| Case ID |
2ce0b3aa-7d43-4f9c-a8ec-43a144d865e4 |
| Body |
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| Case Number |
CIVIL APPEAL No. 139 OF 1962 |
| Decision Date |
Nov 14, 1962 |
| Hearing Date |
|
| Decision |
The Supreme Court upheld the decision of the High Court, affirming that the Income-tax Officer was justified in recalling the rebate allowed on dividends declared by the Ahmedabad Manufacturing and Calico Printing Co. Ltd. The Court found that the provisions of section 35(10) of the Income Tax Act, 1922, could be applied retrospectively to assessments made prior to the enactment of the sub-section, provided the dividends were declared from profits on which the rebate had been granted. The ruling emphasized that the Income-tax Act allows for the rectification of mistakes and that the retrospective application of tax laws is permissible under specific circumstances, particularly to prevent misuse of tax benefits by companies. The Court also noted that the objections raised by the assessee regarding the lack of retrospective application were dismissed, reinforcing the authority of the Income-tax Officer to reassess tax liabilities based on newly introduced provisions. |
| Summary |
The case of Ahmedabad Manufacturing and Calico Printing Co. Ltd v. S.G. Mehta revolves around the interpretation of section 35(10) of the Income Tax Act, 1922, which addresses the rectification of mistakes concerning tax rebates on dividends. The Supreme Court of India examined whether the Income-tax Officer could withdraw a tax rebate that had been granted in earlier assessments when dividends were declared from the profits on which the rebate had been allowed. The Court ruled that the provisions of section 35(10) could operate retrospectively, thereby allowing the Income-tax Officer to recall the rebate. This decision is significant in the landscape of tax law, highlighting the ability of tax authorities to rectify past assessments in light of new legislative provisions. The ruling also reinforces the principle that tax laws can be applied retrospectively to prevent the exploitation of tax benefits. This case serves as a crucial reference for understanding the balance between taxpayer rights and the powers of tax authorities in ensuring compliance with the law. |
| Court |
Supreme Court of India
|
| Entities Involved |
|
| Judges |
S.K. Das,
J.L. Kapur,
A.K. Sarkar,
M. Hidayatullah,
Raghubar Dayal
|
| Lawyers |
R.J. Kolah,
J.B. Dadachanji,
O.C. Mathur,
Ravinder Narain,
Gopal Singh,
R.N. Sachthey
|
| Petitioners |
Ahmedabad Manufacturing and Calico Printing Co. Ltd
|
| Respondents |
S.G. Mehta
|
| Citations |
1963 SLD 253,
(1963) 48 ITR 154,
(1970) 21 TAX 21
|
| Other Citations |
CIT v. Khemchand Ramdas [1938] 6 ITR 414 (PC),
New Shorrock Spinning & Manufacturing Co. Ltd. v. N. U. Raval, ITO [1959] 37 ITR 41 (Bom.),
Pardo v. Bingham [1869] LR 4 Ch. App. 735,
Reid v. Reid [1986] 31 Ch. D. 402,
ITO v. Habibullah [1962] 44 ITR 809 (SC),
Second Additional ITO v. Atmala Nagaraj [1962] 46 ITR 609 (SC)
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
35(10)
|