SUPREME COURT OF INDIA
Commissioner
of Income-tax
v.
DIVYA
INVESTMENT (P.) LTD.
S.H.
Kapadia and B. Sudershan Reddy, JJ.
Civil
Appeal No. 5931 of 2007
December 13, 2007
Section 260A, read with section 22, of the Income-tax Act, 1961 – High Court – Appeals to – Assessment years 1992-93 to 1999-2000 – Assessee took a land on lease and constructed a multi-storeyed building on that and let out to a bank and others – Assessee had received hiring charges and maintenance charges from lessees and claimed same as business income for assessment year 1997-98 – Assessing Officer held same as income from house property – Assessment order was confirmed by Commissioner (Appeals) and cases for earlier assessment years from 1993 to 1999-2000 were ordered to be reopened by issuance of notice under section 148 – On appeal Tribunal held that hire charges received by assessee as business income – For said above notices issued under section 148 for reopening assessments, assessee filed writ petition before High Court where it was held that income should be treated as business income – Whether since Tribunal had taken the view that income was from business for assessment year 1997-98, it was not open to High Court to direct by an omnibus order that all subsequent years were connected year and that income be treated only as business income – Held, yes – Whether parties should have been relegated to move High Court by filing appeal under section 260A and it was not open to High Court to entertain writ petitions – Held, yes – Whether, therefore, writ petitions were totally misconceived and not maintainable in law – Held, yes
The respondent-assessee took on lease a land with existing structure. It demolished the structure and constructed a multi-storeyed building which was let out to a bank and others. The assessee received hiring charges and maintenance charges from the lessees. Thereafter, the assessee filed its returns for the assessment year 1997-98. The Assessing Officer held that it was an income from house property and not from business as claimed by the assessee in its returns. The assessment order was confirmed by the Commissioner (Appeals) and cases for earlier assessment years from 1992-93-1999-2000 were ordered to be reopened by issuance of notice under section 148. On appeal the Tribunal held that hire charges received by the assessee were liable to be assessed as business income and not as income from property. Against the above notices under section 148 reopening the assessments, the assessee, however, filed writ petition. The assessee had also filed separate writ petition for each of the assessment year in which reopening was ordered. By the impugned judgment, the High Court had held in all the writ petitions that the income should be treated as business income.
On appeal to the Supreme Court:
The writ petitions were totally misconceived and not maintainable in law. The Tribunal had taken the view that income was from business for the assessment year 1997-98. It was not open to the High Court to direct by an omnibus order that all subsequent years are connected years and that income be treated only as business income. [Para 4]
The parties should have been relegated to move the High Court by filing an appeal under section 260A. It was not open to the High Court to entertain the writ petitions. Further, it was not clear as to whether the respondent-assessee had filed revised returns pursuant to the notices under section 148. [Para 5]
In the instant case,
there were two separate proceedings involved, viz., order of the Commissioner
(Appeals) plus proceedings under section 148. Unfortunately, all proceedings
were clubbed in the writ petitions. Similarly if the decision of the
Commissioner (Appeals) was sought to be challenged for a given year, then, the
assessee ought to have filed appeals before the Tribunal. [Para 6]
Subject to above, instant civil appeal was to be disposed of. [Para 7]