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Showing 181 to 195 of 195 Records
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1987 (12) TMI 15
Issues:
1. Period of limitation for recovery of arrears of house tax due to the Municipal Corporation of Delhi.
Analysis:
The judgment deals with a second appeal challenging the period of limitation for the recovery of arrears of house tax due to the Municipal Corporation of Delhi. The appellant contested a demand notice for arrears of house tax, claiming exemption due to the property's history as an evacuee property. The appellant also argued that the demand was barred by limitation. The Municipal Corporation of Delhi defended the suit, asserting the legality of the demand and the absence of limitation on house tax recovery. The key issues revolved around the legality of the demand notice and the period of limitation for house tax recovery.
The trial court found the demand notice barred by limitation under Article 113 of the Limitation Act, restraining the Corporation from recovering arrears prior to February 21, 1965. However, the Senior Sub-judge in the second appeal held that no specific limitation period applied to house tax recovery by the Municipal Corporation of Delhi. He relied on precedents such as Municipal Corporation, Delhi v. Balkishan Das and Mittar Sain v. Municipal Corporation of Delhi, asserting that house tax arrears could be recovered without limitation.
The judgment analyzed the relevant legal provisions, emphasizing Section 123 of the Delhi Municipal Corporation Act, making property taxes a first charge on the property. It discussed the applicability of Article 62 of the Limitation Act, which allows a 12-year period for enforcing payment charged upon immovable property. The appellant's argument for applying Article 113, prescribing a three-year limitation, was dismissed as the house tax was deemed a first charge on the property, aligning with precedents from Bombay and Allahabad High Courts.
The judgment distinguished cases involving different taxes, such as advertisement tax, where a residuary article applied due to the absence of specific limitations. It concluded that Article 62 of the Limitation Act governed the demand in question, ensuring it was not barred by limitation. The appeal was dismissed, emphasizing the precedence set by earlier judgments and the property tax's status as a first charge on the property, thus upholding the Corporation's right to recover the arrears of house tax.
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1987 (12) TMI 14
Issues Involved:
1. Quashing of ex parte assessment orders for the assessment years 1963-64, 1964-65, and 1965-66.
2. Quashing of the proclamation dated March 24, 1987, for auctioning house No. 74/110, Dhan Kutti, Kanpur.
3. Validity of recovery proceedings based on ex parte assessment orders.
4. Service of notices under section 143(2) of the Income-tax Act, 1961, and assessment orders on the partners of the firm, Badshah Pasand Karyalaya.
5. The legal competence of the receiver to receive notices and assessment orders for the firm.
Issue-wise Detailed Analysis:
1. Quashing of ex parte assessment orders for the assessment years 1963-64, 1964-65, and 1965-66:
The petitioner requested the court to quash the ex parte assessment orders made by respondent No. 2 for the assessment years 1963-64, 1964-65, and 1965-66, arguing that the notices under section 143(2) of the Income-tax Act, 1961, and the assessment orders and demand notices were not served on the partners of the firm, Badshah Pasand Karyalaya. The court found that the notices and assessment orders were duly served on the receiver, who was legally competent to receive them. The petitioner's contention that the receiver had no concern with the business of the firm constituted under the deed dated October 11, 1962, was not accepted as there was no material on record to support this claim.
2. Quashing of the proclamation dated March 24, 1987, for auctioning house No. 74/110, Dhan Kutti, Kanpur:
The petitioner sought to quash the proclamation for auctioning the house, arguing that the recovery proceedings were null and void as the assessment orders were not served on the partners. The court found that the recovery proceedings by way of auction of the house were valid as the notices and assessment orders were served on the receiver, who was authorized to conduct the business and other activities of the firm. The court also noted that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969.
3. Validity of recovery proceedings based on ex parte assessment orders:
The petitioner argued that the recovery proceedings based on the ex parte assessment orders were invalid as the notices and assessment orders were not served on the partners. The court found that the recovery proceedings were valid as the notices and assessment orders were served on the receiver, who was legally competent to receive them. The court also noted that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969 and failed to take timely action to challenge the assessment orders.
4. Service of notices under section 143(2) of the Income-tax Act, 1961, and assessment orders on the partners of the firm, Badshah Pasand Karyalaya:
The petitioner contended that the notices under section 143(2) of the Income-tax Act, 1961, and the assessment orders and demand notices were not served on the partners of the firm. The court found that the notices and assessment orders were duly served on the receiver, who was legally competent to receive them. The court also noted that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969.
5. The legal competence of the receiver to receive notices and assessment orders for the firm:
The petitioner argued that the receiver appointed in May 1966 was not legally competent to receive the notices and assessment orders for the assessment years 1963-64 to 1965-66. The court found that the receiver was authorized to conduct the business and other activities of the firm, Badshah Pasand Karyalaya, and was legally competent to receive the notices and assessment orders. The court also noted that the receiver made an application under section 146 of the Income-tax Act, 1961, to set aside the ex parte assessment orders, indicating that he was interested in the partners of the firm.
Conclusion:
The court dismissed the petition, finding that the petitioner and his co-partners were aware of the assessment proceedings and the attachment of the house since 1969 and failed to take timely action to challenge the assessment orders. The court held that the recovery proceedings by way of auction of the house were valid and that the receiver was legally competent to receive the notices and assessment orders. The court declined to grant the relief sought by the petitioner and dismissed the petition with no order as to costs.
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1987 (12) TMI 13
Issues:
1. Competency of the prosecution against the petitioners under sections 276B of the Income-tax Act and sections 420, 511, 120B, and 34 of the Indian Penal Code.
2. Interpretation of section 279 of the Income-tax Act regarding the prosecution at the instance of the Commissioner.
3. Validity of the authority for prosecution under section 279 of the Act.
4. Whether the complaint filed by the Income-tax Officer is valid despite the mention of the Union of India.
Analysis:
The judgment pertains to a revision petition challenging the order of an Additional Chief Judicial Magistrate regarding the prosecution of the petitioners under sections 276B of the Income-tax Act and various sections of the Indian Penal Code. The petitioners objected to their prosecution on grounds of non-cognizability of the offense and lack of authority under section 279 of the Act. The Magistrate dismissed these objections, leading to the revision petition.
The main issue revolves around the interpretation of section 279 of the Income-tax Act, which mandates that a person cannot be prosecuted for certain offenses except at the instance of the Commissioner. The judgment cites precedents to establish that the complaint need not be filed directly by the Commissioner and can be done by an authorized officer. The order passed by the Commissioner authorizing the Income-tax Officer to file the complaint is deemed valid, ensuring compliance with the legal requirement.
Furthermore, the judgment emphasizes that the requirement of authority for prosecution does not always necessitate the authority to apply its mind before sanctioning. It is highlighted that evidence can be presented during the trial to validate the authority for prosecution under section 279. The judgment underscores that the substance of the complaint being at the instance of the Commissioner is crucial, regardless of formalities like mentioning the Union of India in the title.
Ultimately, the revision petition is dismissed as lacking merit, affirming the validity of the prosecution against the petitioners under the relevant sections of the Income-tax Act and the Indian Penal Code. The judgment clarifies the legal nuances surrounding the authority for prosecution and the interpretation of statutory provisions, providing a comprehensive analysis of the issues raised in the case.
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1987 (12) TMI 12
The High Court of Allahabad dismissed the application regarding the assessment of a Hindu undivided family engaged in a business of sarafa and pawning. The court upheld the Tribunal's decision that two family members were benamidars for the family business, as they did not invest in or manage the business themselves.
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1987 (12) TMI 11
Issues involved:
The judgment involves a challenge to the order made by the Commissioner of Income-tax u/s 264 of the Income-tax Act, 1961 regarding capital gains arising from the sale and resale of shares in a company.
Details of the judgment:
1. Background:
The petitioners held 1,700 shares each in a company and entered into a contract for the sale of shares, which was conditional upon obtaining necessary permissions. The shares were agreed to be sold before a specified date.
2. Contention:
The appellants argued that the shares were not actually sold due to lack of required sanctions, and thus, the capital gains reported in their returns were a mistake.
3. Court's Analysis:
Upon examining the agreement, the court found that the intention of the parties was clear - if any shares remained unsold due to lack of permissions, even the shares already transferred had to be resold and the amounts repaid.
4. Conclusion:
The court upheld the Commissioner's decision, stating that the assessees did not err in filing their returns as the transaction was understood by the parties involved. The appeals were dismissed, and each party was directed to bear their respective costs.
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1987 (12) TMI 10
Issues:
Interpretation of section 2(14)(ii) of the Income-tax Act, 1961 regarding whether silver vessels qualify as 'personal effects'.
Detailed Analysis:
The case involved a question referred by the Income-tax Appellate Tribunal regarding the classification of silver vessels as 'personal effects' under section 2(14)(ii) of the Income-tax Act, 1961. The assessee had sold silverware items, claiming them to be personal effects excluded from the definition of "capital asset." The Income-tax Officer treated the difference in value as long-term capital gains, which was upheld by the Commissioner of Income-tax (Appeals). However, the Tribunal accepted the contention that the articles were personal effects, emphasizing their potential daily use despite their considerable value.
The Tribunal found that the silver articles were intended for daily use, even though they were not used every day due to their value. The Tribunal noted that the items, including dinner plates, glasses, and jugs, were capable of being used on various occasions like birthdays and festivals. The Tribunal's decision was based on the understanding that the articles were normally intended for personal or household use and were in fact used on different occasions throughout the year.
The Revenue challenged the Tribunal's decision, arguing that the Tribunal misdirected itself on the legal principle of personal effects as laid down by the Supreme Court. The Revenue contended that it was unusual for a person to keep numerous silver items for personal or household use, as these items are rarely used for such purposes. However, the Tribunal's acceptance of the assessee's claim was based on the representative's enumeration of occasions when the articles were used, implying that they were normally intended for personal or household use and were in fact utilized as such on various occasions.
The Court acknowledged the absence of a specific challenge to the Tribunal's findings and concluded that, based on the available evidence and the Tribunal's decision, the silver vessels qualified as personal effects. The Court directed the parties to bear their respective costs and ordered the judgment to be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.
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1987 (12) TMI 9
Issues Involved:
1. Service of demand notices under Section 156 of the Income-tax Act.
2. Jurisdiction of the civil court to investigate the service of demand notices.
3. Recovery of arrears of income-tax dues from the opposite parties.
Detailed Analysis:
1. Service of Demand Notices under Section 156 of the Income-tax Act:
The petitioner challenged the order of the learned Sub-judge, First Court, Cuttack, which rejected a petition under Section 226(4) of the Income-tax Act. The undisputed facts were that opposite parties Nos. 1 and 2, partners of the firm opposite party No. 3, owed income-tax, penalty, and interest totaling Rs. 6,88,244. The Income-tax Officer filed an application under Section 226(4) to recover Rs. 2,99,413.50 from the amount deposited in the court. The opposite parties objected, claiming that demand notices under Section 156 were not served, except for the years 1962-63 and 1963-64, where the demands were later modified on appeal, and no fresh notices were served.
The learned Sub-judge found that demand notices were not served on the opposite parties and that the demand for 1962-63 was reduced by Rs. 20,000, which the Income-tax Officer did not consider. The court also noted the absence of documents proving the outstanding dues of Rs. 6,88,244.
2. Jurisdiction of the Civil Court to Investigate the Service of Demand Notices:
The main contention was whether the civil court had jurisdiction to investigate the service of demand notices. The court, referencing its judgment in ITO v. Manmohanlal [1987] 168 ITR 56 (Orissa), held that the civil court could not investigate whether notices under Section 156 were served. The proper forum for such objections was before the Tax Recovery Officer. The Supreme Court, in Manmohanlal v. ITO [1987] 168 ITR 616 (SC), upheld that tax recovery could only proceed if a valid notice of demand had been served, remanding the case to the High Court to decide afresh.
3. Recovery of Arrears of Income-tax Dues from the Opposite Parties:
Upon remand, the High Court examined the arrears for the years 1962-63 and 1963-64. For 1962-63, the net tax due was Rs. 97,832.25, reduced by Rs. 20,000 on appeal. For 1963-64, the demand was Rs. 1,973. The court noted that a concession was made before the Supreme Court that these amounts should be paid from the deposit in the civil court. Thus, Rs. 77,832.25 and Rs. 1,973 were ordered to be paid to the Income-tax Officer.
For other years, the Sub-judge found no proof of service of demand notices under Section 156. The High Court reviewed the documents and found that the notices were not properly served according to law. The court emphasized that service must be personal or on an authorized agent, as per Section 282 of the Act and relevant provisions of the Code of Civil Procedure. The documents did not show that notices were received by the opposite parties or their authorized agents. Consequently, the finding of no service of notices was upheld.
Conclusion:
The civil revision succeeded in part. The petitioner was entitled to recover Rs. 77,832.25 for 1962-63 and Rs. 1,973 for 1963-64 from the deposit in the civil court. The balance amount could not be recovered due to improper service of demand notices. Each party was to bear its own costs.
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1987 (12) TMI 8
Issues:
1. Challenge to orders passed by the Agricultural Income-tax Officer under section 37 of the Karnataka Agricultural Income-tax Act for the assessment years 1976-77 and 1977-78.
Detailed Analysis:
The judgment pertains to a challenge against the orders passed by the Agricultural Income-tax Officer under section 37 of the Karnataka Agricultural Income-tax Act for the assessment years 1976-77 and 1977-78. The respondent issued notices proposing to rectify the assessment orders citing specific reasons. The petitioner-assessee responded to these notices, but the respondent proceeded with the rectification despite the replies. The notices highlighted several mistakes in the assessment orders for the two years in question.
The first issue raised by the petitioner's counsel concerned the expenditure incurred during the assessment years, arguing that certain expenses were actually from previous years. The respondent added these expenses to the assessment for the current years without demonstrating that they were not incurred during the relevant assessment years. The court held that since the respondent failed to prove that these expenses were not from the years in question, the rectification regarding this item should be set aside.
The second issue involved the depreciation allowance on a power tiller. The respondent sought to rectify the depreciation allowance on the power tiller, claiming that it was mistakenly treated as a tractor. The court agreed with the respondent that a power tiller cannot be considered a tractor and confirmed the rectification order regarding this item.
The third issue revolved around the expenditure incurred under a specific section of the Act. The respondent contended that no reserve was created as required by the Act, leading to the disallowance of certain expenses. The petitioner argued that no reserve needed to be created for claiming such expenses and that the respondent misinterpreted the provisions. The court sided with the petitioner, stating that since the expenses were allowed in the original assessment orders and no reserve was required for claiming them, the rectification under this head was unjustified.
In conclusion, the court allowed the writ petitions in part, setting aside the orders of rectification except for the depreciation on the power tiller.
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1987 (12) TMI 7
Issues Involved:
The judgment addresses two main issues:
1. Whether revenue expenditure incurred by the assessee for new divisions is deductible as business expenditure.
2. Whether technical assistance fees paid by the assessee for setting up new divisions are deductible.
Issue 1: Revenue Expenditure for New Divisions:
The court referred to a previous decision involving the same assessee and concluded that the revenue expenditure for new divisions is deductible as business expenditure. The Appellate Assistant Commissioner allowed the deduction for engineering and technical assistance fees related to the previous year, stating that it qualifies as revenue expenditure. The Income-tax Appellate Tribunal upheld this decision, emphasizing that since the business activity remains the same, there is no need to treat the new divisions as a separate business. Therefore, the deduction for revenue expenditure was allowed.
Issue 2: Deductibility of Technical Assistance Fees:
The Income-tax Officer initially disallowed the technical assistance fees deduction, citing that production had not commenced during the previous year. However, the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal allowed the deduction, considering the technical assistance fees as part of the revenue expenditure. The court did not rely on previous judgments regarding technical know-how and instead focused on the fact that the new units were a continuation of the existing business. As a result, the deduction for technical assistance fees was also allowed in favor of the assessee.
This judgment clarifies that revenue expenditure for new divisions and technical assistance fees paid for setting up new divisions are deductible as business expenditure, as long as the activities are considered a continuation of the existing business. The court emphasized that the commencement of production in the previous year is not a determining factor for allowing such deductions.
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1987 (12) TMI 6
Issues:
1. Whether the sum received by the assessee on the sale of import entitlements represented a capital receipt for the income-tax assessment year 1974-75.
Analysis:
The judgment of the High Court of Andhra Pradesh pertains to a reference made by the Income-tax Appellate Tribunal regarding the income-tax assessment year 1974-75. The primary issue was whether the sum of Rs. 11,98,787 received by the assessee on the sale of import entitlements was to be considered a capital receipt. The assessee, a company engaged in various businesses including processing and sale of tobacco, ginning cotton, and dealing in pesticides, had sold import entitlements for cash, realizing the aforementioned sum. The Tribunal had accepted the assessee's contention that only a portion of the sum was liable to be assessed in its hands for the assessment year 1973-74, and that the remaining amount was not taxable until the following year.
The Revenue included the entire sum of Rs. 11,98,787 in the assessment for the year 1974-75, leading to an appeal by the assessee to the Commissioner of Income-tax (Appeals). The Commissioner accepted the assessee's contention and deleted a portion of the income from the assessment. Subsequently, both the Revenue and the assessee filed appeals to the Tribunal. The Revenue argued that the entire sum should be taxed, while the assessee claimed that a portion of the sum represented capital receipt and should not be taxed as business income.
The Tribunal rejected the Revenue's contention and accepted the assessee's plea that the sum of Rs. 5,15,140 was a realization of capital from the sale of import entitlements and not liable to be taxed. However, the High Court disagreed with the Tribunal's decision, stating that the import entitlements were directly related to the assessee's business activities. The Court cited various judgments supporting the view that cash realized by a businessman on the sale of import entitlements constituted income from business and not capital gain.
Therefore, the High Court ruled in favor of the Revenue, holding that the sum assessable should be Rs. 5,15,140 and not the entire amount of Rs. 11,98,787 as specified in the question referred to them. The Court emphasized that the sum realized from the sale of import entitlements was to be treated as income from business and not as a capital receipt, based on the direct connection between the entitlements and the assessee's business activities.
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1987 (12) TMI 5
Issues Involved:
1. Whether the value of the interest of the beneficiary in the trust should be included in the net wealth instead of the value of the corpus of the trust.
Detailed Analysis:
Issue 1: Inclusion of Beneficiary's Interest vs. Corpus in Net Wealth
Facts:
The case involves four trusts created by a settlor for his three grandchildren and a daughter. The trusts were created on different dates and for different beneficiaries, with the corpus to be handed over to the beneficiaries upon reaching a certain age (25 years for the grandchildren and 45 years for the daughter). The Wealth-tax Officer assessed the value of the entire trust fund held by the trustee, while the Appellate Assistant Commissioner directed that only the beneficial interest of the beneficiaries should be taxed.
Tribunal's Decision:
The Tribunal upheld the Appellate Assistant Commissioner's decision, stating that only the interest of the beneficiary in the trust should be included in the net wealth, not the corpus of the trust itself. The Tribunal concluded that the interest of the beneficiaries was contingent until they reached the stipulated age, and therefore, what could be included in the hands of the assessee would be the interest of the beneficiary in terms of the trust deed and not the corpus of the trust.
Revenue's Contention:
The Revenue argued that the Wealth-tax Officer assessed the entire trust fund on the trustee under section 21(4) of the Wealth-tax Act, as the beneficiaries did not possess any enforceable interest in the trust fund on the valuation dates. The Revenue claimed that the assessments were made on the trustee as such on the entire trust fund, and the Appellate Assistant Commissioner was in error in directing the assessment of the beneficial interest of the beneficiary.
Respondent's Contention:
The respondent-assessee argued that the interest of the beneficiaries was contingent and that only the value of such contingent interest could be assessed. The respondent contended that the share of the beneficiary was determinate and known, and hence, the assessment should be made under section 21(1) of the Act, not under section 21(4).
Court's Analysis:
The court referred to the provisions of section 21 of the Wealth-tax Act and the terms of the trust deeds. It was noted that the beneficiaries had no enforceable right against the trustee for the trust fund on the valuation dates, making their interest contingent. The court cited several judicial pronouncements, including the Supreme Court's observations in CWT v. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust, which clarified that assessments on trustees must be made under section 21.
The court concluded that on the valuation dates, the trustee was not holding the trust fund on behalf of the beneficiaries whose shares were determinate and known. Therefore, the provisions of section 21(4) were applicable, and the trustee had to be assessed on the entire value of the trust fund in the status of an "individual."
Conclusion:
The court held that the assessments made by the Wealth-tax Officer on the entire trust fund were correct. The question referred for consideration was answered in the negative, in favor of the Revenue and against the assessee. The parties were directed to bear their own costs.
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1987 (12) TMI 4
Issues involved: Interpretation of the term "salary" under section 17 of the Income-tax Act in relation to incentive bonus received by an employee.
Summary:
The petitioner, a development officer at the Life Insurance Corporation of India, received an incentive bonus of Rs. 9,536 during the relevant assessment year. He claimed a deduction of Rs. 4,768 as expenses incurred in earning the bonus. However, the Income-tax Officer, appellate authority, and Commissioner rejected the deduction, considering the bonus as part of the petitioner's salary for which standard deduction was allowed.
The petitioner argued that the incentive bonus should be treated as income from profession, allowing for the deduction of related expenses. Despite relying on a decision of the Income tax Appellate Tribunal, the authorities maintained that the bonus is indeed part of the salary, citing the broad definition of "salary" under section 17 of the Income-tax Act. The court referenced previous cases and the Payment of Wages Act, indicating that bonus is encompassed within the definition of wages.
Ultimately, the court dismissed the writ petition, emphasizing that the petitioner received the incentive bonus while in employment, aligning with the definition of "salary" under the Income-tax Act. The petitioner's contention was deemed without merit, leading to the rejection of the claim for deduction. No costs were awarded in this judgment.
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1987 (12) TMI 3
Tax collected without the authority of law. Indeed, the appellant had to pay the tax in view of the notices which were without jurisdiction - assessment was made was without jurisdiction. In the premises, it is manifest that the respondents had no authority to retain the money collected without the authority of law and as such the money was liable to be refunded - in an application under article 226 of the Constitution, the court should have directed refund.
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1987 (12) TMI 2
Issues Involved:
1. Jurisdiction of the court to try the suit.
2. Applicability of the provisions of the Income-tax Act, 1961, or the Indian Income-tax Act, 1922, to the claim.
3. Entitlement to interest on refunds of income-tax and excess profits tax.
4. Maintainability of a civil suit for recovery of interest.
Detailed Analysis:
Issue 1: Jurisdiction of the Court to Try the Suit
The High Court framed issue No. 4 to determine whether the court had jurisdiction to try the suit. The learned single judge held that the civil court had no jurisdiction to substitute its discretion to grant interest in place of the discretion vested in the Commissioner under section 66(7) of the 1922 Act. The judge stated, "the civil court in this suit has no power to override him and grant interest." Consequently, the suit was dismissed on this ground.
Issue 2: Applicability of the Provisions of the Income-tax Act, 1961, or the Indian Income-tax Act, 1922
The High Court also framed issue No. 6 to decide whether the claim was governed by the provisions of the 1961 Act or the 1922 Act. The learned single judge initially held that the case was governed by the provisions of the old Act (1922 Act), stating, "the rights of the parties will, therefore, be governed by the provisions of the old Act and it cannot be said that the assessment had been completed." However, the Division Bench of the High Court reversed this finding, holding that the provisions of the 1922 Act did not govern the claim. The appellate finding was deemed sufficient to support the dismissal of the suit.
Issue 3: Entitlement to Interest on Refunds of Income-tax and Excess Profits Tax
The plaintiff-assessee claimed interest on refunds of income-tax and excess profits tax under section 66(7) of the 1922 Act. The Division Bench of the High Court held that the claim for interest on the refund of income-tax did not survive under the 1961 Act. The Supreme Court affirmed this view, stating that "an assessment would be 'completed assessment' within section 297(2)(i) if the Income-tax Officer had passed the order of assessment prior to the coming into force of the 1961 Act." Therefore, the claim for Rs. 1,17,358.87 was rightly rejected.
However, the claim for Rs. 12,282.11 representing interest on the refund of excess profits tax was considered separately. The Supreme Court noted that section 21 of the Excess Profits Tax Act, 1940, incorporated section 66 of the 1922 Act, and thus, the claim for interest on excess profits tax could survive. The Court stated, "the distinctive nature of this part of the suit claim pertaining to the interest on excess profits tax has not been specifically dealt with by the High Court."
Issue 4: Maintainability of a Civil Suit for Recovery of Interest
The maintainability of the civil suit was questioned, particularly in light of the exclusionary clauses in the statute. The Supreme Court discussed the general principle that where a right and remedy are created by statute, the civil court's jurisdiction is impliedly barred. However, the Court also noted that the appellants could have recourse to proceedings under article 226 of the Constitution if the civil suit was not maintainable. To avoid further litigation, the Supreme Court decided to grant relief in these proceedings without pronouncing on the maintainability of the suit.
Conclusion:
The Supreme Court upheld the dismissal of the claim for Rs. 1,17,358.87 as interest on the refund of income-tax but allowed the claim for Rs. 12,282.11 as interest on the refund of excess profits tax. The Court directed the respondent to pay the appellants Rs. 12,282.11 with pendente lite and further interest at 6% per annum from the date of the institution of the suit till realization. The appellants were entitled to costs in proportion to their success in the suit, while the respondent was left to bear its own costs throughout.
Judgment:
- Appeal allowed in part.
- Claim for Rs. 1,17,358.87 dismissed.
- Claim for Rs. 12,282.11 allowed with interest and costs.
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1987 (12) TMI 1
Whether, the income derived by the assessee-company by way of lease rent from the letting out of its assets during the years ended 31-12-1959, 31-12-1960, 31-12-1961 and 31-12-1962, is assessable to tax under the head 'Profits and gains of business' or under the head 'Income from other sources'
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9911796707
