| Case ID |
0b130971-532d-4cf0-a6bf-d7578933d124 |
| Body |
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| Case Number |
11976 |
| Decision Date |
|
| Hearing Date |
Jun 24, 1932 |
| Decision |
The Allahabad High Court held that the Income Tax Officer (ITO) at Benares had the jurisdiction to call for the submission of income returns from all branches of the assessee's business, including those in Jaunpur and Piparia. The court determined that Section 64(4) of the Income-tax Act, 1961 does not conflict with this jurisdiction. Furthermore, the court stated that a return which does not comply with Section 22(2), intending to cover the total income but omitting certain branches, is considered incomplete and thus not a valid return under the law. Consequently, Section 23(4) permits the ITO to make a best judgment assessment in such cases. The court also found no inconsistency between Sections 23(2) and 23(4) of the Indian Income-tax Act, 1922, thereby upholding the revenue's position and dismissing the applicant's challenge. |
| Summary |
In the landmark case of Abhey Ram Chunni Lal vs. Allahabad High Court, the critical issue revolved around the jurisdiction of the Income Tax Officer (ITO) at Benares to demand income tax returns from all branches of an assessee’s business, including those located in Jaunpur and Piparia. The petitioner, Abhey Ram Chunni Lal, failed to include income details from these branches in his submitted tax return, which initially only covered the Benares offices. Despite being granted additional time to comply, the petitioner did not furnish the complete return, leading the ITO to proceed with a best judgment assessment under Section 23(4) of the Indian Income-tax Act, 1922.
The Allahabad High Court, presided over by Justices Mukerji and Bennet, examined whether there was any contradiction between Sections 23(2) and 23(4) of the 1922 Act. The court affirmed that Section 23(4) empowers the ITO to make a best judgment assessment when a bona fide return with omissions is submitted. This decision underscores the authority of tax officers to ensure comprehensive disclosure of income across all business branches, reinforcing the integrity of tax assessments.
The case also referenced prior judgments, including Lachhman Prasad Babu Ram, In re ILR 47 All. 631 and 23 ALJ 379, to support the jurisdictional claims. Lawyers S.K. Dar, Gopi Nath Kunzru, and U.S. Bajpai represented the parties involved. The court ultimately ruled in favor of the revenue, emphasizing the necessity for complete and accurate tax returns and validating the ITO’s jurisdictional reach. This decision highlights the importance of compliance with tax laws and the judiciary's role in upholding fiscal responsibilities, making it a pivotal reference for future income tax litigation and enforcement actions. Key legal principles established in this case continue to influence the interpretation of tax legislation, ensuring that taxpayers provide comprehensive income details across all operational branches to facilitate accurate tax assessments and uphold the rule of law in financial matters. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
MUKERJI, JJ.,
BENNET, JJ.
|
| Lawyers |
S.K. Dar,
Gopi Nath Kunzru,
U.S. Bajpai
|
| Petitioners |
Abhey Ram Chunni Lal
|
| Respondents |
Not available
|
| Citations |
1933 SLD 48,
(1933) 1 ITR 126
|
| Other Citations |
Lachhman Prasad Babu Ram, In re ILR 47 All. 631,
23 ALJ 379
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
144,
124,
23(4),
64(1)
|