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Commissioner of Income-tax Vs. U.C. Mahatab - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 140 of 1975
Judge
Reported in[1983]144ITR51(Cal)
ActsIncome Tax Act, 1961 - Sections 27, 171(2), 256(1), 260(1) and 263; ;Hindu Succession Act, 1956
AppellantCommissioner of Income-tax
RespondentU.C. Mahatab
Appellant AdvocateA.K. Sengupta and ;M.L. Bhattacharji, Advs.
Respondent AdvocateR.C. Kar and ;Sanjoy Bhattacharji, Advs.
Excerpt:
- .....by including the income from the properties at nos. 2 and 4, netaji subhas road, calcutta, in the assessee's income.3. before the tribunal reliance was placed on behalf of the assessee on the order of the tribunal in the case of the assessee for the earlier assessment years, in i.t.a. nos. 1264 to 1268 of 1971-72. in view of the above order, the tribunal in this year also held that the income from properties at nos. 2 and 4, netaji subhas road, calcutta, did not belong to the assessee and the income was not assessable in the hands of the assessee. this judgment was delivered on the assumption of fact that the assessee was the holder of an impartible estate known as ' burdwan raj ' and these two properties formed part of the impartible estate. neither the assessee nor the revenue raised.....
Judgment:

Suhas Chandra Sen, J.

1. The following question of law Under Section 256(1) of the I.T. Act, 1961, has been referred by the Tribunal to this court :

' Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income from properties at Nos. 2 and 4, Netaji Subhas Road, Calcutta, no longer belonged to the assessee and the income therefrom is not includible in the total income of the assessee '

2. The dispute in this case relates to the properties at Nos. 2 and 4, Netaji Subhas Road, Calcutta. The ITO had completed the assessment of the assessee for the assessment year 1966-67 without including the income from those properties. The Addl. CIT, West Bengal, Under Section 263 of the I.T. Act, 1961, revised that order, as, in his view, the ITO's order was erroneous and prejudicial to the interest of the Revenue. He, therefore, directed the ITO to revise the assessment by including the income from the properties at Nos. 2 and 4, Netaji Subhas Road, Calcutta, in the assessee's income.

3. Before the Tribunal reliance was placed on behalf of the assessee on the order of the Tribunal in the case of the assessee for the earlier assessment years, in I.T.A. Nos. 1264 to 1268 of 1971-72. In view of the above order, the Tribunal in this year also held that the income from properties at Nos. 2 and 4, Netaji Subhas Road, Calcutta, did not belong to the assessee and the income was not assessable in the hands of the assessee. This judgment was delivered on the assumption of fact that the assessee was the holder of an impartible estate known as ' Burdwan Raj ' and these two properties formed part of the impartible estate. Neither the assessee nor the Revenue raised any question about the character of the two properties in dispute in this case before the Tribunal. The only argument on behalf of the Revenue was that the Tribunal's order in the earlier year was erroneous in law and a reference application against that order was pending in the High Court.

4. The question of law raised in the reference for the assessment years 1963-64, 1964-65 and 1965-66 was answered by this court in favour of the Revenue. It was decided in that case that the impartible estate of which the assessee was the holder and which had been in existence before 1968 did not cease to exist on the coming into force of the Hindu Succession Act, I 956. The estate did not vest in the HUF and a partition of the properties amongst the coparceners of the HUF would not be valid. In that case, CIT v. U.C. Mahalab, Maharaja of Burdwan : [1981]130ITR223(Cal) , an argument was advanced on behalf of the assessee that these properties did not form part of the impartible estate and, as such, werenot to be included in the income of the assessee as an individual as has been sought to be done. It was dealt with at p. 235 of the report as follows :

' It may be mentioned that this point was not considered by the Tribunal, Both the AAC and the Tribunal proceeded on the basis that the properties formed part of the impartible estate and the question was considered as to whether as a result of the coming into operation of the Hindu Succession Act, the impartible estate continued to exist or not. Now, we have held, as we have mentioned hereinbefore, that so far as the properties in respect of the impartible estate and the income in respect of which is included under Section 27, Clause (ii), of the I.T. Act, 1961, are concerned, the Hindu Succession Act would not affect to the extent we have indicated in our judgment, but we need not go into that aspect of the matter because that question has not been referred to us nor it appears out of the statement of the case that any such contention was raised before the Tribunal. Mr. Sen also sought to urge that under Sub-section (2) of Section 171 a notice was required to be given when a claim had been made, and in this case, a claim had been made before the ITO that there was a partition of all the members of the family before deciding whether there was any partition or whether the properties could be partible or not. This aspect again was not urged before the AAC or the Tribunal and no question of law has been referred to us. In that view of the matter, we cannot go into this aspect of the matter, at this stage, but the assessee would be at liberty to urge before the Tribunal when it disposes of the matter under Section 260(1) of the I.T. Act, 1963, in seeking to urge this contention before the Tribunal because these are questions of fact. On behalf of the Revenue, Mr. Pal sought to urge, as these questions were not urged before, that the assessee could not be allowed to agitate this point afresh before the Tribunal. Whether this question, not being urged before, could be allowed to be agitated by the assessee before the Tribunal is a matter which the Tribunal will take into consideration in disposing of the appeal in accordance with law under Sub-section (1) of Section 260 of the I.T. Act, 1961. The principles which are normally applicable in these matters have been mentioned by the Supreme Court in the case of Esthuri Aswathiah v. CIT [1967] 66 ITR 478. Bearing the above principles in mind, the Tribunal will dispose of the appeal in accordance with law. '

5. In the case before us it was contended on behalf of the assessee that premises Nos. 2 and 4, Netaji Subhas Road, Calcutta, did not and could not form part of the impartible estate known as ' Burdwan Raj'. It was argued that the case proceeded all throughout on a wrong assumptionof facts and there were sufficient facts already on record from which it could be clearly seen that the two properties did not form part of the impartible estate at any point of time. A supplementary statement of case was called 'for from the Tribunal. The Tribunal has sent a supplementary statement and some documents, which were alleged to be on record, have been annexed to the supplementary statement. It appears that some of the factual conclusions drawn by the Tribunal in the supplementary statement are in conflict with the statement of facts which was sent to this court earlier.

6. In our view, since the factual position was really not investigated at any stage by the ITO or the AAC or the Tribunal, the best course in this case will be to direct the Tribunal to re-hear the appeal. The Tribunal will have to investigate and find out whether the two properties at Nos. 2 and 4, Netaji Subhas Road, Calcutta, formed part of the impartible eatate known as ' Burdwan Raj '. The Tribunal will dispose of this case after deciding the question of fact in accordance with the principles of law laid down in the assessee's own case in CIT v. U.C. Mahatab, Maharaja, of Burdwan : [1981]130ITR223(Cal) .

7. For the reason indicated above, we decline to answer the question and remit the case to the Tribunal for disposal after recording a clear finding as to whether the two properties in dispute in this case formed part of the impartible estate known as 'Burdwan Raj '.

8. In this case we are following the course adopted by the Supreme Court in the case of CIT v. George Henderson and Co. Ltd. : [1967]66ITR622(SC) . The Tribunal will be entitled to call upon both the Revenue and the assessee to produce documentary or other evidence in order to decide the question in controversy.

9. The appeal may be heard by the Tribunal as expeditiously as possible.

10. There will be no order as to costs.

Sabyasachi Mukharji, J.

11. I agree.


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