BY THE COURT:
Heard Mr. Poddar on behalf of the petitioner and Mr. Vidyarthi on behalf of the respondents.
2. Mr. Vidyarthi has taken a preliminary objection regarding maintainability of this case on the ground of limitation. We find that the grounds taken by the petitioner in his petition filed under s. 5 of the Limitation Act have not been controverted by the Revenue by filing any rejoinder to that. As such, we condone the delay in filing this case and allow the limitation petition.
3. In this case the petitioner has impugned the order of the Tribunal, Patna Bench, Patna, dt. 4th Dec., 1995, by reason of which the learned Tribunal has refused to make reference to the High Court.
4. Uncontroverted facts of the case are that in relation to accounting year 1989-
90, the AO (respondent No. 4), considering the stands taken by the parties, held that the work was executed by the petitioner-assessee himself in his individual capacity and, as such, income therefrom. was included in his assessment. Total income was determined and clubbed both the heads at the hands of the petitioner and estimated the rate of profit @ 10 per cent on the said gross receipt. This order is annexure 2 to this application. Against that order the petitioner moved the CIT(A), respondent No. 3, Ranchi, which was registered as IT Appeal No. 100/Ran/1, 1990-91. By order dt. 25th Feb., 1992,
while agreeing with the submissions of the petitioner that he was eligible for 25 per cent of the share income from the unregistered firm, held that the genuineness of the firm of Munshi Hussain was proved and thus it was not necessary to make assessment of the firm as a protective measure and substantive assessment shall be made at the hands of the firm. Respondent No. 3 further opined that there was no justification in inclusion of the income of the firm in the hands of the petitioner. This order is annexure 3 to this application.
Being aggrieved by the said appellate order, respondent No. 4 filed an appeal before the Tribunal giving rise to IT Appeal No. 398/Pat/1992. The petitioner filed his cross-objection and respondent No. 1, by order dt. 13th July, 1995, disposed of the appeal reversing the conclusion and direction of the respondent No. 3 in relation to the execution of the contract work and upheld estimation of net profit at 10 per cent in relation to contract work as found by respondent No. 4. Cross-objection filed by the petitioner was also dismissed. From the order of respondent No. 1 it appears that the Tribunal perused the entire records of the case and has come to the conclusion that respondent No. 3, the CIT(A) committed an error in coming to his conclusion. It also observed that no evidence was placed on records or before the Tribunal which could show that the firm, Munshi Hussain, was actually in existence as a real firm. The Tribunal also took into consideration the fact that the contract was executed by the petitioner-assessee himself and the same was allotted to him. Not only that even the TIDS certificate issued by the company was in the name of the petitioner-assessee and not in the name of the unregistered firm of Munshi Hussain and the petitioner could not satisfy the learned Tribunal (respondent No. 1) and so it reversed the finding of respondent No. 3 and agreed with that of respondent No. 4. The said order of the Tribunal is annexure 6.
5. Thereafter, the petitioner filed an application under s. 256(1) of the IT Act, 1961, before respondent No. 1 praying therein to refer the question of law arising out of the order dt. 13th Sept., 1995, as contained in annexure 6, to the High Court and also to draw up statements of the case, as stated above. The prayer of the petitioner was refused resulting into filing of this case before this Court.
6. Criticising the order of respondent No. 1, learned counsel for the petitioner submits that when the assessing authority as well as the Tribunal failed to consider the relevant documents produced by the petitioner in coming to the conclusion as to whether the firm was a genuine one, it was incumbent on respondent No. 1 to formulate the points of law to the effect that whenever any material on record is not considered, the question being a question of law, must be referred to the High Court. In support of his contention, drawing our attention to various paras. of the petition, Mr. Poddar submits that when the petitioner filed documents of unregistered deed of partnership, the same ought to have been considered by the authorities and that having not been done, the matter should have been referred to the High Court. In this context he has relied on a decision in the case of Nellikottu Kolleiffil Madhaid vs. Kavakkalathfl Kalikutty & Ors. 1977 (1) SC 210.
7. Mr. Vidyarthi, learned counsel for the Revenue, on the other hand, submits that the order of the AO will reveal that he was not convinced with the partnership deed inasmuch as the petitioner only filed a copy of the partnership deed and some affidavits but did not produce the partners for verification. He came to the conclusion that no intimation was given to the company for execution of the work through partnership and TDS certificate was granted in the assessee's name and not in the name of the firm. According to learned counsel, the finding of the AO that work was executed by the assessee himself in his individual capacity, found favour with the Tribunal and thus it allowed the appeal filed by the Revenue. According to him when there was concurrent findings of fact that the petitioner failed to substantiate his case that the work was done by Munshi Hussain, the firm, the same cannot be a point of law which is required to be referred to the High Court.
8. It is true that CIT(A) allowed the appeal preferred by the petitioner holding that because the said firm was treated as-URF in the asst. yr. 1989-90 and was assessed as such in the asst. yr. 1990-91, registration was allowed to the firm and thus the genuineness of the firm was proved but, in our considered opinion, the CIT(A), respondent No. 3, failed to consider the fact that TDS certificate was granted in the name of the petitioner himself and not in the name of the firm and, as such, the AO found that the work was done by the assessee himself in his individual capacity and not by the firm. This fact was also noticed by respondent No. 1 and it also found that in the asst. yr. 1991-92 the firm, Munshi Hussain was not granted registration. Grant of registration in the subsequent year to the firm does not show that there was a firm constituted and in existence in the previous year relevant to the assessment year, namely, 1989-90. Respondent No. 1 found that in absence of any evidence, there was no genuine firm in existence in the previous year relevant to the years under appeal.
9. From the aforesaid facts and circumstances it is clear that respondent No. 1 was of the view that there was no evidence on record which could even
suggest the conclusion arrived at by respondent No. 3 regarding existence of a real firm in the name and style of Munshi Hussain. Both respondent No. 4 as well as respondent No. 1 found that admittedly the contract work was executed in the name of the petitioner himself and not in the name of the firm. Moreover, TDS certificate by the company was also in the name of the assessee-petitioner.
10. Under these circumstances, in our opinion, when the Tribunal on consideration of relevant materials on record has come to a finding that there was no evidence to hold that the firm was in existence in the relevant year, no question of law arises from the order of the ' Tribunal which could have been referred to the High Court in exercise of powers under s. 256(1) of the Act.
11. In the case of CIT vs . Agra Wines : [1993]201ITR875(All) .. , Allahabad High Court, practically, in similar circumstances, has held that the question 'whether there is a genuine firm in existence or not' is essentially a question of fact. In this case also, as discussed above, the authority came to a conclusion after perusal of the documents on record that the firm was not in dstence, the said finding being question of fact, we are of the view that the impugned order cannot be interfered with.
12. The decision in the case of Nellikkottu (supra) in our opinion, is on different facts and circumstances. In that case the Supreme Court considered the power of the High Court to grant perpetual injunction in second appeal and while considering, has held that non- consideration of the - material evidence is a substantial question of law. In our view, reliance on that case on behalf of the petitioner is misplaced and does not help him.
13. In the result, we find no merit in this case and the same is, accordingly, dismissed.