1968 (2) TMI 20 - HC - Income Tax

Commissioner exceeded Tribunal's order by including additional income under section 16(3) in assessment

V. PL. V. Vellayappa Chettiar Versus Commissioner of Income-Tax, Madras, And Others.

V. PL. V. Vellayappa Chettiar Versus Commissioner of Income-Tax, Madras, And Others. - [1969] 71 ITR 144 Issues:1. Scope of an order of the Commissioner of Income-tax in revising an assessment based on a Tribunal's order.2. Interpretation of a Tribunal's direction regarding inclusion of income under section 16(3) in an assessment.Analysis:1. The case involved a petition for certiorari filed by the assessee challenging the Commissioner of Income-tax's order revising the assessment. The Commissioner revised the assessment to include the share income of the assessee's wife and minor sons under section 16(3) of the Income-tax Act. The question was whether the Commissioner's action was within the scope of the Tribunal's order under section 66(5). The Tribunal's order directed registration of the firm and modifications consequential to the grant of registration in the hands of the partners. The Commissioner relied on this direction to include the additional income in the assessment. The Court examined whether the Commissioner's interpretation of the Tribunal's order was correct.2. The Tribunal's order did not explicitly direct the inclusion of income under section 16(3) in the assessee's assessment. The Tribunal declined to make any such direction when pressed by the revenue during the proceedings. The Court found that the Tribunal's direction for modifications consequential to the grant of registration did not automatically authorize the inclusion of additional income under section 16(3). The Court analyzed the Tribunal's jurisdiction under section 66(5) and section 33, emphasizing that the Tribunal's powers were limited to passing orders necessary to dispose of the case conformably to the judgment of the High Court in the reference. The Court concluded that the Tribunal did not intend to include the income under section 16(3) in the assessment based on its order.3. The Court referred to relevant case laws to interpret the Tribunal's powers and the procedure to be followed in disposing of an appeal conformably to the judgment of the High Court. It was highlighted that the Tribunal's powers post a High Court judgment were subject to the nature of the High Court's decision. The Court clarified that the Tribunal's direction at the end of its order did not encompass the inclusion of income under section 16(3) in the assessment. The Court allowed the petition, directing the Commissioner to reconsider the matter afresh, emphasizing that the Tribunal's order did not provide for the inclusion of income under section 16(3).