has also to be reflected as they are only intended for the purpose of satisfying the court that the assessee had disclosed the extent and nature of the land in those proceedings. In the result, the question referred to us for a decision is answered in favour of the Revenue as follows :

On the facts and circumstances of the case. Reassessment proceedings are not barred by limitation as they are covered by s. 147(a) of the Act but not by s. 147(a) of the Act but not by s. 147(b) of the Act.

11. There will be no order as to costs.


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