| Case ID |
0073c593-a0b1-45fe-97de-faf5c38941c5 |
| Body |
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| Case Number |
WRIT PETITION No. 1662 OF 1964 |
| Decision Date |
Feb 01, 1968 |
| Hearing Date |
|
| Decision |
The case revolves around the imposition of penal interest on the petitioner, South India Flour Mills (P.) Ltd., for the assessment year 1959-60 under the Income-tax Act, 1922. The petitioner contested the penal interest imposed, which was dismissed by the Commissioner on a technicality, stating that a revision under section 33A(2) would not lie. However, the Madras High Court held that the imposition of penal interest was not part of the assessment process under section 23, and thus no appeal could be made under section 30 of the Act. The court ruled that penal interest is a penalty for under-assessment and should not be considered part of total income. Consequently, the court allowed the petition, directing the Commissioner to reconsider the revision petition on its merits. |
| Summary |
In the case of South India Flour Mills (P.) Ltd. vs. Central Board of Direct Taxes, addressed by the Madras High Court, the court examined the legality of penal interest imposed under the Income-tax Act, 1922. The petitioner, representing a private limited company, challenged a penal interest charge of Rs. 9,176.09 for the assessment year 1959-60. The core issue was whether the penal interest constituted part of the income assessment process, which would allow for an appeal. The court concluded that penal interest is a penalty related to under-assessment and does not fall within the purview of appealable orders under section 30. This ruling underscores the importance of clarity in tax law regarding penalties and appeals, ensuring that entities like South India Flour Mills understand their rights under tax regulations. The decision is significant for tax law practitioners and businesses alike, as it highlights procedural nuances in challenging tax-related penalties. |
| Court |
Madras High Court
|
| Entities Involved |
Not available
|
| Judges |
Veeraswami, J.,
Ramaprasada Rao, J.
|
| Lawyers |
K. Srinivasan,
D.S. Meenakshisundaram,
K.C. Rajappa,
V. Balasubrahmanyan,
J. Jayaraman
|
| Petitioners |
South India Flour Mills (P.) Ltd.
|
| Respondents |
Central Board of Direct Taxes
|
| Citations |
1968 SLD 154,
(1968) 70 ITR 863
|
| Other Citations |
Pt. Dep. Sharm v. CIT [1953] 23 ITR 226 (All.)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
264,
215,
33A(2),
18A(6),
30
|