TaxTMI 
TaxTMI 
2009 (10) TMI 155
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....ct to the assessment years1996-97 and 1997-98. The primary question for consideration in these appeals is the same, whether or not Dr. Narendra Prasad and Dr. Leela Prasad, the two individual assessees, constitute an association of person, namely, M/s. Alok Nursing Home, within the meaning of section 2(31) of the Act The three learned authorities below have disposed of the matters by common orders, and these appeals are accordingly being disposed of by a common judgment. 2. It may be clarified that Dr. Leela Prasad, the appellant of M. A. No. 146 of 2004, died on February 19, 2009, leaving behind her heirs and legal representatives. Her heirs have been substituted and are permitted to pursue this appeal by order dated October 6, 2009. We shall refer to Dr. Leela Prasad deceased as the original appellant hereinafter. 3. A brief statement of facts essential for the disposal of the appeals may be indicated. The basic facts shall be drawn from M. A. No. 148 of 2004. On May 8, 1984, there was a search and seizure within the meaning of section 132 of the Act in the house and business premises of Dr. Narendra Prasad and the original appellant. They approached the Commission under the pr....
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....ulated by the Settlement Commission, in the subsequent assessment years also. 5. The returns submitted by the assessees were scrutinized by the learned Assessment Officer by her order dated November 12, 1997. She provisionally came to the conclusion that it was a case of income escaping assessment under section 147 of the Act and, therefore issued notice in terms of section 148 of the Act as to why Alok Nursing Home be not treated to be an association of persons of the two assessees. On a consideration of the materials before her, she came to the conclusion that the two assesses constitute an association of persons which has to be assessed and taxed accordingly. In other words, Alok Nursing Home as an association of persons of the two assessees have to be separately assessed and taxed, apart from the individual assessment of the two assessees. Aggrieved by the order, the two assessees and the Alok Nursing Home preferred separate appeals which have been allowed by a common order dated June 18, 2000, passed by the learned Commissioner of Income-tax (Appeals) at Patna, whereby he held that it is not proved that one of the two spouses have consciously formed an association of persons ....
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....t within the strict and hyper-technical view of law of section 147 of the Act, but is surely not a case of suppression of income. He next submits that the learned Third Member has travelled beyond the terms of the reference made to it by the two Members of the Tribunal which is in violation of the provisions of section 255(4) of the Act. He relies on the following reported judgments: (i) Jan Mohaminud v. CIT [1953] 23 ITR 15 (All); and (ii) Hanutram Chandanmul v. CIT [1953] 23 ITR 505 (All). 8. He submits in the same vein that it is not permissible for the learned Third Member to refer to section 167B of the Act. I also submits that the view taken by the Settlement Commission has been consistently followed in all the succeeding periods except the two periods in question. He has also submitted that the Settlement Commission is a full-fledged Tribunal, being part of the process of assessment proceedings and tax determination, and should normally be followed by the authorities in the following years except where there is change of circumstances Reliance may be placed on the judgment of the Supreme Court in CIT v. B. N. Bhattachargee [1979] 118 ITR 461. It is not open to the authori....
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....ered the submissions of learned counsel for the parties. The over-arching reality in the protracted proceedings is that the learned authorities under the Act have nowhere, and at no point of time, found the two assessees guilty of suppression of material facts or suppression of income, which goes to the credit of the two assessees. The authorities have come to the conclusion that the two constitute an association of persons, different and distinct from the two individual assessees, within the meaning of section 2(31) of the Act, on the basis of the facts and figures returned by the two assessees. Neither have they found the two assessees guilty of suppression of the material facts, nor has the Department come across fresh materials. It is evident from the operative portion of the Commission's order reproduced hereinabove that both the husband and the wife own the nursing home in equal proportions, and after taking into the rental income and the other income earned from the nursing home in those three assessment years, would be taxed in equal proportions at the hands of the two assessees. In other words, on the facts presented before the Commission, it did not come to the conclusion....
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....oming ever since 1982-83. How, when and in what manner Dr. Narendra Prasad and Dr. Mrs. Leela Prasad constituted an association of persons and in what manner and to what extent that aspect has to be found out. The Revenue Department has been accepting and assessing the income from Alok Nursing Home in the hands of doctor couple at the ratio of 50 per cent, each for long. Making a departure without bringing any material as pointed out above is not justified ...." 12. We are in this connection supported by the law laid down by the Supreme Court in the case of Radhasoami Satsang v. CIT [1992] 193 ITR 321, the relevant portion of which is reproduced hereinbelow for the facility of quick reference (page 329): "This court in Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) at page 10 stated: 'At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity.' Assessments are certainly quasi-j....