1983 (2) TMI 58 - AT - Income Tax

Summary

Issues:
1. Taxability of minor son's income in the hands of the assessee under section 64(1)(iii) of the IT Act, 1961.
2. Condonation of delay in filing the appeal.
3. Validity of CIT's order under section 263 of the IT Act.
4. Merger of assessment order with the appellate order.
5. Compliance of assessment order with directions of the commissioner under section 263.

Analysis:

1. The primary issue in this case revolves around the taxability of the minor son's income in the hands of the assessee under section 64(1)(iii) of the IT Act, 1961. The original assessment of the assessee was set aside by the CIT under section 263 on the ground that the minor son's income should have been clubbed in the hands of the father instead of the mother. The assessee contended that once the minor's income was assessed in the mother's hands, it should continue to be assessed in her hands. However, the ITO included the minor's income in the father's income based on the Explanation to section 64. The Appellate Tribunal upheld the CIT's order, leading to the current appeal.

2. Another issue addressed was the condonation of the delay in filing the appeal. The assessee filed the appeal three days late, attributing the delay to the illness of the accountant responsible for filing the appeal. The Tribunal found the delay reasonable and condoned it after considering the explanations provided.

3. The validity of the CIT's order under section 263 was also challenged. The assessee argued that the CIT's order was illegal and non est, citing a decision of the Allahabad High Court. However, the departmental representative justified the order, stating that once upheld by the Appellate Tribunal, it was final unless reversed by a higher court.

4. The concept of the merger of the assessment order with the appellate order was discussed, highlighting a divergence of opinion among different High Courts. The Tribunal concluded that the CIT's jurisdiction under section 263 was rightly assumed, and the order was valid despite not considering a specific High Court decision.

5. Lastly, the compliance of the assessment order with the directions of the commissioner under section 263 was examined. The Tribunal found no fault with the reframed assessment order by the ITO and upheld the CIT's order, dismissing the appeal. The Tribunal concluded that there was no justification for interfering with the CIT's order.

In conclusion, the appeal was dismissed, affirming the decision of the CIT and upholding the taxability of the minor son's income in the hands of the assessee.