2000 (9) TMI 2 - SC - Income Tax

Supreme Court Directs Tribunal to Refer Legal Question on Assessment Proceedings

The Supreme Court directed the Tribunal to refer a legal question to the High Court regarding the quashing of assessment proceedings for the assessment ... Quashing reassessment proceedings on legal ground - Distinction between findings of fact and questions of law - Reopening of assessment under section 147(a) of the Income-tax Act, 1961 - Duty of the Appellate Tribunal to draw up a statement of case and refer a question of law to the High CourtQuashing reassessment proceedings on legal ground - Distinction between findings of fact and questions of law - Reopening of assessment under section 147(a) of the Income-tax Act, 1961 - Duty of the Appellate Tribunal to draw up a statement of case and refer a question of law to the High Court - Whether the Tribunal's order quashing the reassessment for Assessment Year 1985-86 raised a question of law requiring a reference to the High Court, and whether the High Court erred in declining to call for such a reference. - HELD THAT: - The High Court treated the Tribunal's conclusions as findings of fact and therefore declined to call for a reference. A reading of the Tribunal's order shows that the reassessment was quashed on a legal ground - the Assessing Officer had not recorded any of the reasons relied upon for reopening the assessment - and the Tribunal expressly refrained from adjudicating the other issues because it quashed the reassessment on law. That characterisation converts the determinative point into a question of law rather than one of fact. Consequently the Tribunal was required to draw up a statement of case and refer that question of law to the High Court for its consideration. The High Court's failure to call for the reference was therefore in error.The Tribunal's conclusion amounted to a question of law and the Tribunal is directed to draw up a statement of case and refer that question to the High Court; the civil appeal is allowed.Final Conclusion: The High Court erred in treating the Tribunal's order as one of fact; the matter involves a question of law concerning the validity of reopening assessment for AY 1985-86 under section 147(a), and the Tribunal must draw up a statement of case and refer that question to the High Court. Civil appeal allowed; no order as to costs. The Supreme Court directed the Tribunal to refer a legal question to the High Court regarding the quashing of assessment proceedings for the assessment year 1985-86 reopened under section 147(a) of the Income-tax Act, 1961. The High Court's decision was found to be in error, and the civil appeal was allowed.