Devi Burman & Ors Vs. Commnr. of Income-Tax, West Bengal Calcutta  INSC 214 (8 February 1996)
S.P. (J) Bharucha S.P. (J) Ahmad Saghir S. (J) Bharucha . J.
JT 1996 (2) 555 1996 SCALE (1)801
is an appeal by special leave. The order that is impugned was passed by the
High Court at Calcutta in an income-tax reference. The
questions that the High Court was called upon to answer were :
Whether on the facts and in the circumstances of the case, there was a valid
assessment on an H.U.F.for the assessment year 1955-56?
the answer to question no.1 is in the affirmative, Then, whether on the facts
and in the circumstances of the case, the assessments for 1958-59 to 1962-63 in
the status of H.U.F. are valid?" The reference related to Assessment Years
1958-59 to 1962-63, the relevant previous years whereof were B.S. years 1364 to
1368. The assessee was Rash Behari Das Burman, who was governed by the Mitakshara
school of Hindu law. It is unnecessary for the purposes of this decision to
go into his family history, which is referred to both in the Statement of Case
placed before the High Court by the Income Tex Appellate Tribunal and the
judgment of the High Court. What we now set out is what is relevant and it is
taken from the Statement of Case. For the Assessment Year 1955-56 the assessee
submitted a return dated 14th
describing himself as the karta of his H.U.F. An assessment was said to have
been made on the H.U.F. The assessment order on the record of the Revenue bears
no signature. There is no signed copy of the assessment form. There is a demand
notice dated 10th
April, 1958 with some
initial or signature on it. According to the assessse neither the statutory
notices nor the demand notice nor the assessment order had been received. On
the record there is an acknowledgement slip bearing the date 25th April, 1958 signed by one Phool Singh.
According to the assessee, there was no such person who had any authority to
receive any notice on his behalf.
was no material to show that the demand raised in the demand notice had been
paid by the assessee.
filed a partition suit (bearing No.665 of 1955 in the Calcutta High Court). A
settlement was arrived at. The properties were to be divided by metes and
bounds, but that remained to be done when the Statement of Case was drawn by
the Assessment Years 1956-57 to 1961-62, no notices were issued to the H.U.F.
under Section 22 of the Income Tax Act, 1922. Similarly, for the Assessment
Year 1962-63, no notice was issued to the H.U.F. under Section 139 of the
income tax Act, 1961. the income from the properties which were covered by the
partition suit were returned by and assessed in the hands of the erstwhile
members of the H.U.F.
Income Tax Officer thereafter took proceedings under Section 147(a) of the
income tax Act, 1961 and concluded that the assessee's H.U.F. had escaped
assessment; this was on the basis that no genuine partition had taken place and
that the assessee had made a return which misrepresented the facts. The I.T.O.
started proceedings under Section 148 for the Assessment Years 1958-59 to 1961-
62 and under Section 139(2) for the Assessment year 1962-63.
filed 'nil' returns under protest. The I.T.O. rejected the assessee s
contention and made assessments on the H.U F. The assessee appealed but, except
for certain reduction in the quantum, the orders of the ITO were affirmed.
appealed to the Tribunal. The assessee urged that during the relevant
assessment years there was no H.U.F and no valid proceedings there against
could be taken.
also urged that the H.U.F. had never been assessed and that, therefore, there
was no reason to make an application under Section 25A of the 1922 Act. On
behalf of the Revenue it was submitted that there was an assessment on the
H.U.F. as was clear from the order for A.Y. 1955-56 and that, so long as that
assessment stood, it was permissible to proceed against the H.U.F. for the H.U
F. was presumed to exist until an order under Section 25A of the 1922 Act was
passed. The Tribunal went into the question as to whether there was an
assessment on the H.U.F. for the Assessment year 1955-56. Its conclusions were
There was no signed assessment order;
if a demand notice is taken to exist in this case, the assessment is invalid
as, in spite of there being a positive demand thereunder, it had not been
served on the assessee;
if there was no assessment on the H.U.F. (for 1955-56), there was no need on
the part of the assessee to come forward with an application under Section 25A
as that section contemplated an application being made there under only when
there was already an assessment on the H.U.F.;
absence of an application under section 25A could not, under these
circumstances, give the Income-tax authorities any jurisdiction to proceed
against the family as such;
25A(3) had no operation because there was no assessment on the family, the
in the same position as a dead assessee whose income until Section 24B was
enacted could not be subjected to tax (see Ellis Read vs. C.I.T. 5 I.T.C. 100)
and (vi) the assessment in the status of an H.U.F. when the family had ceased
to exist had to be set aside as it was not valid." The Revenue sought a
reference to the High Court contending, among other things, that the factual
findings of the Tribunal were "unsupported by any evidence and is
unreasonable any perverse". The Tribunal modified the questions suggested
and framed the two questions which are quoted above. Having regard to the frame
of the questions that the Revenue wanted the Tribunal to refer to the High
Court, lt was, in our view, open to the High Court to consider the record
before the Tribunal to determine whether the Tribunal's factual conclusions
High Court in a reference under the taxation statutes exercises advisory
jurisdiction in regard to questions of law. It is only when it has before it a
question that asks whether the Tribunal has, upon the evidence on record before
it, come to a conclusion which is perverse that it may go into facts for this
is a question of low. A conclusion if perverse only if it is such that no
person, duly instructed, could, upon the record before him, have reasonably
come to it.
instant case, the High Court placed reliance upon the acknowledgement slip
dated 25th April, 1968 signed by Phool Singh. lt said,
"Records show this Phool Singh to have received a number of notices on
behalf of the assessee on widely separated dates". The "records"
which the High Court referred in was a statement of "Facts which are
admitted and/or found by the Tribunal and which are necessary for drawing up a
statement of the case (vide para 3 of the Reference application)" which
was annexed to the Revenue's reference application. This statement said,
"Records show this Phool Singh to have received a number of notices on
behalf of the assessee on widely separated dates". The Statement of Case
does not say this about Phool Singh.
the Tribunal that finds facts. It sets these out in the Statement of Case
whereby it retries questions of law to the High Court The High Court, in
reference proceedings, cannot go behind the facts found. Where the High Court
is of the view that it is requisite that facts other than those found need to
be ascertained it must call upon the Tribunal to submit a Supplemental
Statement of Case. Even when, as here, the High Court is required to decide
whether the findings of fact reached by the Tribunal are perverse, the High
Court is continued to the evidence that was before the Tribunal. The High Court
cannot look at evidence that was not before the Tribunal when it reached the
impugned findings to hold that these findings are perverse.
of "admitted" facts was placed by the Revenue before the Tribunal as
an annexure to its reference application That the Statement of Case does not
state that Phool Singh had received earlier notices on behalf of the assessee
shows that the Tribunal had not so found that there is no mention of this at
all suggests that the Revenue did not place this argument and the supporting
material before the Tribunal. The High Court could have required the Tribunal
to ascertain whether Phool Singh had received earlier notices on behalf of the assessee
and prepare a Supplemental Statement of Case, out the High Court could not,
upon these "admitted" facts, have reached the conclusion that the
Tribunal's findings of fact were perverse.
High Court based itself upon the demand notice and the acknowledgement slip
signed by Phool Singh and observed, "Unless an assessment order was passed
under or in pursuance of the Act question of a notice of demand on the
prescribed form specifying the High Court did not give due importance to the
fact that upon the record produced by the Revenue before the Tribunal there was
no signed assessment from.
an assessment order has to be signed is established by the judgment of this
Court in Kalyankumar Ray vs. Commissioner of Income-tax, 191 I.T.R.634.It said:
therefore, the Income-tax Officer first draws up an order assessing the
adjustments to be made, directs the office to compute the tax payable on that
basis and then approves of it, either immediately or some time later, no fault
can be found with the process, though it is only when both the computation
sheets are signed or initialled by the Income- tax Officer that the process
described in section 143(3) will be complete.
*** *** All these decisions emphasis that all that is needed is that there must
be some writing initialled or signed by the Income-tax Officer before the
period of limitation prescribed for completion of the assessment has expired in
which the tax payable is determined and not that the form usually styled as the
"assessment order" should itself contain the computation of tax as
well." A valid assessment upon the H.U.F. for the Assessment Year 1955-56
was central to the case of the Revenue. Since at was unable to establish, by
the production of a signed assessment order for that year, that there was such
valid assessment, its case fell and the Tribunal was right in so holding. The
High Court was in error in concluding that the findings of the Tribunal on the
record were perverse.
appeal is allowed. The judgment and order under appeal is set aside. The
Judgment and order of the Tribunal is restored.
respondents shall pay to the appellants the costs of the appeal.