TMI Blog1993 (8) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... fact in holding that, (i) it cannot be said that there was any information which would justify the reopening of the assessment ; (ii) it appears to be only a change of opinion on the part of the Income-tax Officer ; (iii) no income had escaped assessment and for this reason also the reopening of the assessment cannot be sustained ; (iv) the reopening of the assessment is not legally sustainable ? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction for gratuity at the rate of 8 per cent. of the salary ?" The respondent/assessee is a public limited company. We are concerned with the assessment year 1975-76. The assessee publishes Malayalam daily and also periodicals. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reopening of the assessment. He also opined that the matter is governed by section 40A(7) of the Income-tax Act, and deduction was allowable. The order of the Commissioner of Income-tax (Appeals) is dated October 8, 1982 (annexure-B). In further appeal by the Revenue, the Appellate Tribunal held that the gratuity trust was created in the year 1969 and the application for approval of the gratuity fund was filed before the Income-tax Officer on December 15, 1969. The instrument of trust and copy of the rules were also filed before the Income-tax Officer along with a covering letter dated March 11, 1970, and a copy of the application for sanction of initial contribution of 8.5 per cent. was filed before the Commissioner of Income-tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income has escaped assessment and the reopening was not valid. Accordingly, the appeal filed by the Revenue was dismissed. It is, thereafter, at the instance of the Revenue that the questions of law, formulated hereinabove, have been referred for the decision of this court. We heard counsel for the Revenue, Mr. P. K. R. Menon, as also counsel for the respondent/assessee. Both sides placed reliance on the observations of the Supreme Court in Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996. In particular, counsel for the Revenue placed reliance on the Bench decision of this court in United Mercantile Co. Ltd. v. CIT [1967] 64 ITR 218, and the decision of the Supreme Court in Anandji Haridas and Co. (P.) Ltd. v. S. P. Kushar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acknowledged on December 17, 1969, and that the original deed was filed before the Income-tax Officer with the covering letter dated March 11, 1970, which was acknowledged on March 16, 1970. It is also stated in the letter that the copy of the application for sanction of initial contribution at 8.5 per cent. made before the Commissioner of Income-tax on November 5, 1973, was also filed before the Income-tax Officer and that the contribution to the approved gratuity fund was being considered by the Income-tax Officer year after year from 1970-71. These facts are not disputed by the Department." In the light of the above facts, it is clear that the entire materials were before the Income-tax Officer when he made the original assessment. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me materials and so the officer was incompetent to reopen the assessment. (See Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 at page 1004). Even on the merits, the applicability of rule 103 will arise only when deduction had to be allowed in conformity with section 36(1)(v) of the Income-tax Act. After the introduction of section 40A of the Act, rule 103 of the Income-tax Rules will have no application. The claim for deduction has to be worked out solely under section 40A(7) of the Act which came into effect from April 1, 1973, by the retrospective effect given to Act 25 of 1975. The Appellate Tribunal held so in paragraph 5,4 of the order. The Department has no case that the assessee has not satisfied the conditions 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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