1978 (11) TMI 84 - AT - Income Tax

Summary

Issues:
1. Assessment of income from properties in the hands of the assessee.
2. Validity of assessments under section 147 read with section 148.
3. Jurisdictional challenge based on lack of jurisdiction not raised before ITO or AAC.

Analysis:
The judgment by the Appellate Tribunal ITAT CALCUTTA, delivered by Member P. V. B. Rao, addresses multiple appeals by the same assessee concerning the assessment of income from properties. The assessee had disclosed income from two properties in their returns, one owned by a trust executed by her husband and the other undisputedly owned by the assessee. The Income Tax Officer (ITO) assessed the income from both properties in the assessee's hands on a protective basis, including certain amounts as unexplained deposits. The assessee raised additional grounds challenging the inclusion of income from the property owned by the trust, but the Additional Commissioner of Income Tax (AAC) did not address these grounds.

The assessee raised various grounds in the appeals, including questioning the validity of assessments under section 147 read with section 148. The Departmental Representative objected to entertaining challenges to the assessments based on lack of jurisdiction, arguing that it was not raised before the ITO or AAC. However, the assessee had filed a writ petition in the High Court challenging the assessments on multiple grounds.

The Tribunal set aside the assessments, highlighting that the assessments were made on a flawed basis. The ITO failed to determine whether the property owned by the trust should be separately assessed, despite the assessee's claim and supporting registered trust deed. The Tribunal emphasized the necessity for the ITO to thoroughly investigate the trust's genuineness, potential application of section 64, and the trustees to be assessed. Consequently, the Tribunal directed the ITO to conduct fresh assessment orders considering the trust's status and the rightful assessment of income from the property owned by the trust.

In conclusion, the appeals were allowed, and the assessments were set aside for a comprehensive reevaluation by the ITO in accordance with the Tribunal's observations and legal requirements.