1984 (3) TMI 93 - AT - Income Tax

Summary

Issues:
1. Whether the assessee was obligated to declare the share income of his wife in his personal return.
2. Whether the decision in the case of Madho Prasad applied to the assessee's case.
3. Applicability of section 147(a) and section 147(b) to the case.
4. Interpretation of the Supreme Court's decision in V.D.M.RM.M.RM. Muthiah Chettiar v. CIT [1969] 74 ITR 183 in relation to the obligation to declare income of spouse.
5. Assessment of the income of the assessee's wife in his assessment as per the decision in the case of Madho Prasad.

Analysis:
1. The original assessment of the assessee was revised to include an amount that came to his wife's share from a partnership firm. The Income Tax Officer (ITO) initiated proceedings under section 147(a) of the Income-tax Act, 1961, to assess this amount in the hands of the assessee. The Commissioner (Appeals) held that the assessee was obligated to declare his wife's income in his return, as provided for in the Act, and dismissed the appeal.
2. The assessee contended that he was not bound to show his wife's income based on a Supreme Court decision. The department argued that a later Supreme Court decision distinguished the earlier case. The Tribunal noted that the Supreme Court in a subsequent case held that post-1972, it was obligatory to declare the spouse's income in the return. The Tribunal disagreed with the assessee's interpretation of the Allahabad High Court's decision in a similar case.
3. The Tribunal held that the assessee was obligated to declare his wife's income even before the specific court decision on the matter. The non-declaration of the wife's income constituted an omission of material facts for assessment purposes. The Tribunal upheld the application of section 147(a) in the case.
4. The Tribunal concurred with the Commissioner (Appeals) and held that the income of the assessee's wife should be assessed in the assessee's return as per the decision in the case of Madho Prasad. The Tribunal dismissed the appeal, affirming the assessment of the wife's income in the assessee's assessment.