1985 (2) TMI 95 - AT - Income Tax

Summary

Issues:
1. Assessment of income in a protective manner.
2. Discrepancy in age of the assessee leading to assessment as a minor.
3. Challenge to the protective nature of assessment.
4. Clubbing of income with father's income.
5. Legal implications of protective assessment.
6. Applicability of case laws in similar contexts.

Detailed Analysis:

1. The case involves the assessment of income in a protective manner by the Income Tax Officer (ITO) due to suspicions of tax avoidance. The assessee, a young man, disclosed an income of Rs. 10,000 for the relevant year. However, the ITO assessed the income at Rs. 29,500 on a protective basis, considering the assessee as a benamidar of his father to evade tax liabilities.

2. A discrepancy in the age of the assessee arose during the proceedings, where the school certificate indicated the assessee as a minor. The assessee claimed to be born in 1960, not 1963 as per the school certificate, supported by an affidavit and a medical certificate. The ITO concluded that the income belonged to the father, leading to the protective assessment.

3. The assessee challenged the protective assessment before the Appellate Assistant Commissioner (AAC), who restored the income figure declared by the assessee but maintained the protective nature of the assessment. The assessee then appealed to the Tribunal, disputing the assessment and claiming the income as his own.

4. The Tribunal emphasized that if the income truly belonged to the assessee, it would be assessed in his father's hands. The Tribunal highlighted that challenging the protective assessment aimed to relieve the father from tax liability, shifting the real question to the father's assessment. The Tribunal stated that the father could contest the income attribution even if accepted in the assessee's case.

5. Various legal authorities were cited, illustrating that the Tribunal cannot confirm a protective assessment if the income does not truly belong to the assessee. The Tribunal differentiated cases where the income was assessed protectively due to doubts, emphasizing the need for proper assessment in the concerned person's hands.

6. The Tribunal rejected the plea to make the assessment substantive, as it would not bind the father, who was not a party to the proceedings. The Tribunal criticized the ITO's futile exercise, advising proper communication with the ITO assessing the father for a conclusive decision on the income attribution.

In conclusion, the Tribunal dismissed the appeal, maintaining the protective assessment and highlighting the necessity for a comprehensive assessment in the father's case to resolve the income attribution issue conclusively.