Orissa High Court
A. Venkata Rao vs Commissioner Of Income-Tax on 4 November, 1992
Equivalent citations: [1993]203ITR64(ORISSA)
Author: A. Pasayat
Bench: A. Pasayat
JUDGMENT
1. Heard Mr. S.N. Ratho, learned counsel for the petitioner, and Mr. A.K. Ray, learned counsel for the Revenue.
2. At the instance of Mr. A. Venkata Rao (hereinafter referred to as "the assessee"), the Income-tax Appellate Tribunal, Cuttack Bench, Cuttack (hereinafter referred to as "the Tribunal"), has referred the following two questions for the opinion of this court under Section 256(1) of the Income-tax Act, 1961 (in short, "the Act") :
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the validity of reopening of the assessment ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that minor's share income from the partnership is includible under Section 64(1)(iii) of the Act ?"
3. A brief reference to the factual aspect is necessary in view of the order we propose to pass.
4. A partnership firm styled as Messrs. Andavarapu Venkata Rao and Sons consisting of several partners was constituted and three of them, namely, Mr. A. Krishna Rao, Mr. A. Bhaskar Rao and Mr. A. Chandramouli, were minors who were represented by their mother and guardian. The assessee filed a return of income for each of the assessment years 1978-79, 1979-80, 1980-81 and 1981-82. The Income-tax Officer, Jeypore, accepted the returns of income filed under Section 143(1) of the Act. Subsequently, notice was issued for reassessment on the ground that the income of the minors which ought to have been returned and assessed has been omitted by the assessee. Reference was made to the provisions of Section 64(i)(iii) of the Act for the purpose. Fresh assessments were completed including the incomes of the minor sons. The assessee, being aggrieved by the reopening of the assessments and inclusion of income of the minor sons, preferred appeals before the Appellate Assistant Commissioner of Income-tax, Berhampur Range, who allowed the appeals. The Tribunal set aside the order and remitted the matter back to the first appellate authority. Those appeals were again decided in favour of the assessee. The first appellate authority accepted the two primary stands of the assessee to the effect that (a) there was no valid service of notice for reopening the assessment; and (b) the provisions of Section 64(1)(iii) had no application to the facts of the case. The Revenue assailed the correctness of the orders of the first appellate authority in further appeals before the Tribunal. The Tribunal set aside the orders of the first appellate authority holding that there was valid service of notice and the provisions of Section 64(1)(iii) had application to the case. The assessee sought for a reference to this court and the aforesaid questions as indicated in the threshold were referred to this court for opinion.
5. Though attractive arguments were advanced before us by learned counsel for the assessee and the Revenue, we are satisfied that the Tribunal has not dealt with the case of the parties in detail and has cryptically disposed of the matter with the following observations :
"I have gone through the paper book filed by the learned representative for the assessee, Shri S.N. Sahu, on behalf of the assessee. He has cited several judgments and has given a list of judgments. All those judgments will be applicable if the facts fall within the purview of those judgments. The facts in the instant case are different and reopening of the assessments stands on a different footing. The reopening of the assessments cannot be said to be illegal.
I have examined the facts. I have also considered the arguments and the numerous judgments cited on behalf of the assessee. In fact, if the facts themselves do not support the assessee's case it would be difficult to hold that the judgments support the same. In my opinion, the Appellate Assistant Commissioner has ignored the correct facts to arrive at a conclusion favourable to the assessee. On the contrary, the provisions of Section 64(1)(iii) being mandatory, it was binding on the assessee to disclose the income of the minor sons in his returns of income. The assessee did not do so and, hence, the reopening of the assessments cannot be said to be illegal. The reopening is perfectly legal and it is rightly done."
6. This was a case where the conclusions were in favour of the assessee. The Tribunal has merely noted the arguments advanced on behalf of the Department and the assessee. No definite conclusions on the vital aspects have been arrived at by the Tribunal as is evident from the paragraphs quoted above. The Tribunal was duty bound to examine the point raised by the parties and to record definite conclusions in respect of each one of them. The Tribunal having failed to do so, we feel that the matter should be reheard by it. It has to indicate reasons in support of its conclusions and merely saying that the paper books have been gone through or facts have been examined is not sufficient. No reasons were indicated as to why the conclusions of the first appellate authority were unreasonable or perverse. Presumptive conclusions cannot take the place of reasons. Our interference should not be construed to be an expression about the merits of the case. We remit the matter to the Tribunal because its judgment is unreasoned and no definite conclusions have been indicated in support of the order of reversal passed by the Tribunal. The tax amount being minimal, the Tribunal would do well to dispose of the appeals as expeditiously as practicable. The Tribunal shall give full opportunity to the parties to place their respective cases when it hears the appeals again.
7. The reference applications are, accordingly, disposed of. No costs.