High Court Of Madras
Mrs. Visalakshmi Gandhi vs. CIT
Section 254(2)
Asst. Year 1985-86
N.V. Balasubramanian & K. Raviraja Pandian, JJ.
Tax Case No. 84 of 1998
12th November, 2002
Counsel Appeared
P.P.S. Janarthana Raja, for the Applicant : T. Ravikumar, for the Respondent
JUDGMENT
N.V. BALASUBRAMANIAN, J. :
The Tribunal, in pursuance of the directions of this Court has stated a case and referred the following questions of law in relation to the assessment of the assessee for the asst. yr. 1985-86 :
“1. Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that there is no error apparent on the face of records ?
2. Whether, on the facts and circumstances of the case, the Tribunal was right in law in declining to remand the matter to the assessing authority affording an opportunity to the applicant to prove the source of income ?”
The brief facts necessary for the disposal of the tax case reference are as under : The assessee is the wife of a senior advocate practising in this Court. There were three assessment made, one on the assessee’s husband in his individual capacity, another in the name of the assessee’s husband as Karta of the joint family and the third on the assessee. The assessments were made consequent to a search in the residential premises of the assessee and her husband in the year 1986 and the question that arose in all assessment proceedings was regarding the assessability of a sum of Rs. 85,000 which represents the money advanced in a promissory note standing in the name of the assessee, Mrs. Visalakshmi Gandhi, and in whose hands the same has to be assessed. The assessment on the assessee’s husband was made on regular basis including the said sum in his assessment and other two assessments, one on the husband of the assessee as Karta of the HUF and the other on the assessee, were made including the same amount on a protective basis. All the three assessees preferred separate appeals before the appellate authority, viz., Dy. CIT(A), and the CIT respectively. In the appeal preferred by the HUF, the case of the HUF was that the said sum had come out of agricultural income of the HUF and it was accepted by the Dy. CIT(A). Accordingly, the other two appeals were decided in the light or order passed by the Dy. CIT(A) in the case of the HUF.
The Department carried all the three matters in appeal before the Tribunal and the Tribunal found that at the time of search, the assessee’s husband has given a statement to the effect that the money was advanced by his wife and the assessee’s husband disowned the same in his individual capacity as well as the Karta of the HUF. The Tribunal also found that nearly after one month from the date of search, the assessee gave a sworn statement accepting that she advanced the money out of her own money. The assessee also explained the sources for the amount; (i) out of her savings and (ii) out of the money received from a firm in which she was a partner. The Tribunal considered all the three appeals together and took note of the fact that the extent of income shown by the joint family against the extent of the lands appeared to be disproportionate, and observed that the assessee did not give any details regarding the nature of crops that were raised. The Tribunal therefore held that in the absence of details, the appellate authority, viz., the Dy. CIT(A) was not justified in taking the view that the assessee, viz., the HUF had sufficient income and sufficient funds at its disposal to advance money to third parties. The Tribunal, taking note of the statements made by the assessee’s husband and by the assessee and also the fact that revised returns were filed declaring that the amount advanced came out of the agricultural income after a long delay, came to the conclusion that it was an afterthought to cover up the situation. The Tribunal, therefore set aside the order of the Dy. CIT(A) wherein it was held that the income belonged to the HUF. The Tribunal, however, on the basis of the statement made by the assessee as well as by her husband, came to the conclusion that the money was rightly assessed in the hands of the assessee. The Tribunal also took note of the fact that the revised returns were filed on behalf of the HUF declaring huge agricultural income not only for the asst. yr. 1985-86, but also for the asst. yrs.
1983-84 and 1984-85, unrelated to the extent of the lands owned, and held that the amount advanced belonged to the assessee. In this view of the matter, the Tribunal directed that the amount should be computed in the hands of the assessee, and deleted the additions made in the assessments of the assessee’s husband both in his individual capacity as well as the Karta of the HUF. Accordingly, the Tribunal disposed of all the appeals.
The assessee thereafter filled a petition under s. 254(2) of the IT Act, 1961, for rectification of ‘the mistake apparent from the record’ in the order of the Tribunal and to cancel the order passed by the Tribunal and to remand the matter back to the assessing authority for giving the petitioner an opportunity to show cause against the assessment of the amount as the undisclosed income of the petitioner or in the alternative, the petitioner should be given a sufficient opportunity before the Tribunal itself in that regard. The Tribunal held that though the assessee filed the petition for rectification seeking an opportunity of being head either by the Tribunal or by the lower authority, yet, a reading of the affidavit filed by the assessee did not show what was the mistake apparent from the record. The Tribunal also found that the assessee never claimed before the Tribunal any opportunity to be given for the production of materials in support of her case. The Tribunal held that the matter was disposed of on available materials on record and hence, the prayer should for in the miscellaneous petition cannot be granted as there was no error apparent from the record. It is, against the order rejecting the petitioner for rectification, the present reference has been made, at the instance of the assessee, on the basis of the directions of this Court.
We heard Mr. P.P.S. Janarthana Raja, learned counsel for the assessee and Mr. T. Ravikumar, learned junior standing counsel for the Revenue. The submission of Mr. P.P.S. Janarthana Raja, learned counsel was that the observation of the Tribunal that the extent of income shown against the extent of the lands appeared to be disproportionate is not correct as the assessee had produced all the materials and the materials do show the extent of the lands owned by the HUF and the nature of the crops, namely, sugarcane and hence, all the materials were available on record, but the Tribunal failed to consider the materials at the time of disposal of the appeal. He also submitted that the assessee’s husband is a leading senior advocate of this Court and the Tribunal should have considered that it would have been fairly easy for him to give periodically a portion of his income to the assessee and hence, the Tribunal should be directed to consider the petition on merits.
We are unable to accept the submission of the learned counsel for the assessee. It must be remembered here that there were three assessments; one in the hands of the assessee, another in the hands of the assessee’s husband in his individual capacity and the third in the hands of the HUF. The Tribunal considered the question whether the HUF would have sufficient resources to advance the money covered in the promissory note in the appeal filed in the case of HUF and held that the HUF had no sufficient funds at its disposal to advance loans to third parties. Therefore, it is not open to the assessee to challenge the finding rendered in the appeal relating to the HUF in the petition for rectification filed in her individual case. We are of the view that by the miscellaneous petition preferred to rectify the mistake in the order passed in the assessee’s appeal, it is not open to her to contend to set aside the finding rendered in another assessee’s case, namely, HUF, though she might be a member of the joint family and all the appeals were heard together. Secondly, the Tribunal observed that the HUF did not give any details regarding the nature of crops that were raised and the extent of income shown against the extent of the lands appeared to be disproportionate. These are all pure factual findings and it cannot be stated that there is a mistake apparent from the record in the finding of the Tribunal. Moreover, the statement given by the assessee after a period of nearly one month from the date of search accepting that the money was advanced by her was never retracted, nor the assessee’s husband retracted his statement given earlier during the course of search. Moreover, the plea that the assessee’s husband was periodically giving a portion of his income to the assessee was not advanced either before the Tribunal, nor any material was produced.
The expression, ‘mistake apparent from the record’ has been subject-matter of several decisions of the Supreme Court and it is well-settled that for a mistake apparent from the record’ it must not involve a detailed inquiry and where more than one plausible view is possible, it cannot be regarded as a mistake apparent from the record. We are of the view that the finding of the Tribunal that the HUF did not give details regarding the details or the nature of crops or the fact that the extent of income shown against the extent of the lands appeared to thedisproportionate does not give rise to a ‘mistake apparent from the record’ as more than one view is possible. It is true that we are not concerned with the correctness of the earlier order of the Tribunal, nor we are concerned with the reasoning given by the Tribunal for the conclusion it arrived at earlier as we are not sitting either in appeal or considering a reference against the earlier order of the Tribunal.
Further, the assessee in her petition has also not stated that there was certain glaring mistakes in the order of the Tribunal calling for rectification. As a matter of fact, it was found that the assessee had not pointed out any mistake in the order of the Tribunal. The petition filed by her clearly shows that the assessee sought for the remand of the matter back to the appellate authority or the AO to show cause against the assessment of the amount as her undisclosed income. In the alternative, she pleaded that the assessee should be given an opportunity in the Tribunal itself. The prayer sought for implies that the assessee has not produced materials either at the time of appeal and she wanted an opportunity to place fresh materials before the AO or the appellate authority or the Tribunal, as the case may be, and hence, that would not constitute a mistake apparent from the record. The assessee could have asked for more time at the time of hearing of the appeal to assemble all available evidence and to produce the same, if the time was needed. The assessee had not done that, and it is not open to the assessee to complain in the rectification proceedings that the matter should be remitted. We, therefore, hold that the Tribunal was justified in holding that seeking an opportunity to be heard either by the Tribunal or to remit the matter to the lower authorities does not give rise to a mistake apparent from the record. It is not the case of the assessee that she sought an opportunity before the Tribunal at the time of hearing of appeal to produce certain materials which was denied by the Tribunal. In the circumstances, we are of the view that the Tribunal was correct in holding that there was no error apparent from the record which called for rectification of its order.
Accordingly, we answer the question of law referred to us as under : First question :
We answer the question in the affirmative, against the assessee and in favour of the Revenue. Second question :
We also answer the question in the affirmative, against the assessee and in favour of the Revenue as the Tribunal was right in declining the request of the assessee to remand the matter while considering the petition for rectification. The prayer for remand should have been made at the time of passing of the original order in the appeal and the assessee has not taken any further step against that order by filing a reference application and in the rectification petition, it is not open to the assessee to claim that the Tribunal should remit the matter back to the assessing authority or the appellate authority or a further opportunity should be given to the assessee in the Tribunal.
In the result, both the questions of law referred to us are answered against the assessee, in favour of the Revenue. However, in the circumstances of the case, there will be no order as to costs.
[Citation : 260 ITR 323]