1975 (1) TMI 30 - HC - Income Tax

Summary

Issues Involved:
1. Competence of the Income-tax Officer to reopen and reconsider cash credits.
2. Validity of the Tribunal's rejection of the reference applications as time-barred.
3. Legality of a single reference application for multiple appeals.
4. Procedural correctness in naming respondents in the reference application.
5. Allegation of delay in filing the writ petition.

Issue-wise Detailed Analysis:

1. Competence of the Income-tax Officer to reopen and reconsider cash credits:
The Tribunal held that the Income-tax Officer was not competent to look into the source of the cash credits while making reassessment in pursuance of the order of the Appellate Assistant Commissioner dated 12th November, 1957. This decision was challenged by the petitioners, arguing that the reassessment and inclusion of the cash credits were beyond the officer's jurisdiction and competence.

2. Validity of the Tribunal's rejection of the reference applications as time-barred:
The Tribunal dismissed four reference applications filed on 10th February, 1965, as time-barred. The petitioners contended that the Tribunal should have considered these applications and referred the question of law to the High Court. However, the court found no merit in this contention, stating that Section 66(1) of the Indian Income-tax Act, 1922, prescribes a 60-day limitation period for filing such applications. The Tribunal's rejection of the applications as time-barred was upheld, and the petitioners' remedy lay in applying to the High Court under Section 66(3).

3. Legality of a single reference application for multiple appeals:
The court examined whether one Reference Application (No. 1722 of 1964-65) was maintainable for all five Income-tax Appeals (Nos. 5881 of 1962-63 and 8109 to 8113 of 1963-64). The Tribunal had consolidated the appeals, which pertained to the assessment of the Hindu undivided family for the year 1951-52, and disposed of them by a common judgment. The court noted that when appeals are consolidated and decided by a single judgment, a single reference application is competent. The Tribunal's decision to dismiss the reference application on this ground was found untenable.

4. Procedural correctness in naming respondents in the reference application:
The Tribunal dismissed Reference Application No. 1722 of 1964-65, partly because the respondents were not properly described. The court held that the description of respondents as "Sahu Jagdish Prasad and others" was a formal defect. The Tribunal should have allowed the department to rectify this mistake instead of dismissing the application. The court cited precedents where similar formal defects were permitted to be corrected to ensure justice.

5. Allegation of delay in filing the writ petition:
The respondents argued that the writ petition was filed with inordinate delay. However, the court found that the petition, filed within nine months, did not suffer from inordinate delay or laches. It also noted that there is no rule of limitation for preferring an application under Article 227 of the Constitution of India.

Conclusion:
The writ petition was accepted, and the impugned order dated 27th January, 1966, was quashed. The Tribunal was directed to entertain the department's reference application (No. 1722 of 1964-65) and deal with it in accordance with the law. The petitioners were awarded costs, and the counsel's fee was set at Rs. 200.

Petition allowed.