Delhi High Court

Chaman Lal vs Commissioner Of Income Tax on 3 July, 2000

Equivalent citations: 2000 112 TAXMAN 291 Delhi

Author: Pasayat

JUDGMENT

Pasayat, C.J.

This is an appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). For the assessment year 1980-81, certain additions were made by the assessing officer for unexplained cash found during search in the petitioner's premises and unexplained expenditure the matter was taken in appeal before the Commissioner (Appeals). Relief was granted on several heads by the said authority. Matter was carried by the revenue before the Tribunal, Delhi. Cross-objections were also filed by the assessee-petitioner.

2. The Tribunal upheld the findings recorded by the Commissioner (Appeals), so far as the relief granted for a sum of Rs. 56,000 in respect of cash found at the time of search is concerned. So far as his claim regarding loans from seven parties is concerned, the Tribunal found that positive materials were not produced before the Commissioner (Appeals) and, therefore, it was not possible on its part to record any definite finding. Therefore, the matter was remitted to the Commissioner (Appeals) to examine the assessee's claim for the availability of funds to the extent of Rs. 82,500 claimed to be on account of loans. The Commissioner (Appeals) was directed to take a fresh decision and pass a speaking order. So far as the assessee's cross-objection is concerned, the Tribunal found that its first plea relating to non-service of notice under section 148 was untenable in view of materials on record. As regards additions for investment in house property and investment in fixed deposits are concerned, the assessee's stand was that for an earlier year it was accepted. The Tribunal held that the plea to be not tenable as there was no nexus between additions made in the earlier years and the investment made in the subsequent years.

3. The learned counsel appearing for the appellant submitted that instead of setting aside the order of the Commissioner (Appeals), the Tribunal itself should have examined the matter and should have held that the burden of proving the loan was discharged by the assessee. Similarly, it was submitted that the Tribunal was not justified in taking a different view from that taken for the assessment years 1972-73 to 1979-80 by order dated 22-8-1995. It was also submitted that conclusions regarding service of notice under section 148 are not factually correct.

4. Section 260A(1) of the Act reads as follows:

"An appeal shall be to the High Court from every order passed in appeal by the Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law.'

The issues raised by the assessee in the appeal cannot be said to be involving any question of law, much less a substantial question of law.

5. A question of fact becomes a question of law if the finding is either without any evidence or material, or if the finding is contrary to the evidence, or is perverse or there is no direct nexus between conclusion of fact and the primary fact upon which that conclusion is based. But it is not possible to turn a mere question of fact into a question of law by asking whether, as a matter of law, the authority came to a correct conclusion upon a matter of fact.

6. In Edward v. Bairstow (1955) 28 ITR 579 (HL), Lord Simonds observed that even a pure finding of fact may be set aside by the court if it appears that the Commissioner has acted without any evidence or on a view of the facts which could not be reasonably entertained'. Lord Radcliffe stated that no misconception may appear on the face of the case but it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, the court may intervene.

7. The words 'substantial question of law' have not been defined. But the expression has acquired a definite connotation through a catena of judicial pronouncements. Usually five tests are used to determine whether a substantial question of law is involved. They are as follows:

(i) whether directly or indirectly it affects substantial rights of the parties, or

(ii) the question is of general public importance, or

(iii) whether it is an open question in the sense that the issue has not been settled by pronouncement of the Supreme Court or Privy Council or by the Federal Court, or

(iv) the issue is not free from difficulty, and

(v) it calls for a discussion for alternative view.

8. So far as the issues in the case at hand are concerned, essentially they are questions of fact and the Tribunal has with reference to material facts recorded positive findings of fact, giving rise to no question of law. The appeal is dismissed.