COMMISSIONER OF INCOME TAX Vs. CHAMUNDESWARI

JUDGEMENT

(1.) AT the instance of the revenue, the Income Tax Appellate Tribunal referred the following question said to arise out of its order in ITA 3542 (MAD)/90, for the opinion of this Court in pursuance to the directioni of this Court under Section 256 (2) of the Income Tax Act.

(2.) THE brief facts relating to the above reference are as under: the assessee respondent was doing business in production and sale of cinematography films. The relevant assessment year is 1980-81 and the corresponding accounting year ended as on 30. 6. 1979. The respondent assessee by his return on income, on 05. 12. 1980, admitted a loss of Rs. 1,01,120/- and the original assessment was completed under Section 143 (3) determining the loss at Rs. 91,120/- on 31. 03. 1983. Subsequent to the completion of the assessment, the Assessing Officer noticed that the respondent assessee had filed a letter dated 19. 3. 1983 on 24. 3. 1983 in which it had offered a credit of Rs. 5000/- standing in the name of Smt. Girija Pakriswamy as income of the respondent assessee and the same was omitted to be taken into consideration while completing the assessment. In view of this, the assessment was reopened under Section 147 and in its proceedings, the amount of Rs. 5000/- was added to the total income of the respondent assessee. In addition, the Assessing Officer has made some other addition treating them as income from other sources. Aggrieved by this, the respondent assessee preferred an appeal to the Deputy Commissioner of Income Tax Appeals. The said Deputy Commissioner of Income Tax Appeals, was of the view that the reopening of the assessment under Section 147 (b) was valid and he accordingly confirmed the order of the reassessment made by the Assessing Officer under Section 147 (b) read with Section 143 (3 ). Aggrieved by the said order, the respondent assessee filed an appeal to the Income Tax Appellate Tribunal and submitted that the invoking the provisions of Section 147 (b) and making reassessment was not justified. The learned Department Representative supported the order of the Deputy Commissioner of Income Tax and maintained that the same was not called for any interference. The Income Tax Appellate Tribunal held that it would not be open to the Assessing Officer to invoke the provisions of Section 147 (b) on the ground that invoking of jurisdiction under Section 147 (b) was not justified and accordingly, cancelled the reassessment made on the basis of such reopening.

(3.) THE revenue filed a Reference Application before the Income Tax Appellate Tribunal under Section 256 (1) of the Act, requesting the Tribunal, referred the above mentioned question to this Court for its opinion. The Income Tax Appellate Tribunal rejected the Reference Application on the ground that there is no question of law arise out of the order of the Tribunal. Later, the Revenue filed a petition under Section 256 (2) of the Act, requesting this Court to give direction to the Tribunal to refer the matter to the High Court for its opinion. In pursuance of this Court Order dated 26. 03. 1998 in TCP 438 of 1997, the Tribunal referred the above question of law.