HEMLATA AGARWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a case stated under Section 66(2) of the Indian Income-lax Act. 1922 (hereinafter referred to as the Act). The question which was directed to he referred by this Court was:

(2.) THE material facts are these: THE relevant year of assessment is the assessment year 1945-46, the previous year being the financial year ending 31st March, 1945. THE assessee is the wife of Ganesh Prasad. She was the grand daughter of Raja Sir Moti Chand. She has been assessed in the status of an individual under Section 34(l)(a) of the Act for her failure to explain satisfactorily a sum of Rs. 24,500 out of the total investment of Rs 83,500 made in the purchase on 8-5 1944 of a house property at Varanasi in her name. Her husband Ganesh Prasad was a member of the erstwhile Hindu undivided family of M/s. Bishwanalh Prasad and Sons THE Tribunal has found that she also was a member thereof Her explanation was that out of the investment of Rs. 83,500, the sum of Rs 59,000 was a loan taken by her from the Hindu undivided family and this has been accepted by the Department Her explanation that she had sold her ornaments on two dates at Amrilsar i.e on 11th March 1944 and 1st of May 1944 and realised therefrom Rs. 24,500 was disbelieved and assessment under Section 34( 1) (a) against her was made on the 7th of March, 1955 in respect of the assessment year 1945-46

(3.) IT is clear that what was agitating the mind of the Court was the validity of the assessment itself which was made under Section 34 (1) (a), when the Tribunal, which is the final court of fact, had yet not made up its mind whether the impugned sum of Rupees 24,500 was the income of the assessee or that of her husband. Apart from the legality of the notice which was issued under Section 34(l)(a); when no finding had been given by the Tribunal as to whether this sum of Rs. 24,500 was her income or the income of her husband, it was difficult if not impossible for it to have held that the Income-tax Officer had reason to believe that the assessee's income had escaped assessment