Gauhati High Court
Smt. Iva Gogoi vs Commissioner Of Income-Tax on 18 September, 2001
Author: Ranjan Gogoi
Bench: Ranjan Gogoi
JUDGMENT Ranjan Gogoi, J.
1. The present reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), is at the instance of the assessee. The following two questions have been referred to this court for its opinion :
"(1) Whether, on the facts and in the circumstances of the case and the provisions of Section 68 of the Income-tax Act, 1961, the Tribunal was justified in upholding the order of the Income-tax Officer treating the cash credit of Rs. 50,000 in the name of Sri Chandan Mahanta on August 16, 1986, and Rs. 15,000 in the name of Shri Manoj Mittal on September 12, 1986, in the books of the assessee as income of the assessee from undisclosed sources ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal has not misdirected itself in law in upholding the findings of the Income-tax Officer and the Commissioner of Income-tax (Appeals) and in holding that the assessee failed to prove with documentary evidence the cre-ditworthiness of the loan creditors ?"
For the assessment year 1987-88, the assessee submitted her return of income showing a total income of Rs. 65,850. In so far as the facts material to the instant reference are concerned, it may be noticed that in the return filed, the assessee claimed an amount of Rs. 1,00,000 as loan given by four different creditors in order to enable the assessee to meet the requirement of investments in building construction. Confirmation of loan, statement of account, affidavits and written explanation from the creditors along with the statements of their bank accounts were furnished to the Assessing Officer in the course of the assessment proceeding. The four creditors in question were also examined by the Assessing Officer under Section 131 of the Act. By the assessment order dated February 27, 1990, the Assessing Officer disallowed the said claim made by the assessee and added an amount of Rs. 1,00,000 as income of the assessee from other sources under Section 68 of the Act. In the appeal filed by the assessee before the learned Commissioner of Income-tax (Appeals), the learned first appellate authority accepted two items of loan as claimed by the assessee to the extent of Rs. 35,000 but upheld the order of the Assessing Officer in so far as the other two loan amounts of Rs. 50,000 in the name of one Chandan Mahanta and another amount of Rs. 15,000 in the name of Manoj Mittal are concerned. In the second appeal at the instance of the assessee, the learned Tribunal confirmed the additions made by the primary authority as upheld by the first appellate authority. Thereafter, the assessee having filed an application under Section 256(1) of the Act, the learned Tribunal has referred the abovenoted two questions to this court for its opinion.
3. We have heard Mr. A. K. Jain, learned counsel for the assessee. None has appeared for the Revenue.
4. The conclusions of the learned Tribunal as to whether the amounts claimed by the assessee to be loans are essentially conclusions on the questions of fact. This court while exercising its advisory jurisdiction under Section 256 of the Act would not convert itself into a court of appeal and enter into a reappraisal of the evidence and materials on which the conclusions of the learned Tribunal have been reached. The apex court in the case of Rameshwar Prasad Bagla v. CIT [1973] 87 ITR 421 has laid down the proposition as stated above. It may be useful at this stage to extract herein the following observations of the apex court in the case of Rameshwar Prasad Bagla [1973] 87 ITR 421, 426 :
"This approach of the High Court was wholly erroneous and not warranted by law. It is for the Tribunal to decide questions of fact, and the High Court in a reference under Section 66 of the Act cannot go behind the Tribunal's findings of fact. The High Court can only lay down the law applicable to the facts found by the Tribunal. The High Court and the Supreme Court, in an appeal against the judgment of the High Court given in a reference under Section 66 of the Act, are not constituted courts of appeal against the order of the Tribunal. These courts only exercise advisory jurisdiction in such references. The High Court in a reference under Section 66 of the Act can, however, go into the question as to whether the conclusion of the Tribunal on a question of fact is based upon relevant evidence. If the High Court finds that there is no such evidence to support the finding of fact of the Tribunal, this circumstance would give rise to a question of law and can be agitated in a reference. It is well-established that when a Tribunal acts on material which is irrelevant to the enquiry or considers material which is partly relevant and partly irrelevant or bases its decision partly on conjectures, surmises and suspicions and partly on evidence, then in such a situation an issue of law arises and the finding of the Tribunal can be interfered with. The finding may also be interfered with if it be found to be so unreasonable that no person acting judicially and properly instructed as to the relevant law could have arrived at it."
5. The correctness of the conclusions of fact arrived at by the learned Tribunal within the parameters of the law laid down by the apex court in the case of Rameshwar Prasad Bagla [1973] 87 ITR 421, can only be gone into by the High Court in the exercise of its jurisdiction under Section 256 of the Act, if an appropriate question of law in this regard has been framed and referred to the High Court for its opinion. The aforesaid position may be taken to be settled law in the light of several judgments of the apex court of which reference may be made to the case of Hooghly Trust (Private) Ltd. v. CiT [1969] 73 ITR 685 (SC) and in the case of Dr. K. George Thomas v. CIT [1985] 156 ITR 412 (SC). The position that emerges from the above is that in exercise of its jurisdiction under Section 256 of the Act, this court would have the limited power of interfering with the conclusions of fact reached by the Tribunal only if such conclusions have been arrived at by overlooking and not considering the relevant materials on record or if the conclusions reached are totally opposed to materials and evidence on record, i.e., the conclusion is a perverse one. Further, to enable this court to exercise its jurisdiction, a specific question raising the point of perversity must be framed and referred to the High Court by the learned Tribunal.
6. Adverting to the facts of the present case, we find that in question No. 2 the Tribunal seeks the opinion of this court as to whether the Tribunal has not misdirected itself in upholding the findings of the Income-tax Officer and the Commissioner of Income-tax (Appeals). The question framed and referred to us, at the instance of the assessee, could have been perhaps more accurately worded. However, having regard to the settled position in law that the reference court, if the facts of the case so warrant, may even reframe the question referred, we treat the said question No. 2 as a question relating to the perversity of the conclusions reached by the learned Tribunal and on that basis, we propose to answer the aforesaid question No. 2.
7. We have perused the relevant portion of the order of the Tribunal dated September 21, 1993, the order dated August 10, 1990, passed by the Commissioner of Income-tax (Appeals) as well as the assessment order passed by the jurisdictional Income-tax Officer. A perusal of the aforesaid orders discloses that it is on record that one of the creditors, Sri Chandan Mahanta who allegedly advanced a loan amounting to Rs. 50,000 to the assessee had a monthly income of Rs. 1,400 to Rs. 1,500 from the fabrication business which is stated to have been started in the year 1984, with an initial capital of Rs. 12,000. The total turnover of the business of the aforesaid creditor was found to be approximately Rs. 1,00,000. The said creditor was not an income-tax assessee and did not maintain any books of account for his business. The aforesaid creditor when asked about the source of the loan allegedly made to the assessee has attributed the same to his past savings and marriage gifts. The bank pass book of the aforesaid creditor did not disclose any substantial deposit except two amounts of Rs. 20,000 and Rs. 25,000 made on August 7, 1986, and August 22, 1986, respectively. The aforesaid two deposits were sought to be explained by the creditor as having been made from cash in his hand as also from amounts received from the customers. As to who those customers were and whether the amounts were received as advance or as dues were not indicated. It is on record that out of monthly income of the creditor, an amount of Rs. 800 to Rs. 1,000 per month was stated to be his contribution to the family expenditure.
8. In so far as the creditor, Manoj Mittal, is concerned, the materials on record did not show the carrying on of any business by the said creditor, as claimed. The creditor in question was also not found to be an income-tax assessee. No evidence as to from what source the amount of Rs. 15,000 allegedly given as loan to the assessee was received, had been brought on record.
9. The learned Tribunal after taking into account all the relevant facts and circumstances as narrated above came to the conclusion that the findings of the learned Commissioner of Income-tax (Appeals) in so far as are relevant for the purpose of the present reference, ought to be upheld. The aforesaid conclusions of the learned Tribunal were made after an elaborate consideration of the materials on record. Having regard to the evidence and materials on record, we are of the view that the conclusions reached by the Tribunal are perfectly justified, legal and valid. No error much less any perversity in the conclusions reached can be read in the order of the learned Tribunal.
10.In view of the aforesaid conclusions reached by us, questions No. 1 and 2 are answered in favour of the Revenue and against the assessee. The reference application stands accordingly disposed of.