Sukhlal Bhanwarlal (HUF) vs Commissioner of Income Tax

Sohani, Actg. C.J.

This is an application u/s 256(2) of the income tax Act, 1961 (''the Act''). The material facts giving rise to this application, briefly, are as follows :

The applicant is assessed in the status of a HUF. The assessment of the assessee for the assessment year 1975-76 was completed u/s 143(3) of the Act and the total income was computed at Rs. 36,400. In the proceedings for the assessment of the assessee under the Wealth-tax Act, 1957 the WTO noted certain accretions to the wealth and on the basis of that information, the assessment under the Act was reopened. In reassessment proceedings, the ITO held that a sum of Rs. 30,000 was income of the assessee from undisclosed sources. Aggrieved by that order, the assessee preferred an appeal before the AAC, who dismissed the appeal. The second appeal preferred by the assessee before the Tribunal was also dismissed. An application u/s 256(1) submitted by the assessee for making a reference to this Court was rejected by the Tribunal. Hence, the applicant has filed this application.

Having heard the learned counsels for the parties, we have come to the conclusion that the following questions of law do arise out of the order passed by the Tribunal:

Whether, on the facts and in the circumstances of the case, the income tax Officer had jurisdiction to reopen the assessment u/s 147(a) of the income tax Act, 1961 ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee, being HUF could not receive gifts ?

The application is accordingly allowed. The Tribunal is directed to state the case and to refer the aforesaid questions of law to this Court for its opinion. In the circumstances of the case, parties shall bear their own costs of this application.