The Commissioner of Income-tax, Lucknow Vs. M/S. Abdul Qadir, Mohd. Sagir, Pilibhit. - Court Judgment

Excerpt:
- all india services act, 1951.sections 8 & 11 & a.p. buildings (lease, rent and eviction) control rules, 1961, rule 5: [v.v.s. rao, g. yethirajulu & g. bhavani prasad, jj] refusal by landlord to receive rent - deposit of rent in court - held, a tenant has the option to take recourse to section 8 in case of refusal or evasion by landlord to receive rent and if landlord were to not name a bank or refuse even the money order of rent, the tenant can deposit the rent in accordance with sub-rules (1) to (3) of rule 5. the notice to person entitled to rent and proper maintenance of accounts of such deposits under sub-rules (4) and (5) of rule 5 are solely dependent on compliance with sub-rule (3) by the tenant. the payment or deposit of rent under section 11 read with sub-rule (6) of rule 5 arises only in respect of a tenant who did not take recourse to section 8 or section 9 before an application for eviction has been made against him in respect of any rent in arrears by date of that application, whereas in respect of rent that becomes subsequently due since date of application for eviction, the tenant is bound to pay or deposit regularly until termination of proceedings in order to enable him to contest the application. any violation of section 11(1) to (3) and sub-rule (6) of rule 5 makes the tenant liable for the adverse consequences under sub-section (4) of section 11. thus, the provisions of section 11 and sub-rule (6) of rule 5 are intended only to ensure the payment and deposit of rent including arrears during pendency and till termination of proceedings for eviction. the forfeiture of right of tenant to contest in case of default is to protect the rights and interests of landlord pending such an application for eviction, but not to confer any right on tenant to plead that all defaults committed by him prior to application for eviction can never be considered wilful, if he were to deposit all arrears of rent due within fifteen days under rule 5(6) read with sub-section (1) of section 11. the object and effect of section 11 and sub-rules (1) to (5) to rule 5, the former being for protection of landlord during pendency of eviction proceedings and the later being for protection of tenant to avoid any liability for eviction on ground of wilful default. consequently, while taking recourse to section 8 by tenant is optional, once that option is exercised, compliance with sub-rules (1) to (5) of rule 5 becomes mandatory in the sense that any non-compliance with prescribed procedure will positively indicate the wilful nature of default committed in paying or tendering rent as prescribed. while deposit of rent in terms of provisions of act and the rules amounts to valid tender of rent to landlord, the failure to comply with rule 5 (3) requiring delivery of a copy of the challan for deposit of rent in office of controller or appellate authority, as the case may be, so as to enable controller or appellate authority to cause maintenance of proper accounts under sub-rule (5) and give notice of deposit to person amounts to wilful default in making valid payment or lawful tender of the rent by the tenant to the landlord. thus, where a tenant obtains an order to deposit rent, same shall be deposited at least by the last day of the month following that for which rent is payable and rent challan shall be delivered in the office of controller within a reasonable time so that rent controller can take necessary action for service of notice of deposit under sub-rule (4) of rule 5 of the rules within seven days of such delivery. in the absence of compliance in so depositing rent and delivering challan in the office of controller, tenant shall be deemed to have committed wilful default. - it is well settled that the answer to a question in advisory jurisdiction has to be given on facts and circumstances found by the tribunal and not as it may be found by the high court.r. m. sahai, j. - under section 256(2) of the income-tax act, the income-tax appellate tribunal delhi, bench c has submitted this statement of the case with the following question of law for the opinion of this court :-'whether on the facts and in the circumstances of the case the tribunal was legally correct in deleting the penalty levied under section 271(1)(c) of the income-tax act, 1961 ?'2. the assessment year in question is 1965-66. the assessee, a registered firm, undertook forest contracts in the year in dispute. if filed a return showing loss of rs. 25,997/-. the i.t.o. determined the total income at rs. 53,875/-. the appellate asstt. commissioner of income tax reduced the total income by rs. 1,500/-. the main addition sustained was on account of estimate of profit from contract business at rs. 53,125/-. the tribunal, however, further reduced the total income by rs. 18,125/-. in the meantime the case was referred to the inspecting assistant commissioner of income tax for levy of penalty. a sum of rs. 7,000/- was levied at penalty by reference to the difference between the income returned and the income as determined after giving effect to the order of the appellate assistant commissioner. the assessees appeal was allowed regarding the penalty matter by the tribunal and it recorded the following findings :-'the addition has been made by estimating the trading results by reference to certain defects in the accounts. the defects were not such as could be attributed to gross or wilful neglect or fraud. moreover, the addition was essentially an estimate subject to the usual margin of error.'counsel for the department has urged that this finding recorded by the tribunal was incorrect and was based on a wrong approach of law as the explanation to section 271(1)(c) provides that the burden to establish that there was no fraud or wilful neglect was on the assessee. he has further argued that the finding is based on no material. so far the question whether there was any material for the finding recorded by the tribunal is concerned, it may be pointed out that no such question has been referred to us. it is well settled that the answer to a question in advisory jurisdiction has to be given on facts and circumstances found by the tribunal and not as it may be found by the high court. we are precluded from appreciating the facts ourselves.3. mr. a. n. mahajan appearing for the assessee has brought to our notice two decisions reported in additional comm. of income-tax, lucknow vs. m/s. horilal kunj behari lal, hardoi (1975 u.p.t.c. 364 : 1975 c.t.r. (all.) 197 and commissioner of income tax, u.p. vs. harnam singh and co. sharanpur (1972 u.p.t.c. 669). we agree with the principle laid down in these two decisions.4. in view of what we have stated above we answer he question in the affirmative in favour of the assessee and against the department. the assessee is entitled to costs which we assess at rs. 200/-.