Kerala High Court
Deputy Commissioner Of Agricultural ... vs T.K.S. Dinakaran on 22 July, 1996
Equivalent citations: [1998]232ITR164(KER)
JUDGMENT P.A. Mohammed, J.
1. This batch of tax revision cases have been filed under Section 78 of the Kerala Agricultural Income-tax Act, 1991 (for short "the Act"), against the common order passed by the Agricultural Income-tax Appellate Tribunal, Kottayam, in respect of the assessment years 1979-80, 1980-81, 1981-82 and 1983-84. These revisions have been filed by the Deputy Commissioner of Agricultural Income-tax (Law), Board of Revenue, Taxes, Ernakulam. The respondent in these cases is the assessee under the provisions of the Act.
2. The questions involved in these cases are : (i) whether Section 9(2) of the Act is attracted to the facts available in these cases ? and (ii) whether the assessing authority is justified in invoking the powers under Section 35(1) of the Act ?
3. The original assessment orders were passed by the assessing authority and those assessments were revised later under Section 18(3) invoking the powers under Section 35 of the Act. The revised assessment orders under Section 35 were passed clubbing the income from 8.675 acres of cardamom land held in the name of the respondent's minor son, S.D. Gopinath. The said land was transferred by the respondent to his minor son in 1978. The respondent in these cases is a regular assessee under the Act and he was assessed to agricultural income-tax up to the assessment year 1978-79 for an extent of 19.145 acres of cardamom land held in his name. For the assessment year 1979-80, he conceded income from an extent of 9.92 acres alone. The case of the assessee is that he had alienated 8.675 acres of land to his minor son by way of partition deed No. 1975, dated May 16, 1978, of the Sub-Registrar Office, Udumbanchola, and another extent of 0.55 acres to one Sri R. Thankavel by way of sale deed No. 2685 dated August 12, 1971. After deducting the lands transferred the balance extent in his possession was only 9.192 acres during the previous year relevant to the assessment year 1979-80. This contention was accepted by the assessing authority and the assessments were completed by the Additional Agricultural Income-tax Officer on May 31, 1989, reckoning the extent of land held by the assessee as 9.92 acres alone. As far as the remaining years of 1980-81, 1982-83 and 1983-84 are concerned, the same position was adopted by the officer. Subsequently, as pointed out above, a notice under Section 35 of the Act was issued proposing to club the income from 8.675 acres of land which was alienated to the minor son. The above proposal was objected to by the assessee. He submitted that the properties partitioned and alienated to his minor son are ancestral family properties in which the son has a right by birth, that he has not transferred any of his personal interest to his minor son, that the original assessments were completed after proper enquiry and investigation and that the fact of partition has been lawfully accepted by the Department at the time of original assessments. Finally, the assessee pointed out that what is involved in the case is only "change of opinion" on the same materials available. The objections were rejected by the assessing authority and revised assessment orders were passed under Section 35 as proposed in the notice issued under Section 18(3) of the Act. As against these revised assessment orders, the assessee filed appeals before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner by his common order dated October 1, 1984, remanded the case to the assessing authority for fresh disposal after detailed enquiry. The assessments again came up before the assessing authority after remand. In that enquiry, the assessing authority found that Section 9(2) would apply in the case and, therefore, he proposed to club the income of the minor son with that of the assessee. Accordingly, the assessments were again completed for the second time clubbing the income from, the minor's property with that of the assessee. These second revised assessments were taken up in appeal before the Appellate Assistant Commissioner. Those appeals were dismissed by a common order dated May 31, 1989. Thereafter further appeals were filed before the Appellate Tribunal and the Tribunal by a common order dated November 29, 1990, cancelled the assessments completed pursuant to action under Section 35 of the Act. The Tribunal has also restored the original assessments made by the assessing authority after accepting the alienation of the property subject to the modifications, if any, ordered in the first appeals. It is against the said order that these revision cases have been filed.
4. Learned counsel for the Revenue contended that this is a case where Section 9(2) of the Act would apply. He explained that in computing the total agricultural income of the assessee for the purpose of assessment there shall be added so much of the agricultural income of his minor child as arises directly or indirectly during the relevant accounting period. In the present case, the properties were transferred to the minor son by virtue of a partition deed No. 1975 dated May 16, 1978. The transfer in this case cannot be considered to be a transfer coming within the purview of Clause (iv) of Sub-section (2) of Section 9 . What is contemplated under Section 9(2) is the transfer of assets directly or indirectly to the minor child by an assessee otherwise than for adequate consideration. As pointed out above, what is involved here is a family partition and transfer of properties by virtue of such partition cannot be said to be a transfer of property for any consideration or otherwise. This is a case where the minor son by reason of his birth has got an interest in the property and what was done is only to separate his rights in the said property. Section 9(2)(a)(iv) of the Act can be invoked only in the case of an individual who has directly or indirectly transferred the properties to his minor child otherwise than for adequate consideration. In such cases the minor child has no personal interest in the properties and such properties belong exclusively to the transferor. Therefore, we are of the view that the provisions contained in Section 9(2)(a)(iv) of the Act cannot be applied to the facts and circumstances of this case.
5. The next question is whether the assessments originally passed can be reopened by invoking the provisions of Section 35 ? The power under Section 35 cannot be invoked as a matter of course. The power can be exercised only in the circumstances which are specified in the section. It is a prerequisite that before issuing notice the officer must record the reasons for doing so. This is a sufficient safeguard for an assessee against frequent reopening of concluded assessments by succeeding officers. The power under this section cannot be exercised merely on a "change of opinion" on the materials already on record. When all the materials on record were considered and after investigation and enquiry a conclusion has been arrived at by an officer in an adjudication of a dispute, such conclusion is in the nature of a judgment. It cannot be reopened by forming a different opinion on the same materials by the same officer or the succeeding officer unless there are fresh materials for doing so. The meaning of the words "for any reason" contained in Section 35 cannot be enlarged so as to take in "change of opinion" or "error of judgment". In this case all the records including the partition deed by which the property was transferred to the minor son of the assessee were available before the officer at the time of the original assessment. It was after considering all such materials that the original assessments were passed by the then officer. The order of the Tribunal also indicates that the minor son was separately assessed to agricultural income-tax in respect of the income derived from the property transferred to him as per the partition deed dated May 16, 1978. Therefore, the assessing authority is not justified in exercising the power under Section 35 of the Act in the present case. Taking note of the entire facts and circumstances of the case, we are inclined to agree with the conclusion of the Appellate Tribunal.
6. In the result, we confirm the order passed by the Tribunal which is challenged in these cases. The tax revision cases are dismissed. No order as to costs.