| Case ID |
2de06f11-de87-4d87-82bb-9f84d2e3fdca |
| Body |
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| Case Number |
TAX CASE No. 207 OF 1978 REFERENCE No. 148 OF 1978 |
| Decision Date |
Oct 19, 1983 |
| Hearing Date |
|
| Decision |
The Tribunal held that the reopening of the assessment was invalid as the Income Tax Officer (ITO) did not possess adequate information leading to a reasonable belief that chargeable profits had escaped assessment. The ITO's action was based on a change of opinion rather than substantive new information. The case established that the essential requirement for reopening an assessment under section 8(b) is that the ITO must have information subsequent to the original assessment that indicates chargeable profits have escaped assessment. The absence of such information in this case led to the conclusion that the reassessment was not valid. |
| Summary |
In the landmark case of Commissioner of Income Tax v. India Motor Parts & Accessories Ltd., the Madras High Court addressed critical issues regarding the reopening of assessments under the Companies (Profits) Surtax Act, 1964. The case focused on section 8, which deals with profits escaping assessment. The court ruled that the Income Tax Officer (ITO) must have concrete information indicating that chargeable profits have escaped assessment for reassessment to be valid. The court emphasized that a mere change of opinion does not justify reopening an assessment. This decision is pivotal in understanding the limitations placed on tax authorities regarding reassessments and reinforces the principle that assessments can only be revisited when new, relevant information is available. This case serves as a significant reference in tax law, especially concerning the rights of taxpayers against arbitrary actions by tax authorities. The ruling highlights the importance of due process and substantiates the legal framework protecting taxpayers from unwarranted tax assessments. |
| Court |
Madras High Court
|
| Entities Involved |
Not available
|
| Judges |
Ramanujam,
Ratnam
|
| Lawyers |
Jayaraman and Mrs. Nalini Chidambaram for the Applicant,
S. A. Balasubramanian for the Respondent
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
India Motor Parts & Accessories Ltd.
|
| Citations |
1985 SLD 1060,
(1985) 153 ITR 98
|
| Other Citations |
CIT v. Rao Thakur Narayan Singh [1965] 56 ITR 234 (SC),
Indian & Eastern Newspaper Society v. CIT [1979] 119 ITR 996 (SC),
Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287 (SC),
Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1 (SC),
Salem Provident Fund Society Ltd. v. CIT [1961] 42 ITR 547 (Mad.),
United India Fire & General Insurance Co. Ltd. v. CIT [1985] 153 ITR 81(Mad.)
|
| Laws Involved |
Companies (Profits) Surtax Act, 1964
|
| Sections |
8
|