| Case ID |
3d6e0b7b-3301-4255-9cb4-cbd379b5a015 |
| Body |
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| Case Number |
IT REFERENCE No. 24 OF 1970 |
| Decision Date |
Mar 24, 1971 |
| Hearing Date |
|
| Decision |
The court held that the Income-tax Officer (ITO), having assessed interest on an accrual basis in earlier years, could not switch to a receipt basis for the assessment year 1962-63. The ITO had the option to either wait until the interest was received or assess it on an accrual basis as he did in the previous years. Since he failed to reopen previous assessments within the limitation period, he could not change the method of accounting to suit his own default. The court emphasized the principle that no income should be doubly taxed and upheld the assessee's claim for taxation on an accrual basis. |
| Summary |
In the landmark case of Rattan Chand Dhawan v. Commissioner of Income Tax, the Punjab and Haryana High Court addressed critical issues regarding the method of accounting under the Income-tax Act. The case revolved around whether interest income could be taxed on a receipt basis after having been assessed on an accrual basis in prior years. The court scrutinized the actions of the Income-tax Officer, highlighting the importance of consistency in accounting methods and the legal principle that income should not be taxed twice. This decision is significant for taxpayers and legal practitioners as it reinforces the necessity for tax authorities to adhere to established accounting methods once chosen. The case also illustrates the complexities surrounding tax assessments and the rights of assessees, making it a pivotal reference for future cases involving similar disputes. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Not available
|
| Judges |
D.K. Mahajan,
Gopal Singh
|
| Lawyers |
B.K. Jhingan for the Applicant,
D.N. Awasthy for the Respondent,
B.S. Gupta for the Respondent
|
| Petitioners |
Rattan Chand Dhawan
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1973 SLD 543,
(1973) 87 ITR 660
|
| Other Citations |
CIT v. Jug Sah Muni Lal Sah [1939] 7 ITR 522 (Pat.),
Bansilal Abirchand v. CIT [1928] 3 ITC 57 (J.C. at Nag.),
CIT v. Chengalvaraya Chetty [1925] 2 ITC 14 (Mad.),
Subramanyam Chetty v. CIT [1927] 2 ITC 365 (Mad.)(FB)
|
| Laws Involved |
Income-tax Act, 1961,
Income-tax Act, 1922
|
| Sections |
145,
13
|