COMMISSIONER OF INCOME TAX VS DR. K. GEORGE THOMAS, 1993 PTD-KERALA-HIGH-COURT-INDIA 823 (1991)

Income-tax---

----Reference--Income---Receipt of income---Amount whether received by assessee---Amount whether assessable---Questions of law---Indian Income Tax Act, 1961, 5.256.

Held, that the questions whether the amount was received by the assessee or whether it was received for and on behalf of the Indian Gospel Mission and whether it was assessable in the assessee's hands were questions of law.

P.K.R. Menon and N.R.K. Nair for the Commissioner

None appeared for the Assessee

JUDGMENT

K.S. PARIPOORNAN, J: --This is a petition filed by the Revenue under section 256(2) of the Income Tax Act, 1961, to direct the Income Tax Appellate Tribunal to refer the following two questions of law, formulated in paragraph 7 of the original petition for the decision of this Court:

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the money received by the assessee was for and on behalf of the Indian Gospel Mission?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that the money is not liable to be included in the assessee's hands?"

The respondent is an assessee to income-tax. The matter relates to the assessment year 1970-71 for' which the accounting period ended on December 31, 1969. During the previous year relevant to the assessment year, the total income of the assessee was arrived at by including a receipt of Rs.3,66,160. The said sum was a remittance from the U.S.A. in the name of Indian Gospel Mission. The plea of the Revenue was that this amount belonged to the assessee and was received by him and not by the Indian Gospel Mission. However, the Appellate Tribunal, in paragraph 9 of its order, concluded that the amount was received by the Indian Gospel Mission and credited it to their current account with the bank and operated by the assessee in his capacity as Vice-President of the Mission. The Appellate Tribunal followed up the above finding and held that the receipts cannot be said to be assessable to tax as the assessee's income. Thereafter, the Revenue filed an application under section 256(1) of the Income Tax Act, 1961, requesting the Appellate Tribunal to refer certain questions of law which arose out of the appellate order for the decision of this Court. The Appellate Tribunal declined the said request. Thereafter, this original petition is filed by the Revenue.

We heard counsel. On facts, the question as to whether the money was received by the assesses on his own or for and on behalf of the Indian Gospel Mission is a vital factor to be adjudicated. The Appellate Tribunal, on fads, held that the amounts or remittances from the U.S.A. were received by the assessee only for and on behalf of the Indian Gospel Mission. The character and the basis of the receipt is one that falls for consideration. Based on a finding on that question, the further question as to whether the said amount received by way of foreign remittances is includible in the assessee's hands will arise for consideration. We are of the view that the two questions, formulated in paragraph 7 of the original petition and extracted hereinabove, are questions of law which arise for consideration.

Therefore, we direct the Income Tax Appellate Tribunal to refer the said questions of law for the decision of this Court alongwith the statements of case within three months from the date of receipt of a copy of this judgment.

We find that substantially similar questions, though worded differently, have been directed to be referred to this Court by another Bench in Original Petition No. 7831 of 1985 for a different assessment year. The Tribunal may consider the decision in Original Petition No. 7831 of 1985 also and expedite the matter.

The Registrar shall send a copy of this judgment to the Income Tax Appellate Tribunal, Cochin Bench for compliance.

M.BA./2263/T