Issues:
- Whether the suit is hit by the provisions of Order 23, CPC due to withdrawal of an earlier suitRs.

Analysis:
1. The case involved a revision petition by the sixth additional defendant in a suit filed by the respondents seeking various reliefs related to property rights and injunctions. The defendants argued that the suit was not maintainable as the plaintiff had withdrawn an earlier suit without specific permission to file a fresh suit on the same subject matter.

2. The main issue framed was whether the current suit was affected by the withdrawal of the earlier suit under Order 23 of the Civil Procedure Code. The trial court ruled against the petitioner, leading to the revision.

3. The plaintiffs in both suits did not claim independent rights over the property but acknowledged it belonged to a trust of which the first plaintiff was a trustee.

4. The earlier suit, filed by the first plaintiff as a trustee, sought similar reliefs regarding property management and injunctions. The court noted that the subject matter and parties in both suits were virtually the same, despite attempts to make the present suit appear different.

5. The court analyzed Order 23, Rule 1, Sub-rule (4) of the CPC, emphasizing that a litigant must obtain court permission to file a fresh suit on the same cause of action to prevent abuse of the legal process. The court clarified that the cause of action, not just the property, determines if a suit is barred under this rule.

6. The court referred to a Supreme Court decision to explain the concept of "subject matter of the suit" and concluded that the present suit was based on the same cause of action as the earlier suit, despite attempts to create differences in the pleadings.

7. Despite a different decision cited by the respondents, the court found that the causes of action in the two suits were essentially the same, leading to the conclusion that the present suit was not distinct from the earlier suit.

8. The respondents argued about a subsequent agreement affecting the trustee's rights, but the court noted that the core issue remained the same - seeking an injunction against interference with the trustee's management rights. As the plaintiffs withdrew the earlier suit without liberty to file a fresh suit, the present suit was held to be barred under Order 23, Rule 1, Sub-rule (4) of the CPC.

In conclusion, the court allowed the revision petition, dismissed the suit, and awarded costs to the petitioner.

Issues Involved:
1. Constitutional validity of sub-clause (vd) of clause (a) of sub-section (2) of section 5 of the Bengal Finance (Sales Tax) Act, 1941.
2. Alleged unreasonable restriction on trade and commerce.
3. Alleged violation of articles 14, 19(1)(g), 245, 254, 265, 276, 286, and 301 of the Constitution.
4. Requirement of furnishing a declaration in form XXIVC.
5. Alleged discriminatory legislation.
6. Alleged conflict with section 15 of the Central Sales Tax Act, 1956.
7. Alleged arbitrary and confiscatory nature of the requirement.
8. Alleged imposition of multi-point taxation.

Issue-wise Detailed Analysis:

1. Constitutional Validity of Sub-clause (vd):
The applicants challenged the constitutional validity of sub-clause (vd) of section 5(2)(a) of the BFST Act, claiming it imposed unreasonable restrictions on trade in iron and steel. They argued that the State Legislature lacked the power to enact such a provision and that it violated articles 14 and 19(1)(g) of the Constitution by imposing additional obligations on subsequent selling dealers to furnish a declaration in form XXIVC.

2. Alleged Unreasonable Restriction on Trade and Commerce:
The applicants contended that the amendment, which shifted the point of taxation to the first point of sale, imposed an unreasonable restriction on trade. They argued that the mandatory requirement to furnish a declaration form impeded the free flow of trade and commerce in iron and steel, thus violating articles 301 and 304(b) of the Constitution.

3. Alleged Violation of Constitutional Articles:
The applicants argued that sub-clause (vd) violated multiple constitutional provisions, including articles 14, 19(1)(g), 245, 254, 265, 276, 286, and 301. They claimed the provision was discriminatory, arbitrary, and imposed an unreasonable restriction on their right to trade.

4. Requirement of Furnishing a Declaration in Form XXIVC:
The applicants argued that the mandatory requirement to furnish a declaration in form XXIVC was unreasonable. They contended that this requirement was peculiar to dealers in iron and steel and not applicable to dealers in other goods, making it discriminatory. They also argued that the provision could lead to multi-point taxation if the declaration was not furnished.

5. Alleged Discriminatory Legislation:
The applicants claimed that the provision was discriminatory as it treated dealers in iron and steel differently from dealers in other goods. They argued that this discrimination was evident as manufacturing dealers continued to enjoy a concessional rate of tax, while other dealers did not.

6. Alleged Conflict with Section 15 of the CST Act, 1956:
The applicants argued that sub-clause (vd) conflicted with section 15 of the CST Act, 1956, which restricts the levy of tax on declared goods to a single point. They contended that the mandatory requirement of the declaration could lead to multi-point taxation, thus violating section 15 of the CST Act.

7. Alleged Arbitrary and Confiscatory Nature of the Requirement:
The applicants argued that the requirement to furnish a declaration was arbitrary and confiscatory. They contended that the provision imposed an unreasonable burden on subsequent selling dealers, who had no control over the first selling dealers to obtain the required declaration.

8. Alleged Imposition of Multi-point Taxation:
The applicants contended that the mandatory requirement of the declaration could lead to multi-point taxation, as subsequent selling dealers would be liable to pay tax if they failed to furnish the declaration. They argued that this contravened section 15(a) of the CST Act and article 286(3) of the Constitution.

Judgment Analysis:

Constitutional Validity and Discrimination:
The Tribunal held that sub-clause (vd) was enacted under entry 54 of List II of the Seventh Schedule to the Constitution, read with articles 245 and 246. The Tribunal accepted the State's contention that sub-clause (vd) aimed to prevent tax evasion and ensure compliance with section 15(a) of the CST Act. The Tribunal found no inconsistency between sub-clauses (va) and (vd) and held that they served distinct purposes, thus rejecting the claim of discrimination.

Unreasonable Restriction on Trade:
The Tribunal acknowledged that the provision aimed to change the point of taxation to the first point of sale and found that the requirement to furnish a declaration form was a convenient mode of proof. However, it held that the mandatory nature of the requirement imposed an unreasonable restriction on trade and commerce, potentially leading to multi-point taxation.

Violation of Constitutional Articles:
The Tribunal found that the mandatory requirement of the declaration form could lead to multi-point taxation, violating section 15(a) of the CST Act and article 286(3) of the Constitution. It also held that the provision was unfair and unreasonable, thus violating article 14.

Requirement of Furnishing a Declaration:
The Tribunal held that the mandatory requirement to furnish a declaration form was unreasonable and could lead to multi-point taxation. It interpreted the provision to mean that the requirement was directory, not mandatory, allowing dealers to prove their case with other evidence.

Discriminatory Legislation:
The Tribunal rejected the claim of discrimination, holding that the provision had a reasonable nexus to the object sought to be achieved. It found that registered dealers in iron and steel constituted a different class and that the provision aimed to prevent tax evasion.

Conflict with Section 15 of the CST Act:
The Tribunal held that the mandatory requirement of the declaration form could lead to multi-point taxation, thus violating section 15(a) of the CST Act. It found that the provision imposed an unreasonable burden on subsequent selling dealers.

Arbitrary and Confiscatory Requirement:
The Tribunal held that the mandatory requirement of the declaration form was arbitrary and imposed an unreasonable burden on subsequent selling dealers. It found that the provision was unfair and unreasonable, thus violating article 14.

Imposition of Multi-point Taxation:
The Tribunal held that the mandatory requirement of the declaration form could lead to multi-point taxation, violating section 15(a) of the CST Act and article 286(3) of the Constitution. It found that the provision imposed an unreasonable restriction on trade and commerce.

Conclusion:
The Tribunal held that sub-clause (vd) of section 5(2)(a) of the BFST Act was valid and constitutional when interpreted to mean that the requirement to furnish a declaration form was directory, not mandatory. It directed that dealers could prove their case with other evidence and that the Commercial Tax Officer should be satisfied with such evidence. The writ petitions were partly allowed, with no order for costs.

Issues Involved:
1. Whether the oral order pronounced by the Bench on 19-4-1988 allowing the appeal with the remark "Order to follow" amounts to an "Order" passed by the Appellate Tribunal within the meaning of sub-section (1) of Section 35-C of the Central Excises and Salt Act, 1944.

Detailed Analysis:

1. Background and Preliminary Objection:
The appellants, dissatisfied with an order of recovery of Rs. 1,13,802.62, filed an appeal before the Tribunal. The appeal was heard on 19-4-1988, and the Bench orally pronounced the order allowing the appeal with the remark "Order to follow." Due to the illness of a member and the transfer of another, the reasoned order was not written. The case was reopened for rehearing, leading to a preliminary objection by the appellants that the oral order constituted a final order.

2. Definition and Legal Interpretation of "Order":
The Central Excises and Salt Act, 1944, does not define "Order" in Section 35-C. The Tribunal referred to definitions in the Code of Civil Procedure and legal dictionaries, concluding that an "Order" involves a formal expression of a decision. The Tribunal emphasized that an order must be reasoned and written, as required by Rule 26 of the CEGAT (Procedure) Rules, 1982.

3. Requirement of a Reasoned Order:
The Tribunal highlighted that the Act's scheme and provisions necessitate a reasoned order. Section 35-C mandates that the Tribunal pass orders after giving parties an opportunity to be heard. The finality of the Tribunal's orders, subject to appeal or reference, implies that orders must be reasoned to ensure transparency and fairness.

4. Judicial Precedents:
The Tribunal cited several judicial precedents to support the necessity of a reasoned order:
- Tarapore & Co. v. Tractors Exports: Final orders must dispose of the rights of parties.
- Venkata Reddy v. Pethi Reddy: A final decision must be unalterable except by appeal or revision.
- Govindrao v. State of Madhya Pradesh: Recording reasons ensures decisions are lawful and not arbitrary.
- Mahabir Prasad v. State of U.P.: The duty to provide reasons is implicit in the nature of appellate jurisdiction.
- Commissioner of Income Tax v. Walchand and Co.: The Tribunal must record reasons in support of its decisions.

5. Analysis of Oral Pronouncement:
The Tribunal concluded that the oral pronouncement "Appeal allowed. Order to follow" without a reasoned order does not constitute a valid order under Section 35-C. The formal expression of a decision must be accompanied by intelligible grounds or reasons.

6. Inapplicability of Certain Judgments:
The Tribunal distinguished the present case from Surendra Singh v. State of Uttar Pradesh and Vinod Kumar Singh v. Banaras Hindu University, where judgments were dictated but not signed. In the present case, no judgment was dictated, and the formal expression of the decision was incomplete.

7. Conclusion:
The Tribunal overruled the preliminary objection, holding that the oral pronouncement on 19-4-1988 was not a valid order under Section 35-C. The case was rightly reopened for rehearing due to the absence of a reasoned and written order.

Summary:
The Tribunal concluded that an oral pronouncement without a reasoned and written order does not constitute a valid order under Section 35-C of the Central Excises and Salt Act, 1944. The requirement for a reasoned order is implicit in the Act's provisions and supported by judicial precedents. The preliminary objection by the appellants was overruled, and the case was correctly reopened for rehearing.

Issues Involved:
1. Maintainability of appeals filed by HPF.
2. Definition and scope of "person aggrieved" under Section 129-A of the Customs Act, 1962.
3. Legal standing of HPF to file appeals against the orders of the Collectors of Customs.

Issue-wise Detailed Analysis:

1. Maintainability of Appeals Filed by HPF:
The primary issue was whether the two appeals filed by HPF were maintainable. Northern Plastics argued that HPF were not "aggrieved persons" within the meaning of Section 129-A of the Customs Act, 1962, and therefore, had no right to file appeals against the orders passed by the Collectors of Customs. The Tribunal had to first decide on the maintainability of these appeals before delving into the merits of the case.

2. Definition and Scope of "Person Aggrieved" Under Section 129-A of the Customs Act, 1962:
Shri Kantawala, representing Northern Plastics, argued that the term "person aggrieved" was not defined in the Customs Act. He referred to various legal dictionaries and case laws to assert that a "person aggrieved" does not include someone who is merely disappointed by an order. He cited several judgments, including those from the High Courts of Allahabad and Bombay, to support his argument that HPF did not qualify as "persons aggrieved" since they were not directly affected by the orders of the Collectors.

Shri Sanghi, representing HPF, countered by arguing that HPF were indeed "persons aggrieved" as the orders impugned before the Tribunal harmed their interests. He emphasized that HPF, being a Government of India company, had a vital interest in preventing illegal importation which could adversely affect their operations and the national economy. He cited judgments from the Supreme Court, including S.P. Gupta and Bar Council of Maharashtra v. V.M. Dabholkar, to argue for a liberal interpretation of the term "person aggrieved."

The Tribunal noted that the Customs Act did not explicitly define "person aggrieved" and relied on judicial interpretations. It referred to various case laws and legal dictionaries to understand the scope of the term. The Tribunal concluded that the term "person aggrieved" should be interpreted within the scope of the Customs Act and not beyond it. The Tribunal emphasized that it was a creature of the statute and not the Constitution, and its powers were confined to the provisions of the Customs Act.

3. Legal Standing of HPF to File Appeals Against the Orders of the Collectors of Customs:
The Tribunal examined whether HPF had the legal standing to file the appeals. It considered the arguments of both parties and the relevant case laws. The Tribunal referred to the judgments in Hindustan Aeronautics Ltd., Polychem Ltd., and Mahendra and Mahendra v. CCE, among others, to understand the scope of the right to appeal under the Customs Act.

The Tribunal observed that while HPF might have a right to file a suit, they did not have a right to file an appeal against the Collectors' orders. It noted that the right of appeal is not inherent and must be conferred by statute. The Tribunal concluded that HPF were not "persons aggrieved" for the purpose of filing the appeals under Section 129-A of the Customs Act.

Conclusion:
The Tribunal dismissed both appeals as not maintainable, holding that HPF did not qualify as "persons aggrieved" under Section 129-A of the Customs Act. The Tribunal allowed the miscellaneous applications filed by Northern Plastics, challenging the maintainability of the appeals. The Tribunal also noted that the merits of the case could still be examined through the statutory appeal filed by the Collector, Rajkot, acting under the orders of the Central Board of Excise & Customs.

Issues Involved:
1. Whether the assessee is liable for penalty for concealment of income for the assessment years 1972-73 to 1976-77.
2. Whether the returns filed by the assessee on 1-5-1977 were voluntary and in good faith.
3. Whether there was an oral agreement or understanding between the assessee and the Commissioner that no penalties would be levied or they would be waived.

Detailed Analysis:

1. Liability for Penalty for Concealment of Income
The assessee, a registered firm engaged in the preparation and sale of sweets, initially filed returns showing lower incomes for the assessment years 1972-73 to 1976-77. On 1-5-1977, the assessee filed revised returns admitting higher incomes for these years, which were significantly higher than the originally assessed incomes. The main controversy was whether the Commissioner had agreed to waive the penalties for concealment of income. The Income-tax Officer (ITO) issued notices under section 271(1)(c) for concealment of income and imposed penalties based on the difference between the original and revised returns. The Appellate Assistant Commissioner (AAC) upheld the penalties, finding no evidence of an agreement to waive penalties. The Tribunal, however, found that there was concealment of income, but the penalties should be canceled based on an alleged oral agreement with the Commissioner.

2. Voluntary and Good Faith Filing of Returns
The Tribunal examined whether the returns filed on 1-5-1977 were voluntary and in good faith. The assessee claimed the returns were filed voluntarily to buy peace with the Department. However, the Tribunal found that the returns were filed due to the necessity to show resources for purchasing a property, indicating that the returns were not filed in good faith. The Tribunal noted that the returns were filed under the constraint of potential adverse action by the Department, which negates the voluntary nature of the filings. The Tribunal concluded that the returns were neither voluntary nor in good faith.

3. Oral Agreement or Understanding for Waiver of Penalties
The Tribunal analyzed whether there was an oral agreement or understanding between the assessee and the Commissioner that no penalties would be levied. The Tribunal found no written evidence of such an agreement. The assessee's repeated reminders to the Commissioner about the assessments did not mention any agreement on penalties. The Tribunal noted that the Commissioner had not given any assurance in writing and had, in fact, rejected the assessee's petition for waiver of penalties under section 273A. The Tribunal concluded that there was no oral agreement or understanding for the waiver of penalties.

Conclusion:
The Tribunal, after considering all the facts and circumstances, concluded that:
1. There was clear concealment of income by the assessee.
2. The returns filed on 1-5-1977 were neither voluntary nor in good faith.
3. There was no oral agreement or understanding between the assessee and the Commissioner for the waiver of penalties.

The Tribunal canceled the penalties based on the alleged oral agreement, but the Third Member disagreed, emphasizing that the penalties were justified due to the concealment of income and the lack of voluntary and good faith filing of returns. The matter was referred to the President of the Income-tax Appellate Tribunal for a final decision.

Issues Involved:
1. Applicability of sections 11, 12, and 2(24)(iia) of the Income-tax Act, 1961 on the assessee's claim of exemption from taxation.
2. Taxability of sums received from National Agricultural Co-operative Marketing Federation of India (NAFED) as income or capital.
3. Validity of interest levy under section 217 and initiation of proceedings under sections 271(1)(c) and 273 of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Applicability of Sections 11, 12, and 2(24)(iia) of the Income-tax Act, 1961:
The Tribunal examined whether the provisions of sections 11, 12, and 2(24)(iia) affected the assessee's claim of exemption. The assessee argued that the contributions were not voluntary and were directed collections, thus not falling under the definition of income as per section 2(24)(iia). The Tribunal noted that the contributions were decided by the Price Fixation Committee, which included exporters, indicating that the collections were voluntary. The Tribunal also considered the extended definition of 'trust' in section 2(24)(iia), which includes any "other legal obligation," and concluded that the assessee, being a scientific research institution, fell within the ambit of taxable entities as per the Income-tax Act.

2. Taxability of Sums Received from NAFED:
The Tribunal analyzed whether the sums totaling Rs. 14,05,340 received from NAFED were taxable as income or constituted capital/corpus. The Tribunal referred to the judgment of the Delhi High Court in the case of State Trading Corpn. of India Ltd., which held that amounts received before the commencement of business activities are capital receipts. The Tribunal noted that the assessee was recognized as a scientific research institution only from 27th April 1979. Therefore, any contributions received before this date were considered capital receipts, forming the corpus of the foundation, and not taxable as income. The Tribunal emphasized that the contributions were explicitly towards the development fund, which constitutes the corpus.

3. Validity of Interest Levy under Section 217 and Initiation of Proceedings under Sections 271(1)(c) and 273:
Given the Tribunal's decision that the sums received were capital receipts and not taxable, the issues regarding the levy of interest under section 217 and the initiation of penalty proceedings under sections 271(1)(c) and 273 became academic. Consequently, the Tribunal did not address these issues in detail.

Separate Judgments:
The President of the Tribunal concurred with the conclusions but provided additional reasoning. He emphasized that the earlier Tribunal's decision for the assessment year 1978-79 was based on incorrect facts and did not consider the specific direction that contributions were towards the corpus. He reiterated that the contributions were capital receipts and, therefore, not taxable. Another Judicial Member, Shri V.P. Elhence, agreed with the conclusion and reasoning.

Conclusion:
The Tribunal allowed the assessee's appeal, holding that the sum of Rs. 14,05,340 received from NAFED was not taxable for the assessment year 1979-80 as it constituted capital or corpus for the foundation's activities. The issues regarding the levy of interest and penalty proceedings were not addressed due to the primary decision on the taxability of the sums received.

Issues Involved:

1. Deletion of addition of Rs. 47,469.
2. Deletion of additions of Rs. 2,77,385 and Rs. 19,880 on account of excess bonus.
3. Deletion of addition of Rs. 30,000 on account of entertainment expenditure.
4. Relief of Rs. 3,24,231 under s. 40A(5)/40(c) of the Act.
5. Deletion of addition of Rs. 38,750 out of fees paid to consultants.
6. Deletion of addition of Rs. 44,438 on account of office expenses.
7. Deletion of addition of Rs. 1,87,000 on account of valuation of stock.
8. Allowance of bad debt claim of Rs. 63,859.
9. Allowance of reduction of Rs. 2,37,432 on account of extra shift allowance.
10. Allowance of depreciation on moulds at the rate of 40%.
11. Cross-objections by the assessee.

Detailed Analysis:

1. Deletion of Addition of Rs. 47,469:
The first issue concerns the deletion of an addition of Rs. 47,469 by the CIT(A). The assessee, a public limited company, claimed a loss on discarded assets, which the IAC initially disallowed. The CIT(A) accepted the assessee's method of consistently writing off the written-down value of discarded assets and crediting sale proceeds as income. The Tribunal upheld the CIT(A)'s findings, noting the consistent accounting method and past acceptance by the Department. Consequently, the first ground of appeal was rejected.

2. Deletion of Additions of Rs. 2,77,385 and Rs. 19,880 on Account of Excess Bonus:
The second issue involves the deletion of additions related to excess bonus payments. The CIT(A) allowed these payments as bona fide business expenditures necessary for industrial peace. The Tribunal agreed with the CIT(A), noting the settlement with employees and the applicability of the CIT vs. Sivanandha Mills Ltd. case. The second ground of appeal was thus rejected.

3. Deletion of Addition of Rs. 30,000 on Account of Entertainment Expenditure:
The third issue pertains to the deletion of Rs. 30,000 from entertainment expenses. The CIT(A) reduced the disallowance by estimating that 20% of the total entertainment expenses were incurred on employees. The Tribunal found this estimation reasonable, considering the nature and extent of the assessee's business. The third ground of appeal was dismissed.

4. Relief of Rs. 3,24,231 under s. 40A(5)/40(c) of the Act:
The fourth issue concerns the relief of Rs. 3,24,231 under s. 40A(5)/40(c). The CIT(A) excluded medical reimbursement and other expenses from the disallowance calculation. The Tribunal upheld the CIT(A)'s decision, referencing relevant case law and Tribunal decisions. The fourth ground of appeal was rejected.

5. Deletion of Addition of Rs. 38,750 out of Fees Paid to Consultants:
The fifth issue involves the deletion of Rs. 38,750 from fees paid to consultants. The CIT(A) found that only Rs. 5,250 was covered by s. 80VV, with the remaining Rs. 16,750 allowable under s. 37. The Tribunal agreed with the CIT(A), confirming the decision and rejecting the fifth ground of appeal.

6. Deletion of Addition of Rs. 44,438 on Account of Office Expenses:
The sixth issue pertains to the deletion of Rs. 44,438 on account of office expenses. The CIT(A) treated these expenses as revenue expenditures, noting that no new asset had come into existence. The Tribunal agreed, referencing the Supreme Court decision in Empire Jute Co. Ltd. vs. CIT. The sixth ground of appeal was rejected.

7. Deletion of Addition of Rs. 1,87,000 on Account of Valuation of Stock:
The seventh issue concerns the deletion of Rs. 1,87,000 related to stock valuation. The CIT(A) accepted the assessee's explanation and adjustments for obsolete stock. The Tribunal found no reason to question the CIT(A)'s findings and confirmed the deletion. The seventh ground of appeal was rejected.

8. Allowance of Bad Debt Claim of Rs. 63,859:
The eighth issue involves the allowance of a bad debt claim of Rs. 63,859. The CIT(A) accepted the assessee's claim, referencing the Bombay High Court decision in Jethadhai Hirji and Jethabhai Ramdas vs. CIT. The Tribunal agreed with the CIT(A)'s application of the legal principles and confirmed the decision. The eighth ground of appeal was rejected.

9. Allowance of Reduction of Rs. 2,37,432 on Account of Extra Shift Allowance:
The ninth issue pertains to the allowance of a reduction of Rs. 2,37,432 for extra shift allowance. The CIT(A) directed the IAC to follow the Board's circular. The Tribunal found no reason to interfere with the CIT(A)'s decision, considering the Board's circular. The ninth ground of appeal was dismissed.

10. Allowance of Depreciation on Moulds at the Rate of 40%:
The tenth issue involves the allowance of depreciation on moulds at 40%. The CIT(A) justified this rate as the moulds were used in the plastic goods factory. The Tribunal confirmed the CIT(A)'s findings, rejecting the tenth ground of appeal.

11. Cross-Objections by the Assessee:
The assessee's cross-objections were rejected as the Tribunal confirmed the CIT(A)'s decisions on the related grounds. These included issues on deduction under s. 32(1)(iii), valuation of closing stock, office expenses, and extra shift depreciation on roads in factory premises.

Conclusion:
Both the departmental appeal and the assessee's cross-objections were dismissed, with the Tribunal upholding the CIT(A)'s decisions on all grounds.

Issues Involved:
1. Conflict between Indian IT Act and Double Taxation Avoidance Agreement (DTA).
2. Taxability of interest income from U.K. Treasury Stock.
3. Deduction claims for donations made to charitable trusts.
4. Interest on inter-branch deposits.
5. Deduction for interest attributable to head office credit balance.
6. Applicability of s. 40A(5) and s. 37(2A) restrictions.
7. Gross vs. net income from interest.
8. Deduction of head office expenses.
9. Deduction under s. 80G.
10. Business promotion expenditure.
11. Loss on sale of car.
12. Levy of interest under s. 139(8) and s. 217(1A).

Summary:

1. Conflict between Indian IT Act and DTA:
The Tribunal emphasized that in case of conflict between the Indian IT Act and the DTA, the provisions of the DTA will prevail as specified in Article XI(1) of the DTA.

2. Taxability of Interest Income from U.K. Treasury Stock:
The Tribunal rejected the assessee's contention that interest on U.K. Treasury Stock was not taxable in India. It was held that the interest income from these securities, which were kept in India as a condition precedent to continuing banking operations, would be taxable as industrial or commercial profits under the DTA.

3. Deduction Claims for Donations:
The Tribunal upheld the CIT(A)'s decision to deny full deduction for donations made to charitable trusts under s. 80G, as the assessee failed to prove any nexus between the donations and the receipt of deposits or any other business benefit.

4. Interest on Inter-Branch Deposits:
The Tribunal rejected the assessee's grounds of appeal regarding interest on inter-branch deposits, noting that no specific arguments were addressed, and the grounds were considered redundant.

5. Deduction for Interest Attributable to Head Office Credit Balance:
The Tribunal agreed with the CIT(A) that no deduction for interest attributable to head office credit balance should be allowed, as these were the assessee's own funds and there was no question of treating the Indian branch as a separate entity dealing at arm's length with the non-resident assessee.

6. Applicability of s. 40A(5) and s. 37(2A) Restrictions:
The Tribunal noted that the latest completed assessment for asst. yr. 1986-87 did not make disallowances under s. 40A(5) and s. 37(2A) based on the Board's clarification from 1966. Therefore, it was held that no additions under these sections should be made in the assessment years under appeal.

7. Gross vs. Net Income from Interest:
The Tribunal held that the gross amount of interest should be taken into account for tax purposes, and the question of deductible expenses from gross interest needs to be considered separately.

8. Deduction of Head Office Expenses:
The Tribunal upheld the CIT(A)'s direction that head office expenses should be apportioned on the basis of Indian net proceeds to global net proceeds, in line with Art. III(3) of the DTA.

9. Deduction under s. 80G:
The Tribunal modified the CIT(A)'s direction, stating that while the AO can demand original receipts of donation, they should not require the original certificates issued by the CIT in respect of the donee trust.

10. Business Promotion Expenditure:
The Tribunal found that disallowance under s. 37(2A) would be rendered redundant in light of the Department's stand in the assessment for asst. yr. 1986-87, where no disallowance was made under s. 37(3A).

11. Loss on Sale of Car:
The Tribunal restored the matter of loss on sale of car to the file of the AO for adjudication as per law, noting some confusion and mixing up of figures in the computation.

12. Levy of Interest under s. 139(8) and s. 217(1A):
The Tribunal upheld the Department's contention that the matter of interest under s. 139(8) was not appealable, reversing the CIT(A)'s directions. The assessee was advised to approach appropriate authorities for reduction/waiver of interest. Similar reasoning applied to interest under s. 217(1A) for asst. yr. 1978-79.

Conclusion:
The appeals were partly allowed, with specific directions provided for each issue, ensuring compliance with the DTA and relevant provisions of the Indian IT Act.

Issues:
1. Date of acquisition of gold bonds and computation of capital gains.
2. Interpretation of Circular No. 415 dated 14th March, 1985.
3. Reassessment by the ITO based on the order under section 263.
4. Appeal by the assessee against the reassessment order.
5. Appeal by the Revenue against the order of the CIT(A).
6. Cross-objection by the assessee on certain findings of the first appellate authority.

Analysis:

1. The main issue in this case revolves around the determination of the date of acquisition of gold bonds and the computation of capital gains. The CIT passed an order under section 263 directing the ITO to treat the date of acquisition as 27th Oct., 1980, the maturity date of the gold bonds, instead of 13th April, 1981, when the gold bonds were redeemed. The Tribunal held that the Circular No. 415 dated 14th March, 1985, clarifies that the date of redemption of the gold bonds should be considered as the date of acquisition of gold for computing capital gains. The Tribunal rejected the assessee's argument that the actual redemption date should be considered, emphasizing that the market value of the bonds on the redemption date is the cost of acquisition of gold for capital gains calculation.

2. The interpretation of Circular No. 415 dated 14th March, 1985, was crucial in determining the date of acquisition of the gold bonds. The Tribunal relied on the Circular to establish that the market value of the bonds on the redemption date should be used for computing capital gains. The Tribunal emphasized that the Circular clearly states that capital gains arise on the subsequent sale of gold, with the cost of acquisition being the market value of the bonds on the redemption date. This interpretation guided the decision in favor of the Revenue and upheld the order passed by the CIT under section 263.

3. The ITO reassessed the assessee based on the CIT's order under section 263, resulting in additional income assessment. The reassessment was challenged by the assessee, leading to an appeal before the CIT(A). The CIT(A) set aside the reassessment order, considering the date of redemption, 13th April, 1981, as the date of acquisition of gold. This decision was appealed by the Revenue, highlighting the disagreement on the date of acquisition and subsequent capital gains calculation.

4. The assessee filed an appeal against the CIT's order under section 263, arguing that the date of acquisition should be 13th April, 1981, the redemption date of the gold bonds. The Tribunal analyzed the contentions of both parties, emphasizing the relevance of Circular No. 415 and the market value of the bonds on the redemption date for determining the cost of acquisition of gold. Ultimately, the Tribunal decided in favor of the Revenue, confirming the order passed by the CIT under section 263.

5. The Revenue appealed against the CIT(A)'s decision, contending that the date of acquisition of gold should be 27th Oct., 1980, the maturity date of the gold bonds, instead of 13th April, 1981. The Tribunal, based on its findings in the previous appeal, reversed the CIT(A)'s decision, supporting the Revenue's stance on the date of acquisition for capital gains computation.

6. The assessee raised a cross-objection on certain findings of the first appellate authority, primarily related to the classification of capital gains as short term instead of long term. The Tribunal dismissed the first ground of the cross-objection, noting that the assessee's initial declaration and argument supported short term capital gains. However, the Tribunal ruled in favor of the assessee on the second ground concerning interest under section 217(1A), directing that no interest should be charged from the assessee. The cross-objection was partly allowed based on these considerations.

Issues Involved:
1. Investment Allowance Claim
2. Relief under Section 80J
3. Alternative Claim under Sections 80I and 80HH(A)

Issue-wise Detailed Analysis:

1. Investment Allowance Claim:

The assessee, a Public Limited Company, claimed an Investment Allowance for the assessment year 1982-83, arguing that the assets were put to use during this year, despite being purchased in the preceding year. The IAC(A) noted that the assets were installed and ready for use in the previous year (1981-82), and thus, the claim for Investment Allowance was not allowable for 1982-83. However, the prohibition on Investment Allowance for sanitary ware assets was removed starting from 1st April 1982.

The IAC(A) processed the claim by disallowing amounts for assets used in the previous year and for items costing less than Rs. 750. The IAC(A) allowed Investment Allowance for items that received permissions from government agencies during the previous year relevant to the assessment year 1982-83. The assessee argued that the main furnace (Tunnel Kiln) could not be used due to the non-availability of natural gas, and commercial production started only from 1st March 1981 with an imported oil burner.

The Tribunal observed that the facts indicated nominal trial production in the previous year and that regular commercial production commenced from 1st March 1981, relevant to the assessment year 1982-83. The Tribunal held that the claim for Investment Allowance was rightly made for 1982-83, as the assets were put to use in that year. The Tribunal also allowed the claim for Investment Allowance on drawings and designs, as they were used for the installation of the kiln put to use in 1982-83.

2. Relief under Section 80J:

The IAC(A) rejected the assessee's claim for relief under Section 80J, citing the same reasons as for the Investment Allowance, i.e., the commencement of regular production in the previous year. The CIT(A) confirmed this view. The assessee argued that commercial production started from 1st March 1981, relevant to the assessment year 1982-83, and not from the date of trial production (21st July 1980).

The Tribunal accepted the assessee's claim for relief under Section 80J, adopting the same reasoning as for the Investment Allowance. The Tribunal directed the AO to verify the figures and work out the deduction accordingly.

3. Alternative Claim under Sections 80I and 80HH(A):

The assessee raised an alternative claim under Sections 80I and 80HH(A), which was not pressed during the hearing and was thus rejected.

Conclusion:

The appeal was partly allowed, with the Tribunal granting the Investment Allowance and relief under Section 80J for the assessment year 1982-83. The alternative claim under Sections 80I and 80HH(A) was rejected as it was not pursued during the hearing.

Issues: Valuation of lands for computation of capital gains, Revisional powers of Commissioner under sec. 263, Competency of Commissioner to pass order after CIT(A) decision, Discrepancy in valuation of land in different cases.

Valuation of lands for computation of capital gains:
The appeal involved the valuation of certain lands for computing capital gains. The assessee claimed the land's value at Rs. 45 per sq.yd., while the ITO initially assessed it at Rs. 28 per sq.yd. The Commissioner, using revisional powers, directed the ITO to reframe the assessment, resulting in the land's value being assessed at Rs. 2.07 per sq.yd. The valuation was based on evidence from the HUF's wealth-tax returns showing the land's value at Rs. 2.07 per sq.yd. The CIT(A) upheld this valuation, rejecting the assessee's arguments regarding Stamp Duty and other family members' valuations. The Tribunal held that the land's value for capital gains must be Rs. 2.07 per sq.yd., regardless of valuations in other cases.

Revisional powers of Commissioner under sec. 263:
The assessee challenged the competency of the Commissioner to pass an order under sec. 263 after the CIT(A) had already decided on the original assessment. The CIT(A) rejected this argument, emphasizing the revisional order's impact on the assessment. The Tribunal affirmed the Commissioner's authority to revise the assessment, leading to a substantial increase in capital gains.

Competency of Commissioner to pass order after CIT(A) decision:
The assessee contested the Commissioner's authority to issue a revisional order under sec. 263 post the CIT(A) decision. The CIT(A) rejected this argument, highlighting the revisional order's impact on the assessment. The Tribunal upheld the Commissioner's competence to revise the assessment, resulting in a significant change in the capital gains assessment.

Discrepancy in valuation of land in different cases:
During the hearing, the assessee presented evidence of differing land valuations in other cases, including one where the land was valued at Rs. 35 per sq.yd. The departmental representative pointed out that the valuation in those cases differed from the HUF's wealth-tax records, which showed the land's value at Rs. 2.07 per sq.yd. The Tribunal emphasized the importance of consistency in valuation, holding that the assessee's valuation for capital gains must prevail, despite variations in other cases. Ultimately, the appeal was dismissed, affirming the valuation at Rs. 2.07 per sq.yd.

Issues Involved:
1. Investment Allowance
2. Relief under Section 80J
3. Alternative claims under Sections 80-I and 80HH(A)

Issue-wise Detailed Analysis:

1. Investment Allowance:
The primary issue was the assessee's claim for Investment Allowance on assets worth Rs. 84,69,945. The assessee, a Public Limited Company, claimed this allowance for the assessment year (A.Y.) 1982-83, stating that the assets were put to use during this year, although they were purchased in the preceding year (A.Y. 1981-82). The Income-tax Appellate Tribunal (ITAT) noted that the construction of the Kadi unit and installation of machinery were completed in A.Y. 1981-82, and depreciation was claimed and allowed for that year. However, the Investment Allowance was specifically prohibited for sanitaryware manufacturing under the 11th Schedule for A.Y. 1981-82, but this prohibition was removed from A.Y. 1982-83.

The department's stance was that the assets were "used" in A.Y. 1981-82 as they were installed and ready for use, citing cases like Whittle Anderson Ltd. v. CIT and Capital Bus Service (P.) Ltd. v. CIT. The assessee argued that the main kiln was not operational due to the lack of natural gas, and commercial production started only on 1-3-81 with an imported oil burner, making A.Y. 1982-83 the appropriate year for claiming the allowance. The ITAT accepted the assessee's argument, emphasizing that commercial production commenced on 1-3-81, supported by the Industries Commissioner's certificate and various documents. The tribunal concluded that the assets were first put to use in A.Y. 1982-83, thus allowing the Investment Allowance for that year.

2. Relief under Section 80J:
The second issue was the assessee's claim for relief under Section 80J, which was similarly rejected by the department on the grounds that regular production had commenced in A.Y. 1981-82. The ITAT applied the same reasoning as in the Investment Allowance issue, noting that commercial production began on 1-3-81, making A.Y. 1982-83 the relevant year for the claim. The tribunal directed the assessing officer to verify the figures and work out the deduction accordingly, thus deciding this issue in favor of the assessee.

3. Alternative Claims under Sections 80-I and 80HH(A):
The final issue was the alternative claim under Sections 80-I and 80HH(A) of the Income-tax Act, 1961. This ground was not pressed by the assessee during the hearing and was therefore rejected by the tribunal.

Separate Judgment:
The Judicial Member concurred with the conclusions of the Accountant Member but added that the machinery was not physically used in A.Y. 1981-82, and the department's case rested on passive use. He emphasized that the machinery was physically used in A.Y. 1982-83, entitling the assessee to the allowance for that year. He found it unnecessary to delve into the applicability of the Board's Circular pertaining to Section 80J or the distinction between commercial and trial production for the earlier year.

Issues Involved:
1. Maintainability of the suit under the Central Excises and Salt Act, 1944.
2. Non-joinder of necessary and proper parties.
3. Validity of the show cause notice dated March 27, 1986, and the order dated January 29, 1988.

Issue 1: Maintainability of the Suit
The plaintiff argued that the suit is maintainable as the proceedings, including the search, show cause notice, and the order dated January 29, 1988, are without jurisdiction, illegal, mala fide, void ab initio, and nullity. The court referenced several judgments, including H.C. Darbara Singh v. The Punjab State and Dhulabhai v. State of Madhya Pradesh, establishing that civil courts have jurisdiction if an authority acts without jurisdiction or violates fundamental principles of judicial procedure. The court concluded that the suit is maintainable, given the allegations of jurisdictional errors and non-compliance with statutory provisions.

Issue 2: Non-joinder of Necessary and Proper Parties
The defendants argued that the suit was bad for non-joinder of necessary parties, such as the Collector of Central Excise, New Delhi, and the Directorate of Anti-Evasion, New Delhi. The court held that the Collector and Directorate were not necessary parties since the Union of India was already impleaded as a defendant. The presence of the Collector or Directorate was not necessary for the court to adjudicate the issues effectively.

Issue 3: Validity of the Show Cause Notice and Order
The plaintiff challenged the show cause notice and the subsequent order on multiple grounds, including:
- The reward scheme for officials leading to departmental bias.
- Lack of jurisdiction of the Director of Publications to act as a Collector of Central Excise.
- The illegal and unilateral transfer of the case from the Collector to the Director of Publications.
- Non-application of mind and lack of material evidence against the plaintiff company.

The court found that the show cause notice was issued without proper jurisdiction and material evidence. The statements of only 5 out of 62 dealers recorded indicated extra payments to Mr. Vyas, the Sales Executive, without implicating the plaintiff company or its directors. The court noted that the total transactions involving alleged extra payments constituted less than 1% of the total sales, and there was no evidence of the plaintiff company's involvement in these transactions. Consequently, the court declared the show cause notice dated March 27, 1986, and the order dated January 29, 1988, as illegal and without jurisdiction.

Relief Granted:
The court decreed in favor of the plaintiff, declaring the show cause notice and the subsequent order as illegal and without jurisdiction, and granted a permanent injunction restraining the defendants from taking any action based on the impugned notice and order. The court also directed that the amount deposited by the plaintiff be accounted for in the records of the defendants.

Issues:
Classification of rubber-sheet manufactured by petitioners, refund of excess duty, legality of classification by Central Excise Authorities.

Analysis:
The petitioners sought a Writ of Mandamus challenging the classification of rubber-sheet manufactured by them by the Assistant Collector of Central Excise. They argued that their products should not be classified as cotton fabrics but under a different item in the Central Excises and Salt Act, 1944. The petitioners contended that the classification should follow the procedure laid down in Rule 173 of the Central Excise Rules, 1944. They also claimed refund of excess duty paid under protest due to the classification dispute.

The petitioners emphasized that the major constituent of their rubber-sheeting was rubber, and classification should consider this aspect. They argued that changes in Tariff relating to cotton fabrics did not cover their products and they were entitled to a refund of Central Excise duty. Multiple refund applications were made by the petitioners, which had not been disposed of in their favor, leading them to approach the Writ Court seeking relief.

On the other hand, the respondents contended that the petitioners' products were not simply rubber goods but cotton fabrics subjected to waterproofing and rubberization. They argued that the goods fell under specific tariff items in the Central Excises and Salt Act, 1944. The Central Excise Authorities maintained that they had acted in accordance with the law, and the petitioners' attempts to classify their products differently had no merit.

After detailed scrutiny of arguments from both parties and considering various notifications and classifications under the Central Excises and Salt Act, 1944, the Court found that the dispute centered around whether the petitioners' products should be classified under Tariff Item No. 16A(2) or Item No. 19(l)(b). The Court noted the cancellation of previous exemption notifications and the retrospective effect of the Central Excise Laws (Amendment Validation) Act, 1982, which impacted the grounds for claiming exemption from duty.

Ultimately, the Court ruled against the petitioners, stating that their products should be classified under Item No. 19(l)(b) of the First Schedule to the Central Excises and Salt Act. The Court found no merit in the petitioners' claims for exemption or refund, concluding that the steps taken by the respondents were lawful. Consequently, the Rule was discharged, all interim orders were vacated, and no costs were awarded.

Issues:
Impugning demand of increased Customs duty due to delayed clearance from bonded warehouse.

Analysis:
The petitioners imported goods in 1981 and cleared them to the bonded warehouse. They paid the Customs duty and demurrage on 28th February 1983 but were denied clearance by the warehouse Superintendent after 4 p.m. due to instructions from the Assistant Collector of Customs. The respondents later demanded increased Customs duty effective from 1st March 1983. The petitioners argued that they were entitled to remove the goods on the payment date and should not be liable for the increased duty.

The absence of an affidavit in reply left the petitioners' claims uncontroverted. The court noted the reliance on a circular dated 18th February 1983 by the respondents but criticized the lack of communication regarding their case or the circular's specifics. The circular's relevance was questioned, especially concerning the normal closing hours and its binding nature on citizens. The court highlighted that the circular did not justify the refusal of clearance on the payment date, rendering the demand for increased duty invalid.

The judgment favored the petitioners, deeming their petition successful. The respondents were directed to pay the petitioners' costs. The court ruled that the petitioners were not liable for the increased Customs duty as they should have been allowed to clear the goods on the payment date, rejecting the respondents' claim based on the circular's instructions.

Issues Involved:
1. Limitation period for filing the suit.
2. Applicability of Section 17(1)(c) of the Limitation Act, 1963.
3. Refund of money paid under a mistake of law.
4. Doctrine of unjust enrichment.
5. Juridical basis of the obligation to refund.
6. Applicability of Section 72 of the Indian Contract Act.

Detailed Analysis:

1. Limitation Period for Filing the Suit:
The primary issue was whether the suit filed by the appellants was barred by limitation. The trial court and the High Court dismissed the suit based on articles 62, 96, and 113 of the Limitation Act, 1963, respectively, holding that the limitation period began from the date the payments were made or the date the Government decided not to charge the extra 7 1/2 percent.

2. Applicability of Section 17(1)(c) of the Limitation Act, 1963:
The appellants contended that the limitation period should start from the date they discovered the mistake, as per Section 17(1)(c) of the Limitation Act, 1963. This section provides that the period of limitation does not begin until the plaintiff has discovered the mistake or could, with reasonable diligence, have discovered it. The court accepted this argument, noting that the appellants could not have known about the Government's decision on October 17, 1961, as it was an internal communication not conveyed to them.

3. Refund of Money Paid Under a Mistake of Law:
The court established that the suit was for the refund of money paid under a mistake of law. The appellants paid the extra 7 1/2 percent believing it was legally required, but subsequent High Court judgments declared the levy illegal. The court cited precedents such as STO v. Kanhaiya Lal Makund Lal Saraf and D. Cawasji and Co. v. State of Mysore, affirming that money paid under a mistake of law is refundable under Section 72 of the Indian Contract Act.

4. Doctrine of Unjust Enrichment:
The court discussed the doctrine of unjust enrichment, which requires that the defendant has been enriched at the plaintiff's expense and that retaining this enrichment would be unjust. The appellants' payment of the extra 7 1/2 percent, which was later declared illegal, constituted unjust enrichment of the Government.

5. Juridical Basis of the Obligation to Refund:
The court referenced various legal theories and cases to explain the juridical basis of the obligation to refund money paid under a mistake of law. It cited Lord Mansfield's explanation in Moses v. Macferlan and the principle of "indebitatus assumpsit" in English common law, which evolved into the modern principle of restitution and quasi-contract.

6. Applicability of Section 72 of the Indian Contract Act:
Section 72 of the Indian Contract Act mandates that a person to whom money is paid by mistake must repay it. The court acknowledged that this section covers payments made under a mistake of law and that the appellants were entitled to a refund. The court also noted that the appellants and the Government were not in pari delicto (equal fault), as the appellants had no choice but to pay the extra amount to secure the contracts.

Conclusion:
The Supreme Court set aside the judgment of the High Court, allowing the appeal and remanding the suit to the trial court for a decision on merits. The court held that the suit was within the limitation period under Article 113 of the Limitation Act, 1963, considering the appellants' discovery of the mistake. The appellants were awarded the costs of the appeal.

Haji Ismail and Company filed a writ petition seeking to quash an order of the Commissioner of Income-tax for imposing penalty. The petitioner filed the return late, but without any notice. The Commissioner wrongly refused to waive the penalty without considering relevant circumstances. The High Court allowed the petition, quashed the order, and directed the Commissioner to reconsider the matter.

The High Court of Allahabad allowed the writ petition filed by Barnwal Abhushan Kendra, a registered firm, challenging the rejection of their application for waiver of penalty and interest for late filing of income tax return for the assessment year 1980-81. The court found that the Commissioner of Income-tax erred in not considering the power under section 273A of the Income-tax Act to reduce or waive the penalty. The court quashed the impugned order and directed the Commissioner to reconsider the matter.

The High Court dismissed the Commissioner's request for reference of two questions of law to the court. The first question pertained to cash credits assessed as income from undisclosed sources, which the Tribunal found to be advances received for supplies made. The second question related to an addition of income from undisclosed sources due to an alleged undervaluation of hypothecated stocks, which the Tribunal concluded lacked evidence to support the Income-tax Officer's decision. The court deemed both questions to be questions of fact and dismissed the petition with no costs.

Case: 1989 (7) TMI 45 - DELHI High Court
Judges: B. N. KIRPAL, C. L. CHAUDHARY
The court identified two questions of law:
1. Validity of penalty under section 18(1)(a) of Rs. 18,100
2. Filing date of wealth return by assessee as January 31, 1973
Tribunal instructed to refer these questions to the court.