COMMISSIONER OF INCOME TAX Vs. JAGJIT SINGH GIDDA

JUDGEMENT

(1.) AT the instance of the revenue, the following question has been referred for opinion of this Court by the Tribunal, New Delhi, under S. 256(1) of the IT Act, 1961 ('the Act') :

(2.) BRIEF reference to the factual position, as indicated in the statement of case, would suffice. Shri Jagjit Singh Gidda, a non-resident, is the assessee in respect of whom return was filed for the asst. yr.1972-73 by Smt. Kamlesh Saini, who filed return as a representative of the assessee declaring an income of Rs. 4,292. This income was declared in respect of property No. S-305, Greater Kailash, New Delhi. Along with return, copy of general power of attorney executed by Shri Jagjit Singh Gidda on 16th Nov., 1971, was filed. The ITO issued notice under S. 143(2) of the Act to Smt. Kamlesh Saini asking her to explain the source of investment of Rs. 75,600 in the property, which was purchased by Shri Jagjit Singh Gidda as per registered sale deed dt. 18th Aug., 1971. Smt. Kamlesh Saini replied stating that, being a representative of the assessee, she cannot be asked to explain the source of investment, as she was merely an agent for collection of rent from the said property. The ITO asked her as to why she should not be treated to be liable to explain the source of investment in view of general power of attorney dt. 16th Nov., 1971. Reply was filed by her stating that she had no obligation to explain the source of investment of the assessee in the said property. Rejecting the contention, the ITO held that since Smt. Kamlesh Saini, acting in the capital of an attorney or an agent, was liable to the same extent under the Act as the non-resident himself, she could not absolve herself of the responsibility of explaining the sources of investment. Accordingly, the investment was treated as income from other sources under S. 69 of the Act and was added to the income of the assessee. Matter was carried in appeal before the AAC. It was stand of the assessee that the ITO erred in calling upon Smt. Kamlesh Saini, the learned assessee, to explain the said investment. The AAC confirmed the action of the ITO and dismissed the appeal. Matter was carried in further appeal before the Tribunal. It was submitted that assessment in the case was made directly on the non-resident, Shri Jagjit Singh Gidda, but through his representative, Smt. Kamlesh Saini and it was, therefore, no part of the representative of the assessee's liability to explain the source of income. The Tribunal accepted the stand and deleted the addition. At the instance of the revenue, the question as set out above, has been referred for opinion of this Court.

(3.) WE find, with reference to the assessment order, that while making the assessment, status of Shri Jagjit Singh Gidda was taken to be individual and so far as the residential status is concerned, it was taken to be non-resident. Though, there is mention that the assessment was made through the representative, Smt. Kamlesh Saini, the effect of such an indication has not been examination by the Tribunal. It has also not noticed the facts that the memorandum of appeal and form of verification has been signed by Shri Jagjit Singh Gidda and he himself was present in present along with his authorised representative at the time of hearing. The effect of this factual position has also not been considered by the Tribunal. These aspects were certainly needed to be considered by the Tribunal. That being the position, we thing it appropriate to remit the matter back to the Tribunal to considered it afresh in the light of observations made by us and pass necessary orders, as provided in law. It goes without saying that we have not expressed any opinion on the merits of the case.