SMT. REKHA DEVI VS COMMISSIONER OF INCOME-TAX
1998 P T D 2244
[221 I T R 888]
[Madhya Pradesh High Court (India)]
Before A.R. Tiwari and N. K. Jain, JJ
Smt. REKHA DEVI
versus
COMMISSIONER OF INCOME-TAX
Miscellaneous Civil Cases Nos. 149 to 154, 156 and 157 of 1989, decided on 14/02/1996.
Income-tax----
----Reference---Total income---Inclusions---Tribunal holding assessee to be owner of house---Contribution of sum by husband towards purchase of house--- Tribunal directing that applicability of S.64 be examined by concerned Authority---No question of law arises---Indian Income Tax Act, 1961, Ss.64 & 256(2).
The Income-tax Appellate Tribunal found that the assessee was to be treated as the owner of a house in Indore. It also concluded that K, the husband of-the assessee, had invested a sizable sum in the purchase of the house and desired the question of investment to be re-examined with material seized at the time of raid and also with reference to past or current savings,
The Tribunal observed that the application of section 64 of the Income-tax Act, 1961, in the hands of K was also to be examined. The assessee filed an application under section 256(2) of the Act for a direction to refer the question whether the Tribunal was justified in holding that section 64 was applicable:
Held, dismissing the application, that under section 256(2) reference can be sought only on any question of law arising out of the order of the Tribunal. The Tribunal did not specifically hold that the provisions of section 64 were applicable. It only wanted the question to be examined by the concerned authority. Therefore, no referable question of law arose from the Tribunal's order.
S.C. Bagdiya for the Assessee.
D.D Vyas for the Commissioner.
JUDGMENT
A. R. TIWARI, J.---The applicant/assessee has filed applications under section 256(2) of the Income Tax Act, 1961 (for short, "the Act"), registered as miscellaneous civil cases particularised above, seeking direction to the Income-tax Appellate Tribunal to state the cases and refer the proposed common question of law, as extracted below, for opinion of this Court:
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the provisions of section 64(1)(iv) of the Act are applicable and thereby directing the Income-tax Officer to base his fresh assessment on the assessment year 1973-74 when Smt. Rekha Devi (wife) hasp been held to be the owner of the house property in question?"
Briefly stated, the facts of the case are that the assessee, Kishanchand Gaganmal, was a liquor contractor. He expired. The applicant, Smt. Rekha Devi, his wife, is the legal representative of the late Shri Kishanchand. The assessment years are 1973-74, 1974-75, 1975-76, 1977-78, 1978-79 and 1981-82. The Tribunal in I.T.A No.297/(Ind) of 1983 and I.T.A. No.377(Ind) of 1983 (for the assessment year 1973-74), I.T.A. No.605/(Ind) of 1983 and C.O. No.89/(Ind) of 1983 (for the assessment year 1974-75), I.T.A. No.733/(Ind) of 1983 (for the assessment year 1975-76), I.T.A. No.163/(Ind) of 1984 (for the assessment year 1977-78), I.T.A. No.1221/(Ind) of 1984 (for the assessment year 1978-79), I.T.A. NO. 1222/(Ind) of 1984 and C.O. No. 1/(Ind) of 1985 (for the assessment year 1981-82), I.T.A. Nos.270/ (Ind) of 1983 and 308/(Ind) of 1983 (for the assessment year 1973-74 and I.T.A. No.154/(Ind) of 1984 (for the assessment year 1977-78) passed the orders on December 10, 1986, with three observations, covered under (a) to (c) vide paragraph 15 directing the income-tax Officer to make fresh assessments m accordance with law after taking into consideration the observations. One of the three observations, as is relevant for the purposes of the disposal of these miscellaneous civil cases, is "question of application of section 64 of the Act in the hands of Kishanchand is also to be examined". The applications numbered 46/(Ind) of 1987, 47/(Ind) of 1987, 48/(Ind) of 1987, 49/(Ind) of 1987, 50/(Ind) of 1987, 51/(Ind) of 1987, 52/(Ind) of 1987 and 53/(Ind) of 1987 were filed under section 256(1) of the Act which were rejected by the Tribunal. The applicant has, therefore, filed these miscellaneous civil cases under section 256(2) of the .Act for the direction, as noted above.
We have heard Shri S.C. Bagdiya, learned counsel for the applicant/assessee, and Shri D.D. Vyas, learned counsel for the non-applicant/departmentin all these cases.
The principal-question in these cases before the Tribunal was as to who is the real owner of House No.32, Old Sindhi Colony, Indore. The Tribunal found that Smt. Rekha Devi (applicant) is to be treated as owner of this house. The Tribunal also concluded that Shri Kishanchand (husband of Smt. Rekha Devi) invested a sum of Rs.85,500 in the purchase of the house and thus held that the question investment was required to be re-examined with reference to the material seized at the time of raid and also with reference to the past or current savings, if any. In this context, the Tribunal also observed that the question of application of section 64 of the Act in the hands of Kishanchand was also to be examined. On this basis, the applicant proposed the aforesaid question.
Section 64 is captioned as "Income of individual to include income of spouse, minor child, etc." Its subsection (1)(iv) provides as under:
"(iv) subject to the provisions of clause (i) of section 27, to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart;"
As noted above the question formulated in these cases is as to whether the Tribunal justified in holding that the provisions of section 64(1)(iv) are applicable, whereas the observations, as noted above, only manifested that---"question of application of section 64 of the Act in the hands of Kishanchand is also to be examined."
It is thus clear that the Tribunal did not specifically hold that the provisions are applicable. The observations only mean or could mean that the aforesaid question was left to be examined by the concerned authority. As the applicability is not held by the Tribunal, demonstrably the aforesaid question, as proposed, does not arise from the order of the Tribunal.
In view of the aforesaid position, permitting no obscurity, it is clear that the proposed question, not arising from the order of the Tribunal, is not properly presented.
The scheme of the law is again not in tenebrosity. 'Under section 256(1) of the Act, the assessee or the Commissioner may submit an application in the prescribed form to require the Tribunal to refer to the High Court any question of law arising out of such order, Under section 256(2) of the Act, the aggrieved party on adverse order of the Tribunal to the effect that no question of law arises, may approach this Court for direction to the Tribunal to state the case and refer the question. The gist of these provisions is that the reference can be sought only on any question of law arising out of the order in question. As we have seen above the applicability or otherwise of the aforesaid provisions is yet not decided and as such the aforesaid question cannot be said to arise out of the order passed by the Tribunal.
In view of the aforesaid position, we are satisfied that these applications are an exercise in futility and deserve the fate of dismissal.
Accordingly, we dismiss these applications leaving the applicant free to raise the aforesaid question before the appropriate forum, if so advised, as and when the occasion arose in that regard and on adverse decision to pursue further remedy as may be available under the law.
These miscellaneous civil cases are thus dismissed but without any order as to costs.
Counsel fee for each side in each case is, however, fixed at Rs.750, if certified. Retain this order in Miscellaneous Civil Case No. 149 of 1989 and its copy each shall be placed in the connected miscellaneous civil cases, as particularised above, for ready reference.
M.B.A./1340/FCApplication dismissed.