Case Note & Summary
The appeal arose from an income-tax reference decided by the High Court at Calcutta concerning assessments made on a Hindu Undivided Family (HUF) for Assessment Years 1958-59 to 1962-63. The assessee, Rash Behari Das Burman, governed by the Mitakshara school of Hindu law, had filed a partition suit in the Calcutta High Court, and a settlement was reached to divide properties by metes and bounds, though the division remained incomplete when the Tribunal drew its statement of case. For Assessment Year 1955-56, the assessee filed a return as karta of the HUF, but the assessment order on the Revenue's record bore no signature, and no signed copy was produced. A demand notice dated 10 April 1958 had some initial or signature, and an acknowledgement slip dated 25 April 1958 was signed by one Phool Singh, but the assessee denied any authority and asserted that no statutory notices, demand notice, or assessment order were received. For Assessment Years 1956-57 to 1961-62, no notices were issued under Section 22 of the Income-tax Act, 1922, and for 1962-63, no notice under Section 139 of the Income-tax Act, 1961 was issued to the HUF. The Income-tax Officer later initiated proceedings under Section 147(a) and 148 of the 1961 Act and Section 139(2) for 1962-63, alleging that the HUF had escaped assessment because no genuine partition occurred and returns misrepresented facts. The assessee filed nil returns under protest, but the ITO made assessments on the HUF, which were upheld in appeal except for quantum reductions. The assessee appealed to the Income-tax Appellate Tribunal, which held that there was no signed assessment order, demand was not served, and since no prior assessment on the HUF existed, absence of an application under Section 25A of the 1922 Act did not confer jurisdiction; the Tribunal set aside the assessments. The Revenue sought a reference, and the High Court framed two questions: whether there was a valid assessment on HUF for AY 1955-56 and whether assessments for 1958-59 to 1962-63 in HUF status were valid. The High Court reversed the Tribunal, relying on the acknowledgment slip and a statement of admitted facts annexed to the Revenue's reference application that Phool Singh had received notices on behalf of assessee on widely separated dates. The Supreme Court allowed the assessee's appeal, holding that the High Court in a reference cannot go behind the facts found by the Tribunal as set out in the statement of case, and cannot rely on evidence not before the Tribunal. If additional facts were required, the High Court should have called for a supplemental statement of case. The Court also held that an assessment order must be signed as established in Kalyankumar Ray v. CIT, and since the Revenue could not produce a signed assessment order for AY 1955-56, no valid assessment on the HUF existed. Consequently, the Tribunal was right in setting aside the subsequent assessments. The Supreme Court restored the Tribunal's order and directed the Revenue to pay costs.
Headnote
A) Income Tax - Assessment of Hindu Undivided Family - Assessment order must bear signature - Income-tax Act, 1922 (Assessment provisions); Income-tax Act, 1961, Section 143(3) - The Revenue could not produce a signed assessment order or signed copy for Assessment Year 1955-56; the assessment order on record bore no signature and the demand notice was not proved served on assessee. The Supreme Court relied on Kalyankumar Ray v. CIT, 191 ITR 634, holding an assessment order requires some writing initialled or signed by the Income-tax Officer. Held that no valid assessment on the HUF for Assessment Year 1955-56 existed, and subsequent proceedings against the HUF were without jurisdiction, so Tribunal's setting aside was correct (Paras 1-4). B) Income Tax - Reference Jurisdiction of High Court - High Court bound by Statement of Case - Income-tax Act, 1922 and Income-tax Act, 1961 (reference provisions) - In a reference under taxation statutes, High Court exercises advisory jurisdiction on questions of law and cannot go behind facts found by Tribunal. If additional facts are required, High Court must call for a supplemental statement of case; it cannot rely on annexures to reference application not incorporated in Statement of Case. Held that High Court erred in relying on acknowledgement slips and 'admitted facts' annexure to hold Tribunal's findings perverse without calling for supplemental statement (Paras 1-4). C) Income Tax - Hindu Undivided Family and Partition - Section 25A application conditional on existing assessment - Income-tax Act, 1922, Sections 25A, 25A(3), 24B - The assessee was not required to file an application under Section 25A because no valid assessment on HUF for Assessment Year 1955-56 existed. Absence of application under Section 25A did not confer jurisdiction on Income-tax authorities to assess the family as such. Held that Section 25A(3) had no operation and assessments in HUF status after family ceased to exist were rightly set aside (Paras 1-4). D) Income Tax - Perversity of Tribunal Findings - Test for perverse conclusion - Income-tax Act, 1922 and Income-tax Act, 1961 - A conclusion is perverse only if no person duly instructed could reasonably come to it upon record before it. High Court while deciding perversity is confined to evidence before Tribunal. Held that Tribunal's factual findings were not perverse because there was no signed assessment order, and High Court's contrary conclusion was unsustainable (Paras 1-4).
Issue of Consideration
Whether there was a valid assessment on Hindu Undivided Family for Assessment Year 1955-56; Whether assessments for Assessment Years 1958-59 to 1962-63 in the status of HUF were valid; Whether High Court in income-tax reference could go behind facts found by Tribunal or rely on evidence not before Tribunal to hold findings perverse.
Final Decision
Appeal allowed. Judgment and order of High Court set aside. Judgment and order of Income-tax Appellate Tribunal restored. Respondents directed to pay costs to appellants.
Law Points
- Assessment order must be signed
- High Court in income-tax reference cannot go behind facts found by Tribunal
- High Court cannot rely on evidence not before Tribunal when deciding perversity of factual findings
- perversity test requires that no person duly instructed could reasonably come to conclusion
- absence of application under Section 25A does not confer jurisdiction if no prior assessment on HUF
- supplemental statement of case required for additional facts.
