1998 (10) TMI 73 - HC - Income Tax

High Court Upholds Tribunal Decision on Firm Registration & Benamidar Status; Cross-objections Permissible

Commissioner Of Income-Tax Versus Purbanchal Paribhan Gosthi

Commissioner Of Income-Tax Versus Purbanchal Paribhan Gosthi - [1998] 234 ITR 663, 152 CTR 102 Issues involved: The judgment involves two main issues: 1. Whether the Tribunal was justified in accepting the cross-objection of the assessee regarding the registration of the firm in an appeal by the Revenue. 2. Whether the Tribunal was correct in allowing registration by determining that the daughter-in-law of a certain individual was not a benamidar.Issue 1: Registration of the Firm The Income-tax Officer initially assessed the assessee and held Shrimati Anjali Barthakur as the benamidar of Sri P. N. Barthakur, while also denying registration to the firm. The Appellate Assistant Commissioner upheld this decision. The Commissioner of Income-tax appealed to the Income-tax Appellate Tribunal, which dismissed the Revenue's appeal and allowed the cross-objections of the assessee. The Tribunal's decision was challenged through a writ application by the Revenue, leading to the reference of the questions to the High Court.Issue 2: Cross-objections and Benamidar Status The Revenue contended that the assessee, by not filing an independent appeal, should not have been allowed to raise cross-objections on points not included in the Revenue's appeal before the Tribunal. Additionally, the Revenue argued against the Tribunal's finding that Anjali Barthakur was the benamidar for Sri P. N. Barthakur. The High Court analyzed the provisions of Section 253(4) of the Income-tax Act, 1961, and Rule 22 of the Income-tax (Appellate Tribunal) Rules, 1963, to determine the validity of cross-objections and the scope of challenging an appellate authority's order.The High Court concluded that Section 253(4) allows both the assessee and the Assessing Officer to file cross-objections against the order in appeal, and the Tribunal must decide such cross-objections as if they were appeals. Rule 22 further clarifies the registration and treatment of cross-objections as appeals. The Court emphasized that cross-objections need not be limited to the points raised by the opposite party in the main appeal, providing parties the opportunity to challenge various aspects of the appellate authority's order.Regarding the benamidar status of the daughter-in-law, the Court determined that her lack of knowledge about certain financial matters did not establish her as a benamidar for her father-in-law. Therefore, the Court answered both questions in the affirmative and in favor of the assessee, upholding the Tribunal's decision on registration and benamidar status.