Porinchu Variathu v. State of Kerala — 1960 DIGILAW 26 (KER)

JUDGMENT : M.A. Ansari, J. 1. This reference has been made under section 113(1) of the Travancore Income-tax Act No. 23 of 1121. The assessee has claimed that his brother Chacko and himself were the tenants-in-common of some agricultural lands standing in the name of the assessee, but the plea has not been accepted by the lower tribunals. During the previous assessments under Act No. 23 of 1121, the assessee has been assessed as if he alone were entitled to the income. But on June 28, 1949 the then Government issued a notification, ROC. 293 of 1949, providing that where the property be held by persons as tenants-in-common the assessment should be at the rate applicable to the share of the agricultural income due to each tenant-in-common. Thereafter the assessee has claimed that he should be assessed on his shares of the income from the properties, standing in his name, because his brother and himself were their tenants-in-common. He has produced documents before the Assistant Commissioner of Agricultural Income-tax and Sales-Tax, Moovattupuzha, but the aforesaid assessing authority has repelled the contention and held that the notification relied upon was not applicable. 2. An appeal was filed before the Deputy Commissioner of Agricultural Income-tax and Sales-tax and an affidavit of August 29, 1951 was also filed in support of the plea of the properties standing in the name of the assessee being held by him as tenants-in-common with his brother. The Deputy Commissioner has, however, confirmed the assessment order, and in his order made no reference either to the affidavit filed before him by the assessee, or the documents produced before the lower assessing authority. 3. Against this an appeal was filed before the Tribunal and the assessee again filed an affidavit of November 26, 1951, reiterating what had been stated in his affidavit to the Deputy Commissioner. The Tribunal has dismissed the appeal and the part of its order concerning the evidence reads as follows: "There was no evidence that the properties in the name of each of the brothers were held by them as tenants-in-common.” 4. An application was filed under section 113(1) of the Act and the Tribunal had referred three questions to the High Court. The first covered the objection by the assessee about assessments under the Travancore Income-tax Act being invalid in view of the Indian Finance Act of 1950. An application was filed under section 113(1) of the Act and the Tribunal had referred three questions to the High Court. The first covered the objection by the assessee about assessments under the Travancore Income-tax Act being invalid in view of the Indian Finance Act of 1950. We need not deal in detail with it, for the question has been already answered against the assessee by the Travancore-Cochin High Court. The other two questions then referred by the Tribunal were as follows: "(1) Whether the assessee has discharged the burden with regard to proving that himself and his brother are holding the properties in their separate and their joint names as tenants-in-common. (2) Whether the Government Notification ROC. No. 293 of 1949, dated 28th June 1949 is not applicable in the case of the assessee." 5. The Travancore-Cochin High Court, while answering the first question against the assessee had found the second question not to be properly framed. In this connection the learned Judges had observed that the answer to the third question depends upon that of the second and as regards the latter there was no statement by the Tribunal and no mention of the affidavits by the assessee. They having found the statement not to be sufficient to enable the court to answer the question, directed the Tribunal under section 113 (4) of Act No. 23 of 1121 to submit fresh and sufficient statement of the case so as to enable the second and the third questions being answered; the Tribunal was further directed to frame the questions in proper manner. Such a fresh statement of facts has since been submitted, wherein the first of the remaining two questions has been reframed. The questions now read as follows: (1) Whether there is no evidence on record to show that the assessee is tenant-in-common with his brother Chacko in respect of the properties standing in their separate and joint names? (2) Whether the Government Notification ROC. of 1949, dated 28th June 1949 is not applicable in the case of the assessee ? 6. As the statement now admits evidence having been furnished by the assessee in support of the claim under the notification, the first question can but be answered that there are such evidence. (2) Whether the Government Notification ROC. of 1949, dated 28th June 1949 is not applicable in the case of the assessee ? 6. As the statement now admits evidence having been furnished by the assessee in support of the claim under the notification, the first question can but be answered that there are such evidence. Moreover there is the further admission in the statement about the assessee having furnished affidavits before the Deputy Commissioner as well as before the Tribunal and it cannot be disputed that they are evidence. Our answer to the first question, therefore, is that there are evidence on record to show that the assessee and his brother were tenants-in-common in respect of the properties standing in their separate enjoyment. 7. Answering the first question, however, could not be of much assistance unless the last question be also answered in the assessee's favour, and in this connection, his counsel has urged that affidavits must not be capriciously rejected. He has further urged that his client has proved his claim to the benefit, and the answer to the last question should also be in his favour. In support of the first part of the argument he has relied L. Sohan Lal Gupta v. Commissioner of Income-tax (1958)33 I.P.R. 786 wherein Mehta Parik and Co. v. Commissioner of Income-tax (1956) 30 I.T.R. 181 was relied in support of the view that the assessee's affidavit should not be rejected without his being cross-examined. The learned Government Pleader has argued that being the sole tenant of the properties in the name of the assessee is a question of fact and such decisions of the taxing authorities cannot be reviewed by this Court in exercise of its advisory jurisdiction, merely because they are credible evidence to justify the contrary conclusion. We do not think decisions of facts by Taxing Authorities under this Act, as under the Indian Income-tax Act, are always immune from the scrutiny of the High Courts, assuming the decision in the case before us to be such. If the decision be what no reasonable man can arrive at, or if it be due to misdirection on a point of order the binding nature of the decision ceases. If the decision be what no reasonable man can arrive at, or if it be due to misdirection on a point of order the binding nature of the decision ceases. In this connection we would cite the following observations of Viscount Simonds in Edwards (Inspector of Taxes) v. Eairstou (1955) 28 I.P.R. 579 at 586: "For it is universally conceded that though it is a pure finding of fact, it may be set aside on grounds which have been stated in various ways but are, I think fairly summarised by saying that the court should take that course if it appears that the commissioners have acted without any evidence or upon a view of the facts which could not reasonably be entertained." 8. In the same case Lord Radcliffe also expressed himself in these words: "If the case contains anything ex facie which is bad law and which bears upon the determination, it is obviously, erroneous in point of law. But without any such misconception appearing ex facie, 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, too, the court must intervene." 9. In Mehta Parish & Co. v. Commissioner of Income-tax (1956) 30 I.T.R. 181 , Bhagawati, J., after referring to the aforesaid passages states the legal position in these words: "The Court would be entitled to intervene if it appears that the fact finding authority has acted without any evidence or upon a view of the facts, which could not reasonably be entertained, or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question.” 10. We think the decision, which the learned Government Pleader urges us to uphold, is vitiated by several defects out of those enumerated in Mehta Parikh’s case (1956) 30 I.T.R. 181 . It cannot be disputed that one of the tests for ascertaining whether a person alone owns the property is to find whether he alone had furnished the money with which the property has been acquired. This is but the inevitable consequence of the rule that benefits of the purchases should go to those, who have advanced the purchase money unless the intention to gift be clear. This is but the inevitable consequence of the rule that benefits of the purchases should go to those, who have advanced the purchase money unless the intention to gift be clear. There is no indication that the taxing authorities in the case had ever applied their minds to this aspect, when dealing with the evidence about the purchase money. It follows that their decisions on the claim of the assessee have become vitiated. Indeed while rejecting it the evidence about the price of the properties coming from funds jointly owned by the two brothers and the affidavits have not been considered. We therefore think that there is not only error of law bearing upon the decision, but that the conclusions are such as cannot be judicially and reasonably arrived at. In these circumstances we would answer the second question by holding that the notification is applicable to the assessee. The result is that the aforesaid answers are in favour of the assessee, which answers be sent to the Department concerned. We do not think the assessee is entitled to any costs.