TMI Blog1979 (2) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that the instructions contained in the Circular of the Central Board of Revenue which were in force on the first day of the assessment year will be applicable and the ITO is bound by it, even though he passed the assessment order subsequent to the withdrawal of the said circular ?" The assessee is an individual and a partner in the firm of M/s. India Sea Foods, Cochin. He is also a partner in M/s. ' Beeyems ' in which his wife Mrs. Susanna Edward is another partner. The assessment year with which we are concerned is 1971-72. The accounting year is the year ended December 31, 1970. For the assessment year in question, the business of M/s. " Beeyems " ended in a loss of Rs. 30,292 for the assessee as well as for his wife, Mrs. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the above decision of the Division Bench. From 1944, there was in operation a circular of the Board of Revenue, issued under s. 5(8) of the 1922 Act, corresponding to s. 119 of the 1961 Act. That circular, in brief, allowed the loss suffered by a spouse to be set off against the income of the other spouse. The circular was withdrawn on April 6, 1972, that is, after the expiry of the assessment year with which we are concerned. The assessment was, however, completed only on March 12, 1974, after the withdrawal of the circular. Under these circumstances, the Tribunal took the view that although the circular had been withdrawn at the time when the assessment was made, it was in operation at the commencement of the assessment year, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections 143, 144, 147, 148, 154, 155, 210, 271 and 273 or otherwise), general or special orders in respect of any class of incomes or class of cases, setting forth directions or instructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other income-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information; (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-s. (2) of s. 119 of the Act. In regard to the latter type of circulars affecting the rights of assessees, we are of the opinion that despite the power to recall or withdraw the circulars, the assessee's right to have the assessments effected or carried out in accordance with the circulars, cannot be prejudicially affected by the recall or the withdrawal of the circulars. This, we gather, is the effect of the decisions of the Supreme Court which we may briefly notice. In Navnit Lal C. Javeri v. K. K. Son, AAC [1965] 56 ITR 198, the Supreme Court had occasion to examine the statutory basis and background of the circulars issued by the Board of Revenue under the provisions of the I.T. Act, and the scope and the effect of such circulars. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief of the new provision.' The directions given in that circular clearly deviated from the provisions of the Act, yet this court held that the circular was binding on the Income-tax Officer." A Division Bench of this court in Rajarajeswari Weaving Mills v. ITO [1978] 113 ITR 405 (Ker) had again examined the force and the effect of the circulars issued under s. 119 of the 1961 Act. No final opinion was expressed on the question, as it was unnecessary to do so on the actual facts of the case considered by the Division Bench, where the order of the Commissioner with respect to which the question of law was referred, was prior to the issuance of the circular and was unaffected by it. But this court noticed the succinct statement of law rega ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
