SUSHIL KUMAR Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) ACCORDING to the petitioner there was an HUF named as Bawan Das & sons, in which Sri Sri Sushil Kumar was a member. A partial partition took place and Sri Sri Sushil Kumar was allotted his share in the ancestral assets. With the aid of the assets received on the partition, Sri Sushil Kumar, who was minor, was admitted to the benefit of a partnership in a registered partnership firm known as 'Clarks Hotel, Varanasi'. The petitioner continued to be assessed in his individual capacity. Apart from the income from the assets, Sri Sushil Kumar started enjoying an income from salary and commission. In February, 1965 Sri Sushil Kumar got married and according to the petitioner a separate HUF was formed of which Sri Sushil Kumar was a Karta. However, upto the year 1971 he continued to file one single IT return in the status of an individual showing there in all his income whether received as a Karta of the family as also the income earned in his individual capacity. It is the petitioner's case that Sri Sushil Kumar became aware of the position that he was entitled to file two separate returns, one of the HUF and the other in his individual capacity in the year 1971 and according to the petitioner, Sri Sushil Kumar filed two revised returns for the asst. yrs. 1968-69, 1969-70 and 1970-71, which were then pending assessment. It may be added that according to the petitioner, the returns for these years had previously been filed by him in his individual capacity and advance tax had been paid. In the revised returns, the petitioner bifurcated his income showing the salary and commission income as Sri Sushil Kumar's individual income and the income of the HUF separately. The ITO accepted the contention of Sri Sushil Kumar that the income arising from ancestral assets was the income of the HUF, of which Sri Sushil Kumar was the Karta, while the income from the salary and commission etc. was the individual income of Sri Sushil Kumar and passed the assessment orders accordingly.

(2.) THE ITO was, however, of the view that the HUF has filed late returns of its income and that it had not paid the advance tax within time. The ITO refused to give credit to the HUF of advance tax deposited by the petitioner in his individual capacity. The ITO also refused to treat the return filed by the HUF as a revised return. The ITO proceeded to levy interest for the late filing of the returns under S. 139(1) of the IT Act and for failure to pay advance tax under S. 271(1) of the Act. The ITO also issued notices under S. 217(b) to impose penalty for failure to pay advance tax.

(3.) AGAINST the order of the AAC, both, the petitioner and the Department, went up in Appeal before the Tribunal. The appeal of the petitioner was rejected. The Tribunal, however, allowed the appeal of the Department on the ground that the AAC had no jurisdiction to entertain an appeal against the levy of interest. The petitioner thereupon asked for a reference under S. 256(1) of the IT Act and the Tribunal made a reference for the asst. yr. 1968-69 and 1969-70.