1972 (10) TMI 28 - HC - Income Tax

Dispute is confined to the question whether the profits accruing on the sale of two patlas of gold were assessable to tax - Whether Commissioner is bound to give personal hearing to an assessee in disposing of provision petition under section 33A(2)

Summary

Issues:
1. Taxability of profits from the sale of gold patlas
2. Jurisdiction of the Commissioner of Income-tax under section 33A(2) of the Indian Income-tax Act, 1922
3. Opportunity of oral hearing before deciding a revision
4. Appellant's entitlement to raise new points not raised before income-tax authorities

Analysis:

1. Taxability of profits from the sale of gold patlas:
The case revolved around the assessment year 1956-57 and whether the profits from the sale of two patlas of gold were assessable to tax. The appellant, a member of a joint Hindu family, had received seven patlas of gold on partial partition. Upon selling two patlas, the Income-tax Officer taxed the surplus as the gold was considered stock-in-trade. The appellant contended that the surplus was capital gains, not revenue receipts. The Appellate Assistant Commissioner upheld the tax assessment based on a similar decision for the assessment year 1947-48. The court found no merit in the appellant's argument and dismissed the appeal.

2. Jurisdiction of the Commissioner of Income-tax under section 33A(2):
The appellant filed a revision under section 33A(2) of the Income-tax Act before the Commissioner, challenging the tax assessment. The appellant argued that the Commissioner should have provided an opportunity for an oral hearing before deciding the revision. Citing the Supreme Court's decision in Dwarka Nath v. Income-tax Officer, the appellant contended that the revisional jurisdiction was judicial in nature, necessitating a hearing. However, the court held that the Income-tax Act did not mandate an oral hearing in all cases and found no prejudice caused to the appellant due to the lack of oral hearing.

3. Opportunity of oral hearing before deciding a revision:
The court emphasized that the absence of an oral hearing did not prejudice the appellant as the facts of the case were straightforward, and the appellant had the opportunity to present his case through the memorandum of revision. The appellant's failure to mention crucial information in the revision memorandum, such as a pending reference application, precluded any grievance against the Commissioner's decision not to consider it. The court concluded that the appellant was not entitled to claim injustice due to the lack of an oral hearing.

4. Appellant's entitlement to raise new points not raised before income-tax authorities:
The appellant sought to introduce a new argument regarding the valuation of the gold patlas based on a previous court decision. However, since the appellant had not raised this point before the income-tax authorities during the assessment process, the court held that the appellant could not introduce new arguments at the appeal stage. The court dismissed the appeal, stating that the appellant was not entitled to raise new points not previously raised before the relevant authorities.

In conclusion, the High Court dismissed the appeal, upholding the tax assessment on the profits from the sale of gold patlas and rejecting the appellant's contentions regarding the jurisdiction of the Commissioner, the need for an oral hearing, and the introduction of new arguments at the appeal stage.