| Case ID |
16a3809b-1c9c-4aff-9514-ed8c0468e8e2 |
| Body |
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| Case Number |
IT REFERRED CASE Nos. 118 TO 120 OF 1974, 86, 113 |
| Decision Date |
Apr 20, 1978 |
| Hearing Date |
|
| Decision |
The Karnataka High Court held that the order made under sections 215, 216, or 217 of the Income-tax Act 1961 does not form part of the order of assessment and must be passed only after a regular assessment is made. The Commissioner had no jurisdiction under section 263 to levy interest after the assessment order was silent on it, leading to a premature action. The Tribunal ruled that the Commissioner overstepped his authority by directing the Income-tax Officer (ITO) to levy interest under section 217 when no express order had been made in that regard. The court emphasized that the omission by the ITO to mention interest does not imply a waiver of such interest, and the Commissioner could not act based on a non-existent order. This decision favored the assessee, reaffirming the need for a clear order from the ITO regarding interest under the Income-tax Act. |
| Summary |
In the landmark case of the Karnataka High Court, the core issue revolved around the powers of the Commissioner of Income Tax under section 263 of the Income-tax Act, 1961. The court analyzed the implications of sections 215, 216, and 217 related to advance tax and penal interest. The High Court concluded that the ITO's failure to mention interest in the assessment order did not constitute a waiver of interest. The ruling highlighted the quasi-judicial nature of the proceedings under these sections, asserting that the Commissioner could only act if there was an existing order that was erroneous and prejudicial to the revenue. The decision reaffirmed the necessity for procedural clarity in tax assessments, emphasizing that interest orders must follow a regular assessment. This case is significant for tax professionals and legal practitioners, as it clarifies the limitations of the Commissioner's powers and the obligations of the ITO in tax matters. |
| Court |
Karnataka High Court
|
| Entities Involved |
Not available
|
| Judges |
E.S. Venkataramaiah,
M.K. Srinivasa Iyengar
|
| Lawyers |
S.R. Rajasekharamurthy,
S.P. Bhat,
K. Srinivasan
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Executors of The Estate of Late H.H. Rajkuverba Dowager Maharani Saheb of Gondal
|
| Citations |
1978 SLD 874 = (1978) 115 ITR 301
|
| Other Citations |
Ganpat Ladha v. Sashikant Vishnu Shinde AIR 1978 SC 955,
Gurusahai Saigal v. CIT [1963] 48 ITR (SC) 1,
Haji Lal Mohd. Biri Works v. State of Uttar Pradesh [1973] 32 STC 496 (SC),
IRC v. Hood Barrs [1961] 39 TC 683 (HL),
Lata Mangeshkar v. Union of India [1959] 36 ITR 527 (Bom.),
S.A.L. Narayan Row v. Ishwarlal Bhagwandas [1965] 57 ITR 149 (SC),
Sinha Govindji v. Deputy Chief Controller of Imports and Exports [1962] 1 SCR 540 (SC),
Chockalingam and Meyyappan v. CIT [1963] 48 ITR (SC) 34,
CIT v. Cochin-Malabar Estates Ltd. [1974] 97 ITR 466 (Ker.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
215,
216,
217,
263
|