TaxTMI 
TaxTMI 
1953 (2) TMI 61
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....as that these questions did not arise from the appellate order of the Tribunal. The case was placed before my learned brother Deka, J. He delivered the judgment of the Court, dated 28th June, 1951, by which he directed the Tribunal to state the case and refer to this court the following two questions :- (1) Whether on the facts and in the circumstances of the case, the procedure followed by the learned Income Tax Officer in making a fresh assessment after the original assessment had been set aside by the learned Appellate Assistant Commissioner under Section 31 (3) (b) of the Indian Income Tax Act was in accordance with law. (2) Whether on the facts and in the circumstances of the case, the learned Income Tax Officer was justified in placing on the applicant Hindu undivided family the onus of explaining the amounts standing to the credit of Hanuman Prasad Agarwalla and certain other persons in the books of account of local banks and traders and in adding the said amounts to the total income of the said Hindu undivided family after treating them as omissions of sale and income from other sources not disclosed. Whether on the facts and in the circumstances ....
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....incomplete as profits of the accounting period could not be ascertained in the absence of vouchers for the bulk of the sales. In addition, certain items of credits in the names of different members of the family in the accounts of other local concerns were noticed. The items of deposit made and appearing in the account books of various concerns in the accounting period were as follows :- (1) As per account books of Nagarmal Agarwalla in the name of Kailash Prasad ... Rs. 69,100 (2) In the name of Hanuman Agarwalla in the ledger of Pookarmal ... Rs. 42,500 (3) In the name of Indrabati in the New Standard Bank ... Rs. 10,000 (4) In the books of Comilla Union Bank in the name of Miss Sakuntala ... Rs. 10,000 (5) In the books of Comilla Union Bank in the name of Kailash Prasad ... Rs. 5,000 Total... Rs. 1,36,600 On behalf of the assessee, it was stated that they had no knowledge of these accounts and, therefore, had no explanation to offer. 5. The Income Tax Officer also took into consideration the staggering rise in prices of all motor parts, cycles, cycle parts, etc., due to short supply during the accounting year, notwithstanding the promulg....
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.... gave them opportunity for the same. The affidavits filed then were held to be of no value at this stage, as no attempt was made even then to explain the source of money credited in the names of the family members." 8. The appeal was dismissed and the appellate order was again appealed from. Before the Appellate Tribunal, the assessment was challenged on the sole ground "that the Income Tax Officer should not have added back any cash credits when the scope of the enquiry was limited to the accounts of the appellant." This contention did not prevail. The Tribunal held that the procedure adopted by the Income Tax Officer was correct."On account of the failure to furnish details of the entire sales, resort to estimate by the Income Tax Officer was rightly made. In making the estimate, the Income Tax Officer was further justified in taking into consideration several credits standing in the names of the various members of the family which, however, did not find place in the account books of the assessee and which were not properly explained." 9. As stated above, it has been pointed out that question No. 2 of the reference was never raised before the Tribunal, and question No.....
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....to answer the question. This is another way of saying that if, on facts, it is found that it is not necessary to answer the question the Court may decline to do so. 12. Without expressing any opinion on the question whether a decision of the question referred on the merits is a way out of the difficulty, it may be said that this method of getting over the difficulty does not exhaust the alternatives available to the Court where it finds that the question not arising out of the order of the Tribunal, has been referred by the Tribunal in pursuance of a requisition from the High Court under Section 66 (2). It may not be open to the Bench which hears a reference to consider whether the order which the High Court had made under Section 66 (3) directing the Commissioner to state the case, was valid, (vide Thrikamji Jiwandas v. Commissioner of Income Tax [1924] 1 I TR 406., and Khemchand Ramdas v. Commissioner of Income Tax [1934] 2 ITR 216, but the Court is not bound to answer questions where, for instance, as in Commissioner of Income Tax, West Bengal v. Calcutta Agency Ltd. [1951] 19 ITR 191 (SC), the Tribunal improperly or incorrectly made a reference in violation of the provisions....
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.... answer it if it finds that it is not necessary to answer the question. 14. The Privy Council decision above referred to was followed in Seth Gurmukh Singh and Another v. Commissioner of Income Tax, Punjab., and it was held that the assumptions of facts made by the High Court at the mandamus stage are not binding on the Commissioner and it is open to him to point out their inaccuracy while making the reference. 15. The authorities considered above emphasise different aspects of the same question and do not, in my opinion, disclose any essential conflict of principles. The propositions which may be deduced from these cases are as follows :- That when a Bench of the High Court directs a Tribunal to state a case, it is not open to the parties or to that Bench or another Bench of the High Court to question the validity of the order. The competency or the power of a High Court to issue a mandamus can be questioned at the mandamus stage before its issue, and not when the reference is actually heard (vide Thrikamji Jiwandas v. Commissioner of Income Tax [1924] 1 ITR 406., Khemchand Ramdas v. Commissioner of Income Tax [1934] 2 ITR 216., and Tribune Trust, Lahore v. Commissi....
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....earned advocate for the assessee, has not pressed for an answer to the first question. The question was whether on the facts and in the circumstances of the case, the procedure followed by the Income Tax Officer in making a fresh assessment after the original assessment had been set aside by the Assistant Commissioner under Section 31 (3) (b) of the Indian Income Tax Act, was in accordance with law. The objection was that the procedure followed by the Income Tax Officer in his assessment after remand was not in accordance with law. The learned counsel did not try to point out any contravention of law which the procedure followed by the Income Tax Officer may have involved. We, therefore, decline to answer this question. He has also wisely resisted the temptation of asking for an answer to the question in the modified form proposed by the Tribunal. 16. The learned counsel has strenuously pressed for an answer to the second question. His grievance, so far as this question is concerned, is that the onus of explaining certain sums standing to the credit of Hanuman Prasad Agarwalla, his wife, son and daughter in the books of accounts of local banks and traders, was placed on the asse....
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....ibunal obviously wanted to rely on, may not be excluded from consideration. 18. Mr. Iyengar, the learned counsel for the Commissioner of Income Tax, Assam, has frankly conceded that there is no legal presumption that sums standing in the name of a member of a joint Hindu family belong to the joint family. There would, therefore, be no onus on the assessee to show that items standing in the name of a member of the joint family do not belong to it. Mr. Iyengar, however, urges that the question whether the sums standing to the credit of Hanuman Prasad, his wife and children belonged to the joint family or not was decided not on any view of onus, right or wrong, but on the facts of the case. The decision was on the merits, and the question of onus did not enter into the consideration of the taxing authorities as a determining factor. He has urged that it is not necessary, in these circumstances, to answer the question. There is no dispute as to the allocation of onus and no controversy centres round it, nor has it influenced the decision of the case against the assessee. We have not been able to discover from the orders of the Income Tax Officer and the Assistant Commissioner any st....
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....garmal Agarwalla. There was also a deposit of Rs. 42,500 in the name of Hanuman Prasad Agarwalla in the books of Pookarmal. Only one item stood in the name of Hanuman Prasad; other items stood in the names of his wife and children. At the appellate stage, he claimed that all these sums belonged to him. Dr. Pal has also stated that these items may be treated as belonging to Hanuman Prasad. Why it became necessary for Hanuman Prasad to make all these deposits in so many different names in the accounting period, was never explained. The source from which the money came also remained undisclosed. Assuming that Hanuman Prasad had separate sources of income, it should not have been difficult for the assessee or for Hanuman Prasad to disclose them. The failure on the part of the assessee and Hanuman Prasad to offer any intelligible explanation of these cash credits was an additional circumstance that was taken into account for rejecting the accounts of the assessee. 21. In the circumstances of this case, it would not be correct to say that the decision of the case rested on any wrong view of the onus. In fact, the onus of the burden of proof was not the basis of the decision. The ....
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....items are discovered which stand in the names of members of the family, including minors and females, who have no ostensible sources of income the need for demanding and explanation becomes apparent. At some stage of the proceedings, this had to be done. The items could not be utilised as giving rise to an inference against the assessees unless they were afforded a reasonable opportunity of explaining them. In asking for an explanation, the Income Tax Officer offered the opportunity in the discharge of a legal duty. It is noteworthy that at the appellate stage (after remand) the ground urged was not that there was any wrong allocation of onus or that the issue was decided on that basis, but that the Income Tax Officer had erred in dragging the alleged members of the family in support of his assessments without proper and sufficient enquiry into the matter of their connection with the family. It would appear that what was pressed was that sufficient enquiry had not been made. The complaint was not at all about onus. It was about the inadequacy of the investigation. At this stage, fresh affidavits were filed. Even these were considered and even these affidavits did not improve the po....
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....es referred to above are axiomatic. There can be no doubt that onus as a determining factor comes into play where either there is no evidence on either side or where it is equally worthless or where it is equally balanced. Where such is not the case and all available evidence is considered without reference to onus and, without relying on the circumstance that the onus lies on a particular party, the issue is determined on facts, and the onus cannot be said to have influenced the decision. This is exactly what has happened in this case. At a certain stage of the enquiry the cash credits came to the notice of the Income Tax Officer. He had evidence pointing to the conclusion that the account books of the assessee did not represent the true state of affairs. These items of cash credits seemed to complete the picture. He gave the assessee a chance to explain. After a full consideration of the circumstances a decision was given. This decision was on facts and obviously was not influenced by any view of onus under the law. In these circumstances, it is not necessary to answer the question. 25. In Jitanram Nirmalram v. Commissioner of Income Tax [1951] 19 ITR 501., one of the question....