Income Tax Appellate Tribunal - Jaipur
Commissioner Of Income Tax vs Zafrul Hassan Iraqi Itat, Jaipur Bench on 26 October, 1998
Equivalent citations: (1998)62TTJ(JP)795
ORDER
R. K. GUPTA, This is a reference application filed by the Department seeking ~eference of the following questions stated to be questions of law and arising out of the order of the Tribunal in ITA No. 1132/Jp/1991, to the Hon'ble High Court for their esteemed opinion:
"1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the order passed by the AO was illegal and ab mitio void for the reason that principles of natural justice was violated by not affording an opportunity?
2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that not giving the assessee an opportunity was an incurable mistake of law and, therefore, CIT(A) was not justified in setting aside the assessment order for making afresh after allowing the assessee an opportunity?
3. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in deleting the addition of Rs. 11,283 made by the AO on account of rental income from property in the benami name of Afroz, the minor son of assesseeT' Inasmuch no referable question of law arises out of the order of the Tribunal. We, therefore, decline to draw up a statement of the case.
2. Brief facts of the case are that assessment was completed under s. 143(3) of the IT Act, 1961, on 28th March, 1990 on a total income of Rs. 1,51,780. While doing so the AO included in assessee's income the following incomes also :
Rs.
(i) Income from house property in the name of Smt. Zafrunisha 30,000
(ii) Income from undisclosed source of Smt. Zafrunisha 30,000
(iii) Income from unexplained cash credit in the case of Parvez Iraqi 15,551
(iv) Income of unexplained money under s. 69A of Parvez Iraqi 275
(v) Rental income of Afroz 11,283 The learned CIT(A) vide his order dt. 21st March, 1991 in Appeal No. 170/90-91, set aside the additions at (i), (ii), (iii) and (iv) above to decide afresh after allowing the assessee due opportunity. He, however, confirmed the addition of Rs. 11,283 on account of rental income of Afroz.
3. The assessee preferred further appeal before the Tribunal and Tribunal held that the order of the AO was null and void as the AO made additions without affording any opportunity to the assessee. This mistake was a legal mistake which is not curable in the eyes of law. Therefore, the Tribunal decided the issue in favour of the assessee. The Tribunal also deleted the addition of Rs. 11,283 earned by the son of assessee who was a minor. The Tribunal held that the investment in house property in the name of assessee's minor son was from the independent funds of the minor son. Therefore, the rental income earned out of that property was the income of the minor son and cannot be clubbed with the income of the assessee.
4. The learned Departmental Representative placed reliance on the statement of facts enclosed along with the reference application.
5. On the other side the learned authorised representative of the assessee strongly stated that no referable question does arise out of the order of the Tribunal because the Tribunal decided the issue after following the decision of apex Court and he further placed reliance on a decision in case of CGT vs. Smt. Kusumben D. Mahadesda (1980) 14 CTR (SC) 366 : (1980) 122 ITR 38 (SC) wherein it is held that where the question is self-evident or was concluded by a decision of the Supreme Court then no referable question does arise out of the order of the Tribunal. The reliance was also placed on a decision Ralasthan Textile Industries vs. CIT (1986) 53 CTR (Raj) 458 : (1987) 164 ITR 732 (Raj), wherein it has held that the finding as to whether a person is benamidar of the assessee is a finding of fact.
6. We have heard the rival submissions and considered them carefully. We found that question Nos. 1 and 2 are in regard to the finding of the Tribunal that order of the AO was ab initio void. In fact the AO made addition in the hands of the assessee without giving a single opportunity to the assessee. The additions were made on the basis of assessment order of the respective persons in whose assessment some discussions took place but no opportunity was given to the assessee. The Tribunal while deciding the issue placed reliance on the decision in the case of Ponkunnam Traders vs. Add]. ITO (1972) 83 ITR 508 (Ker) wherein it is held that "petitioner had no opportunity before the ITO to raise the objection that the officer could proceed to assess the petitioner only after giving notice of the material gathered by him on the basis of the enquiry 52,000 conducted by him under s. 142(3). As the order of the ITO was nullity and the petitioner had no opportunity to object to the procedure which made the order a nullity, and the fact that he did not raise the objection in the appeal or revision should not be ground for exercising the discretion of the Court against the petitioner. The breach of natural justice is itself miscarriage of justice which enables the applicant to succeed." Further, the Tribunal placed reliance on a decision in case of CIT vs. Shyam Lal (1980) 18 CTR (P&H) 89 ' . (1981) 127 ITR 816 (PM) wherein also similar decision was given by Hon'ble Punjab & Haryana High Court. The Tribunal also placed reliance on R.B. Sriram Durga Prasad & Fatehchand Nursing Das vs. Settlement Commission (IT & WT) & Anr. (1989) 75 CTR (SC) 187.. (1989) 176 ITR 169 (SC) wherein the Hon'ble Supreme Court has held that the earlier order passed by the Settlement Commission was a nullity because it was made in violation of the principles of natural justice.
7. After placing reliance on these valuable decisions the Tribunal decided the issue in favour of the assessee by holding that the order of the AO was ab initio void. In our considered view the decision of the Tribunal was based on the legal provisions and on the basis of decision of apex Court. Therefore, in our considered view question Nos. 1 and 2 are not referable question. Therefore, we decline to refer these questions.
8. Question No. 3 is in regard to the deletion of addition of Rs. 11,283. The Tribunal decided this issue after finding out the facts that the property belonging to the minor son of the assessee is not a benami property. The Tribunal also followed the principles settled in the leading case of Prakash Narain vs. CIT (1981) 20 CTR (All) 147.. (1982) 134 ITR 364 (All). Therefore, in our considered view, question No. 3 is not a referable question because in this connection the Tribunal has given its finding of fact and finding of fact is not a referable question.
9. In the result, the reference application of the Department is hereby rejected.