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PETITIONER: SMT. KILASHO DEVI BURMAN & ORS.

       Vs.

RESPONDENT: COMMNR. OF INCOME-TAX, WEST BENGAL CALCUTTA

DATE OF JUDGMENT:       08/02/1996

BENCH: BHARUCHA S.P. (J) BENCH: BHARUCHA S.P. (J) AHMAD SAGHIR S. (J)

CITATION:  JT 1996 (2)   555        1996 SCALE  (1)801

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T BHARUCHA . J.      This is  an appeal  by special leave. The order that is impugned was  passed by  the High  Court at  Calcutta in  an income-tax reference.  The questions that the High Court was called upon to answer were :      "1. Whether on the facts and in the      circumstances of  the  case,  there      was a valid assessment on an H.U.F.      for the assessment year 1955-56?      2.    If  the  answer  to  question      no.1 is  in the  affirmative, Then,      whether on  the facts  and  in  the      circumstances  of   the  case,  the      assessments for  1958-59 to 1962-63      in the status of H.U.F. are valid?"      The reference  related to  Assessment Years  1958-59 to 1962-63, the relevant previous years whereof were B.S. years 1364 to  1368. The  assessee was Rash Behari Das Burman, who was governed  by the  Mitakshara school  of Hindu law. It is unnecessary for the purposes of this decision to go into his family history,  which is  referred to both in the Statement of Case  placed before  the High  Court by  the  Income  Tex Appellate Tribunal  and the judgment of the High Court. What we now  set out is what is relevant and it is taken from the Statement of  Case. For  the  Assessment  Year  1955-56  the assessee submitted  a  return  dated  14th  November,  1957, describing himself  as the karta of his H.U.F. An assessment was said  to have  been made  on the  H.U.F. The  assessment order on the record of the Revenue bears no signature. There is no  signed copy of the assessment form. There is a demand notice dated 10th April, 1958 with some initial or signature on it.  According to  the  assessse  neither  the  statutory notices nor  the demand  notice nor the assessment order had been received.  On the  record there  is an  acknowledgement slip bearing  the date  25th April, 1958 signed by one Phool

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Singh. According  to the  assessee, there was no such person who had  any authority  to receive any notice on his behalf. There was  no material to show that the demand raised in the demand notice had been paid by the assessee.      The assessee  filed a partition suit (bearing No.665 of 1955 in  the Calcutta  High Court). A settlement was arrived at. The  properties were  to be divided by metes and bounds, but that  remained to be done when the Statement of Case was drawn by the Tribunal.      For the Assessment Years 1956-57 to 1961-62, no notices were issued to the H.U.F. under Section 22 of the Income Tax Act, 1922.  Similarly, for  the Assessment  Year 1962-63, no notice was  issued to  the H.U.F.  under Section  139 of the income tax  Act, 1961.  the income from the properties which were covered  by the  partition suit  were returned  by  and assessed in the hands of the erstwhile members of the H.U.F.      The Income  Tax  Officer  thereafter  took  proceedings under Section  147(a)  of  the  income  tax  Act,  1961  and concluded that the assessee’s H.U.F. had escaped assessment; this was  on the  basis that  no genuine partition had taken place  and  that  the  assessee  had  made  a  return  which misrepresented the  facts. The  I.T.O.  started  proceedings under Section  148 for the Assessment Years 1958-59 to 1961- 62 and under Section 139(2) for the Assessment year 1962-63. The assessee  filed ’nil’  returns under protest. The I.T.O. rejected the  assessee s  contention and made assessments on the H.U  F. The  assessee appealed  but, except  for certain reduction in  the  quantum,  the  orders  of  the  ITO  were affirmed.      The assessee  appealed to  the Tribunal.  The  assessee urged that during the relevant assessment years there was no H.U.F and  no valid proceedings thereagainst could be taken. It was  also urged  that the  H.U.F. had never been assessed and  that,  therefore,  there  was  no  reason  to  make  an application under  Section 25A of the 1922 Act. On behalf of the Revenue it was submitted that there was an assessment on the H.U.F.  as was clear from the order for A.Y. 1955-56 and that, so  long as  that assessment stood, it was permissible to proceed against the H.U.F. for the H.U F. was presumed to exist until  an order  under Section 25A of the 1922 Act was passed. The  Tribunal went  into the  question as to whether there was  an assessment  on the  H.U.F. for  the Assessment year 1955-56. Its conclusions were :      "(i) There was no signed assessment      order;      (ii) even  if a  demand  notice  is      taken to  exist in  this case,  the      assessment is  invalid as, in spite      of there  being a  positive  demand      thereunder, it  had not been served      on the assessee;      (iii) if there was no assessment on      the H.U.F. (for 1955-56), there was      no need on the part of the assessee      to come forward with an application      under Section  25A as  that section      contemplated an  application  being      made thereunder only when there was      already  an   assessment   on   the      H.U.F.;      (iv) the  absence of an application      under section  25A could not, under      these   circumstances,   give   the      Income-tax     authorities      any      jurisdiction to proceed against the

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    family as such;      (v) section 25A(3) had no operation      because there  was no assessment on      the  family,  the  disputed  H.U.F.      being in  the same  position  as  a      dead assessee  whose  income  until      Section 24B  was enacted  could not      be subjected to tax (see Ellis Read      vs. C.I.T. 5 I.T.C. 100) and      (vi) the  assessment in  the status      of an  H.U.F. when  the family  had      ceased to exist had to be set aside      as it was not valid."      The Revenue  sought  a  reference  to  the  High  Court contending, among other things, that the factual findings of the Tribunal  were  "unsupported  by  any  evidence  and  is unreasonable  any   perverse".  The  Tribunal  modified  the questions suggested  and framed  the two questions which are quoted above.  Having regard  to the  frame of the questions that the  Revenue wanted  the Tribunal  to refer to the High Court, lt  was, in  our view,  open to  the  High  Court  to consider the record before the Tribunal to determine whether the Tribunal’s factual conclusions were perverse.      The High  Court  in  a  reference  under  the  taxation statutes  exercises   advisory  jurisdiction  in  regard  to questions of  law. It  is only  when  it  has  before  it  a question that  asks  whether  the  Tribunal  has,  upon  the evidence on  record before it, come to a conclusion which is perverse that it may go into facts for this is a question of low. A  conclusion if  perverse only  if it  is such that no person, duly  instructed, could, upon the record before him, have reasonably come to it.      In the  instant case,  the High  Court placed  reliance upon the  acknowledgement slip dated 25th April, 1968 signed by Phool  Singh. lt  said, "Records show this Phool Singh to have received  a number of notices on behalf of the assessee on widely  separated dates".  The "records"  which the  High Court referred  in was  a  statement  of  "Facts  which  are admitted  and/or   found  by  the  Tribunal  and  which  are necessary for  drawing up a statement of the case (vide para 3 of  the Reference  application)" which  was annexed to the Revenue’s  reference   application.  This   statement  said, "Records show  this Phool Singh to have received a number of notices on  behalf  of  the  assessee  on  widely  separated dates". The  Statement of Case does not say this about Phool Singh.      It is  the Tribunal that finds facts. It sets these out in the Statement of Case whereby it retries questions of law to the  High Court The High Court, in reference proceedings, cannot go behind the facts found. Where the High Court is of the view  that it  is requisite  that facts other than those found need  to be ascertained it must call upon the Tribunal to submit  a Supplemental  Statement of  Case. Even when, as here, the  High Court  is required  to  decide  whether  the findings of  fact reached  by the Tribunal are perverse, the High Court  is continued to the evidence that was before the Tribunal. The  High Court  cannot look  at evidence that was not  before  the  Tribunal  when  it  reached  the  impugned findings to hold that these findings are perverse.      The statement  of "admitted"  facts was  placed by  the Revenue before  the Tribunal as an annexure to its reference application That  the Statement  of Case does not state that Phool Singh  had received  earlier notices  on behalf of the assessee shows that the Tribunal had not so found that there is no  mention of  this at all suggests that the Revenue did

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not place  this argument  and the supporting material before the  Tribunal.  The  High  Court  could  have  required  the Tribunal to  ascertain  whether  Phool  Singh  had  received earlier notices  on behalf  of the  assessee and  prepare  a Supplemental Statement  of Case,  out the  High Court  could not,  upon   these  "admitted"   facts,  have   reached  the conclusion  that   the  Tribunal’s  findings  of  fact  were perverse.      The F  High Court  based itself  upon the demand notice and the  acknowledgement slip  signed  by  Phool  Singh  and observed, "Unless an assessment order was passed under or in pursuance of  the Act  question of a notice of demand on the prescribed form  specifying the  High Court did not give due importance to  the fact that upon the record produced by the Revenue before  the Tribunal  there was no signed assessment from.      That  an   assessment  order   has  to   be  signed  is established by the judgment of this Court in Kalyankumar Ray vs. Commissioner of Income-tax, 191 I.T.R.634.It said:      "If,  therefore,   the   Income-tax      Officer first  draws  up  an  order      assessing  the  adjustments  to  be      made, directs the office to compute      the tax  payable on  that basis and      then   approves   of   it,   either      immediately or  some time later, no      fault  can   be  found   with   the      process, though  it  is  only  when      both  the  computation  sheets  are      signed or initialled by the Income-      tax  Officer   that   the   process      described in section 143(3) will be      complete.      ***           ***          ***      All these  decisions emphasis  that      all that  is needed  is that  there      must be  some writing initialled or      signed by  the  Income-tax  Officer      before  the  period  of  limitation      prescribed for  completion  of  the      assessment has expired in which the      tax payable  is determined  and not      that the form usually styled as the      "assessment  order"  should  itself      contain the  computation of  tax as      well."      A valid  assessment upon  the H.U.F. for the Assessment Year 1955-56  was central  to the case of the Revenue. Since at was  unable to  establish, by  the production of a signed assessment order  for that  year, that  there was such valid assessment, its  case fell  and the Tribunal was right in so holding. The  High Court was in error in concluding that the findings of the Tribunal on the record were perverse.      The appeal  is allowed.  The judgment  and order  under appeal is  set aside. The Judgment and order of the Tribunal is restored.      The respondents  shall pay  to the appellants the costs of the appeal.