| Case ID |
2e4cab49-eaed-4644-b216-99ba3b6bea52 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
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| Hearing Date |
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| Decision |
The court held that the reassessment proceedings initiated by the Income Tax Officer (ITO) under section 147(b) of the Income-tax Act, 1961, were without jurisdiction and thus quashed. The ITO had originally allowed the petitioner's claim for deduction based on the approval of the institution to which a donation was made. However, the approval was later withdrawn with retrospective effect. The court ruled that the retrospective cancellation of the approval was invalid and did not provide a sound basis for the belief that income chargeable to tax had escaped assessment. Therefore, the reopening of the assessment was deemed invalid. |
| Summary |
In the case of Seksaria Biswan Sugar Factory Ltd. v. Inspecting Assistant Commissioner, the Bombay High Court examined the validity of reassessment proceedings initiated by the Income Tax Officer (ITO) under section 147(b) of the Income-tax Act, 1961. The core issue revolved around the cancellation of approval for a charitable institution to which the petitioner made a significant donation. The ITO had initially allowed the deduction based on this approval, but later attempted to reassess the case after the approval was revoked with retrospective effect. The court concluded that the retrospective withdrawal of approval did not furnish a valid basis for the ITO's belief that the petitioner's income had escaped assessment, thus quashing the reassessment. This case underscores the importance of valid grounds for tax reassessment and the implications of retrospective legislative actions in tax law. |
| Court |
Bombay High Court
|
| Entities Involved |
K.M. Scientific Research Centre
|
| Judges |
T.D. Sugla
|
| Lawyers |
Y.R. Trivedi,
Mrs. Usha Dalal,
Dr. V. Balasubramanian,
J.P. Deodhar,
Miss S.G. Shah
|
| Petitioners |
Seksaria Biswan Sugar Factory Ltd.
|
| Respondents |
Inspecting Assistant Commissioner
|
| Citations |
1990 SLD 1980,
(1990) 184 ITR 123
|
| Other Citations |
ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC),
ITO v. M.C. Ponnoose [1970] 75 ITR 174 (SC),
Bakul Cashew Co. v. STO [1986] 159 ITR 565 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
147(b),
35(1)(ii)
|