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TMI Blog1959 (11) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... hettiar was congenital blind. He executed a releases deed in favour of the assessee in the year 1935, admitting his disqualification. The family owned (1) properties, (2) a money lending business at Karaikudi, with a branch in Penang, the vilasam being M.R.M.M., (3) a share in a partnership firm at Talukanson and (4) certain shares in companies. Besides his interest in the family properties, the assessee owned, in his own individual right, (1) a business in stocks and shares, (2) an interest as a partner in a Handle shop M.R.M.S., which had its head office at Karaikudi and a branch at Penang, and (3) some shares in certain companies. The assessee had been assessed to income- tax in two capacities: (1) as the karta of a Hindu undivided family with respect to the income from family properties and (2) as an individual in respect of the income from his separate property. Ramaswami Chetiar died on March 12, 1948. For the assessment year 1948-49 (the account year being April 13, 1947, to April 12, 1948), the assessee submitted two returns, one on behalf of the family and the other for himself. He, however, claimed that after March 12, 1948, he should be assessed only as an individual on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the year of account, and was therefore liable to be included in the assessment for that year. The assessee filed an appeal to the Appellate Assistant Commissioner. In that appeal he took up, curiously enough, a position contrary to what he did before the Income-tax Officer, namely, a plea that the assessment should have been made separately on the two capacities he possessed during the year of account, and that the assessment of income made on him in his individual capacity could not include the receipt of the foreign profits by the family. But the more substantial objection in the appeal was the question whether there was a constructive remittance of foreign profits during the year of account. The Appellate Assistant Commissioner rejected the first contention in regard to the legality of the inclusion of the income of the family in the assessment of the individual. But he held that the remittances of foreign profits should be held to have been made only during 1941-42, corresponding to the assessment year 1942-43, when the moneys were actually remitted and not when they were written off in the account books of the family business at Penang, and he, therefore, deleted the sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal, the Department took the order of the Tribunal as one authorising the recommencement of the assessment proceedings and, accordingly, the Income-tax Officer, by his letter dated 20th August, 1955, requested the assessee to inform him as to whether the return already filed could be taken as relating to the family, and that, if that were not so, requiring him to file a return of the income of the family to enable the Income-tax Officer to carry out the directions contained in the Tribunal's order. Shortly thereafter, the Officer issued also a notice under section 34 of the Indian Income-tax Act. The notice was dated September 23, 1955. The assessee, feeling aggrieved by the initiation of proceedings under section 34, filed a petition under article 226, W.P.No. 950 of 1955, in this court, for calling for records relating to the notice aforesaid, and quashing the same. Various objections were taken by the Department to the maintainability of the writ petition. This court, by its order dated March 21, 1957, dismissing the petition, observed: It is common ground that the assessment, the validity of which was challenged was only what the Department called 'protective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to give directions for the initiation of fresh proceedings that would enable the Department to commence proceedings under section 34 against such party and render futile the plea of limitation available to him. The learned counsel referred us to the second proviso to section 34(3) by which the period of limitation laid down under sub-sections (1) and (3) would not apply, if it were to give effect to any finding or direction contained in an order in appeal, reference or revision. It was argued that, if the Department were to initiate proceedings under section 34 for the first time against the family in 1955, it would be barred by limitation. The finding of the Tribunal, that it was the joint family that received the foreign remittance, though given in proceedings in which the family was not represented, would attract the proviso to section 34(3), and prejudice the family be depriving it of the plea of limitation. For that reason alone, it was contended that the Tribunal would have no jurisdiction to direct a fresh assessment. It was further contended that the second proviso to section 34(3) was ultra vires, and the Tribunal would have no jurisdiction to give a finding, so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l under this rule: Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground. Rule 27: The respondent, though he may not have appealed, may support the order of the Appellate Assistant Commissioner on any of the grounds decided against him. Section 33(4) of the Act states: The Appellate Tribunal may, after giving both parties to the appeal on opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner. Rule 12 prescribes that an appellant shall not urge any ground in support of the appeal but that it would be open to the Tribunal to decide on a ground not so taken, provided the party who might be affected had sufficient opportunity of being heard on that ground. Rule 27, which enables a respondent to support the order of the Appellate Assistant commissioner on a ground decided against him by that authority by showing that it was wrong, would, obviously, cover a case where the grounds would not be in the memorandum of appeal. The learned advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swering that the Tribunal would have no such power. The provisions of section 33(4) and rule 12, which contemplate an opportunity being given to both side for being heard, imply that there should have been a dispute on that question. Rule 27 recognizes the principle that the Appellate Tribunal would have authority only to decide the question decided by the Appellate Assistant commissioner against the appellant, and makes a special provision, enabling the respondent alone to support the order on a ground decided against him. Section 33(1) and (2) give a right of appeal only on matters on which there could be an objection to the orders of the Appellate Assistant Commissioner by the assessee, or the Commissioner, and not on a matter which could not properly form the subject of an objection. The question in the instant case, as to whether the assessee was to be separately assessed in his two capacities, did not arise before the Tribunal on the appeal, and it was not competent for it to adjudicate on it; nor would it have a power to give a finding that the income was received by the family. We are of opinion that that question of separate assessment for the family and the individual did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t done, as it did not consider the only question raised in the appeal. There is yet another objection to the order of the Tribunal. The Appellate Tribunal, after setting aside the assessment, and directing a fresh assessment, has concluded its order with the words the appeal is dismissed. It is difficult to follow how the appeal could be held to be dismissed, while, in substance, it was allowed, by setting aside the assessment. In the statement of the case, the Tribunal sought to explain the inconsistency between its order of remand and ultimate dismissal of the appeal thus: It is hereby submitted and with respect that this narration is only a direction for purposes of the Tribunal's own statistics and which cannot by any means affect the right or liabilities of the parties before the Tribunal which are only governed by the directions in the body of the order. We fail to understand as to how any statistics maintained by the Tribunal could require that an appeal, which was virtually allowed, should be treated as one dismissed. We have come across cases in execution proceedings governed by the Civil Procedure Code, where it has been held that the use of the words ..... X X X X Extracts X X X X X X X X Extracts X X X X
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