COMMISSIONER OF INCOME TAX Vs. INDRAMMA

JUDGEMENT

(1.) In all these appeals the assessees are beneficiaries of the trust. Returns are being filed by the Trustee as well as the beneficiaries. During the course of search it was found that the assessees were not declaring their beneficial interest received from the Trust, along with the other income for the year in which the return of income was filed. Accordingly, the assessing authority added the beneficial interest received by the assessees and recomputed the tax liability while initiating penalty proceedings. Aggrieved by the same, the assessees preferred appeals before the Commissioner of Income Tax, who annulled the orders of the assessing authority and allowed the appeals. Aggrieved by the same, the revenue preferred appeals before the Tribunal. The Tribunal dismissed the appeals. Hence, the present appeals by the Revenue. The Tribunal while dismissing the appeals of the Revenue followed its own Judgment in the case of a connected assessee namely, that of Smt. Indramma (ITA 2785/2005) and Smt. Revathi Raju. The questions of law and the facts in all the appeals are identical. Hence the facts in the case of Smt. Indiramma (ITA 2785/2005) are discussed.

(2.) The assessee had filed a return of income under Section 139(1) on 31-3-1994 for the assessment year 1992-93 declaring a taxable income of Rs. 3,11,279/-. The return of income was processed under Section 143 (1)(a) of the Act. A search took place in the group belonging to the assessee. During the course of post search investigation it was found that the assessee had not been declaring her beneficial interest received from M/s. A.S.K. Brothers Family Trust in which the assessee was a beneficiary and which has not been offered for income in the hands of the assessee. The assessee filed a reply disputing the claim. The same did not find favour with the assessing authority who thereon recomputed the returns including the amount received from the Trust. Aggrieved by the same, the assessee preferred an appeal to the Commissioner of Income Tax. The Commissioner came to the conclusion that having accepted the returns filed by the trustee under Section 161 as well as the returns filed by the beneficiary under Section 139, it is not open to the assessing officer to re-exercise his option under Section 166 of the Act. He further came to the conclusion that in view of the scrutiny assessment under Section 143(3) having been concluded in the case of Smt. Revathi Raju, the facts of all other assessees being one and the same, the assessing officer is not entitled to take a second opinion. Therefore, he came to the conclusion that the assessing officer has committed an error in reopening the assessment. Accordingly, the assessment was set aside. Aggrieved by the same, the revenue preferred an appeal to the Tribunal. The Tribunal by the impugned order dismissed the appeals. Hence, the present appeals by the revenue.

(3.) The appeals have been admitted. In the majority of the appeals, identical questions of law have been framed. Even though the subject matter and the questions of law are the same, they have been worded differently in the other appeals. Both counsels submit that the questions of law already framed need to be reframed so as to make them comprehensive covering the substantial questions of law. Under these circumstances, the questions of law as formulated at the stage of admission are reformulated as follows;-