COMMISSIONER OF INCOME-TAX VS C. JOSEY NEROTH
1999 P T D 3090
[229 I T R 519]
[Kerala High Court (India)]
Before V. V. Kamat and P. A. Mohammed, JJ
COMMISSIONER OF INCOME-TAX
Versus
C. JOSEY NEROTH
O. P. Nos. 1.1579, 12161 and 11214 of 1995, decided on 03/07/1996.
Income-tax---
Reference---Question of law---Circulars of C. B. D. T. ---Amnesty circulars---Immunity given by circulars---Whether .can be availed of by assessees whose premises have been searched---Revised return filed subsequent to search---Whether a return filed under amnesty scheme-- Tribunal directed to refer question of law---Indian C.B.D.T. Circular No. 451, dated 17-2-1986 and C. B. D. T. Circular No. 441, dated 15-11-1985---Indian Income Tax Act, 1961, S.256(2).
The Income-tax Officer completed the assessments of the assessees for the assessment years 1983-84 and 1984-85 rejecting the contention of assessees that they were entitled to the benefits of the Amnesty Scheme. On appeal, the Commissioner (Appeals) affirmed the view of the Income-tax Officer. On further appeal, the Tribunal held that the revised returns filed by the assessees were to be considered as returns filed under the Amnesty Scheme. The Revenue filed an application under section 256(1) of the Income Tax Act, 1961, for referring a question of law. The Tribunal dismissed the application of the Revenue. On an application filed under section 256(2) for directing the Tribunal to refer a question of law:
Held, that a question of law, whether the Tribunal was right in law in holding that the revised return filed by the assessees subsequent to the search was to be considered as a return filed under the Amnesty Scheme, arose for reference.
A. V. Joy, Alukkas Jewellery v. CIT (1990) 185 ITR 638 (Ker.) ref
P.K.R. Menon and N.R.K. Nair for Petitioner.
C. Kochunni Nair, M.C. Madhavan and S. Vinodkumar for Respondent
JUDGMENT
P. A. MOHAMMED, J.---These are applications filed by the Commissioner of Income-tax, Trivandrum, under section 256(2) of the Income Tax Act, 1961, prying for a direction Income-tax Appellate Tribunal, Cochin Bench, to refer the following questions of law for decision of this Court:
"(1) Whether, on the facts and in the circumstances of the case and considering a search was conducted on the premises of the assessee under section 132 of the Income-tax Act, is the Appellate Tribunal right in law in holding that the revised return filed by the assessee subsequent to the search is to be considered as a return under the Amnesty Scheme?
(2) Whether the Appellate Tribunal is right in holding so when the answer to question No. 12 of the Central Board of Direct Taxes Circular No.451 (see (1986) 158 ITR (St.) 135, 137), dated February 17, 1986, categorically rules out any immunity for assessees whose premises have been searched by tax authorities?"
The assessment years involved in these applications are 1983-84 and 1984-85. The assessments were completed against the assessees fixing a total income of Rs.1,55,880 and Rs.2,02,881, respectively, for the aforesaid years. A contention was raised before the Officer that the assessees were entitled to the benefits of the amnesty Scheme. However, the said contention was rejected by the Income-tax Officer. On appeal the Commissioner of Income-tax (Appeals) has concurred with the view of the Assessing Authority that the benefits of the Amnesty Scheme could not be extended to the assessees for the aforesaid years. On further appeal, the Income-tax Appellate Tribunal came to the conclusion that the revised returns filed by the assessees were to be considered as returns filed under the Amnesty Scheme. In support thereof, the Appellate Tribunal has cited a decision of this Court in A. V. Joy, Alukkas Jewellery v. CIT (1990) 185 ITR 638 and also referred to the Board Circular No.451 (see (1986) 158 ITR (St.) 135), dated February 17, 1986. Aggrieved by the above order of the Tribunal, the Revenue filed a petition under section 256(1) of the Act seeking reference of the questions of law referred to above for the decision of this Court. However, the Tribunal dismissed those reference applications. It is under the above circumstances, the petitioners have filed the present applications for compelling reference under section 256(2) ofAct.
On a reading of the first question referred to above, the main contention of the Revenue appears to be that the return filed by the assessees subsequent to the search cannot be considered to be a return under the Amnesty Scheme. Learned standing counsel for the Revenue brought to our notice "the Amnesty circulars" issued by the Central Board of Direct Taxes (No.441, (see (1985) 156 ITR (St.) 165), F. No. 225/86/85-IT(A-II), dated November 15, 1985). Subsequent to the proclamation of the Amnesty Scheme, certain clarifications were issued in relation thereto. While reading the aforesaid clarifications, we have specifically noticed an answer to a question "can immunity given by the circulars be availed of by the assessees whose premises have been searched by the tax authorities?" The answer given is "No". We do not propose to come to a conclusion on this question because we are only at the stage of giving a direction to the Tribunal to refer the questions.
Learned standing counsel further brought to our notice that in a similar set of facts and circumstances this Court has directed the Tribunal to refer similar questions as per orders in O.P. Nos.3186 and 1696 of 1993.
In view of the above discussion, we direct the Income-tax Appellate Tribunal to state a case and refer the aforesaid questions of law for the decision of this Court under section 256(2) of the Income Tax Act, 1961, as expeditiously as possible, at any rate within a period of three months from today.
Communicate a copy of this judgment under the sea] of this Court and the signature of the Registrar to the Income-tax Appellate Tribunal, Cochin Bench, for compliance.
M.B.A./3059/FC Order accordingly.