1953 (3) TMI 34 - HC - Income Tax

Summary

Issues:
1. Discrepancies in the assessment of income between the Income-tax Officer and the assessee's books of account.
2. Difference of opinion between the members of the Income-tax Appellate Tribunal.
3. Legality of the President's order in determining the assessment amount.
4. Interpretation of Section 5A(7) of the Indian Income-tax Act regarding the majority opinion on the assessment amount.

Analysis:
1. The case involved discrepancies in the assessment of income between the Income-tax Officer and the assessee's books of account. The Income-tax Officer rejected the books of account and estimated total sales of bullion, resulting in an addition to the income as disclosed by the books. The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal were involved in the appeals process.

2. A difference of opinion arose between the members of the Income-tax Appellate Tribunal regarding the assessment amount. The Judicial Member and the Accountant Member held differing views on the adjustment needed in the assessment based on the discrepancies found in the stock records. This difference led to a reference to the President of the Tribunal under Section 5A(7) of the Income-tax Act.

3. The President of the Tribunal determined the assessment amount but faced challenges regarding the legality of the order. The argument centered on whether the President had the jurisdiction to hear the reference and make a decision without a clear majority opinion from the Tribunal members. The President's order was deemed legally invalid due to the lack of a majority opinion on the assessment amount.

4. The interpretation of Section 5A(7) of the Income-tax Act was crucial in determining the legality of the President's order. The section required that in cases of a difference of opinion among Tribunal members on the assessment amount, the President or the third member must agree with the assessment figure proposed by one of the two differing members. Taking a different view on the assessment amount was deemed impermissible under the section.

In conclusion, the reference to the President of the Tribunal was found to be incompetent, and the case was directed to go back to the Income-tax Appellate Tribunal for proper handling in accordance with the law. The legal validity of the President's order was questioned due to the lack of a clear majority opinion on the assessment amount, highlighting the importance of adhering to the statutory provisions outlined in the Income-tax Act.