1972 (12) TMI 10 - HC - Income Tax

In this writ petition the CIT, has prayed for a writ of mandamus or other appropriate writ or order directing the ITAT to take up the department appeal and rehear the appeal under section 66(5) of the Indian Income-tax Act, 1922 and decide the appeal in conformity with the judgment of this court - since the Tribunal had jurisdiction to decide the question whether the remittance could be assessed at all in the hands of the individual and it give a finding that it could be assessed the dismissal of the appeal by the Tribunal was valid, also the department did not file a reference against the dismissal it did not even file a reference against the order u/s 66(5) it therefore cannot seek belatedly relief under article 226 of the Constitution

Summary

Issues Involved:
1. Jurisdiction of the Income-tax Appellate Tribunal to set aside the assessment order and direct a fresh assessment.
2. Validity of the Tribunal's decision to club the income of the individual and the Hindu undivided family (HUF) for assessment.
3. Correctness of the Tribunal's interpretation of the High Court's judgment.
4. Timeliness and laches in filing the writ petition.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Income-tax Appellate Tribunal:
The primary issue was whether the Tribunal had the jurisdiction to set aside the assessment on the petitioner as an individual and direct a fresh assessment. The High Court held that the Tribunal went beyond its jurisdiction in deciding that the individual and joint family should be separately assessed and in remanding the matter to the Income-tax Officer for fresh assessment from the stage of the returns. The High Court emphasized that the Tribunal could not adjudicate on the separate assessment of the individual and the HUF, as this was not the matter in dispute in the appeal before it. The Tribunal's order of remand was deemed improper as it did not set aside the Appellate Assistant Commissioner's order as wrong or unsustainable.

2. Validity of the Tribunal's Decision to Club the Income:
The Tribunal had initially held that the income of the individual and the HUF could not be clubbed and should have been assessed separately. It further concluded that the constructive remittance of foreign profits could not be included in the individual's assessment but had to be included in the assessment of the HUF. The High Court, however, held that the Tribunal overstepped its jurisdiction by making such a determination and that it was not competent to decide that the joint family received the foreign remittance and remand the proceedings for a fresh assessment.

3. Correctness of the Tribunal's Interpretation of the High Court's Judgment:
The High Court noted that the Tribunal's order was ambiguous, allowing for multiple interpretations. The Tribunal's concluding sentence, "the appeal is dismissed," was particularly contentious. The High Court did not conclusively accept either the department's interpretation that the remand was the real order or the assessee's interpretation that the dismissal was the final order. The High Court found that the Tribunal's order under section 66(5), which restored the Appellate Assistant Commissioner's order, was in line with its judgment, as the Tribunal had no jurisdiction to direct a fresh assessment.

4. Timeliness and Laches in Filing the Writ Petition:
The writ petition was also dismissed on the grounds of unreasonable and unexplained delay and laches. The Tribunal's order was made in 1957, the High Court's judgment was dated November 24, 1959, and the order under section 66(5) was made on August 22, 1960. The department's letter, treated as an application under section 35, was dated November 22, 1963, and the Tribunal dismissed this application on February 10, 1964. The writ petition was filed only on June 24, 1968. The High Court noted that if the department was aggrieved by the dismissal of the appeal, it should have sought a reference at that time. The delay of nearly eight years was deemed excessive, and the High Court refused to invoke its powers under Article 226 of the Constitution due to this delay.

Conclusion:
The High Court dismissed the writ petition, affirming that the Tribunal's order under section 66(5) was proper and in accordance with the High Court's judgment. The petition was also dismissed due to the significant delay in filing. The High Court emphasized the importance of adhering to jurisdictional limits and timely pursuit of legal remedies.