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TMI Blog2008 (6) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... att for the respondent. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- This petition is filed by one Shri Kanchanlal Maganlal Kapadia and 14 others challenging the action of the respondent in issuing notice under section 148 of the Income-tax Act, 1961 ("the Act"), in the name and style of Shri Kanchanlal Maganlal Kapadia and 14 others members (AOP) for assessment year 1986-1987. 2. The facts which are not in dispute are that all the 15 persons jointly purchased lottery tickets, each having an equal share therein i.e. 1/15th each. Out of many tickets so purchased by the 15 individuals, one lottery ticket turned out to be a winning ticket bearing No. JM 2606390 for a sum of Rs.25,00,000. In the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guardian of minor co-sharers. A copy of the agreement is enclosed herewith. (ii) The prize tickets was discharged by all the co-shares for submitting to the Government of Maharashtra for claiming prize amount. Photo copy of the discharged ticket is enclosed herewith. (iii) The receipt from the Finance Department, Bombay, acknowledging the receipt of the prize ticket states that it has been received from Kanchanlal M. Kapadia and others. (iv) The prize amount was deposited in Savings Account No.K-2348 with State Bank of India on 17th February, 1986, from where it was disbursed to all the co-sharers equally on February 18, 1988." 4. The assessee- individual also placed reliance on the apex court decision in the case of G. Muruges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n issued beyond a period of four years from the end of the relevant assessment year and, hence, unless and until the Revenue is in a position to show that there was any failure on part of the assessee to make a return, or that there was any failure on part of the assessee to respond to a notice under section 142(1) or section 148 of the Act or disclose fully or truly all material facts necessary for the assessment, the impugned notice be struck down as being without jurisdiction. Referring to the aforesaid facts recorded hereinbefore it was submitted that all the 15 individuals had duly shown 1/15th share each and as could be seen from the case of individual. Shri Kanchanlal Maganlal, after thorough inquiry and application of mind, the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income as an association of persons and mere filing of returns by 15 individuals would not absolve the petitioner- association of persons. 9. The proviso under section 147 of the Act envisages three different contingencies, upon fulfillment of any one or more of them, an Assessing Officer would derive jurisdiction to initiate reassessment proceedings beyond a period of four years from the end of the relevant assessment year. Either there has to be a failure on part of the assessee to file a return of income under section 139 of the Act, or there has to be a failure to respond to a notice under section 142(1) / 148 of the Act, or to disclose fully or truly all material facts necessary for the assessment of the assessment year in q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e day when the prize was declared on the draw of lottery; and whether there was any obligation on such an entity to file a return of income. The factum of Shri Kanchanlal Maganlal Kapadia and 14 other persons having entered into an agreement dated 07.11.1985 was already available on record. It is also available on record that the said 15 individuals had collectively purchased number of tickets of Maharashtra State Lottery, out of which one turned out to be a prize winning ticket. All 15 persons have discharged the said lottery ticket by appending their signatures on the reverse side of the lottery ticket. The receipt issued by the authority of Maharashtra State Lottery categorically indicates that the claim of prize winning ticket was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that they acted as an 'association of persons'. 13. Applying the aforesaid ratio to the facts available on record it becomes apparent that for the purposes of purchasing a lottery ticket and collecting the winning prize, in the event of being successful, the act does not involve any management which would permit drawing of an inference that two or more lottery ticket holders functioneo as an association of persons. The apex court was concerned with a fact situation where dividends were received by joint shareholders. 14. In the circumstances, it is not possible to accept the stand of the respondent-authority that there was any obligation on an entity by the name of Shri Kanchanlal Maganlal Kapadia and 14 others members (AOP) to te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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