| Case ID |
d7d29666-56b7-4d34-83f7-9f1753262ce6 |
| Body |
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| Case Number |
C.W. No. 882 OF 1973 |
| Decision Date |
May 19, 1978 |
| Hearing Date |
|
| Decision |
The High Court quashed the notices issued under section 148 read with section 147 of the Income-tax Act, 1961, stating that the Income Tax Officer (ITO) did not have valid reasons to believe that income had escaped assessment. The court held that the ITO's reliance on audit reports did not constitute sufficient grounds as required under the law. The belief must be based on primary facts, not mere inferences. The court emphasized that the grounds for belief must exist at the time of issuing the notice, not created during the assessment. The case was decided in favor of the petitioner, affirming that the ITO's actions were illegal and without jurisdiction, thus protecting the rights of the taxpayer. |
| Summary |
In the case of Dwarka Dass and Brothers vs. Income Tax Officer, the Delhi High Court addressed the legal principles surrounding the reopening of assessments under the Income-tax Act, 1961. The petitioner, a partnership firm, challenged the notices issued by the ITO under sections 147 and 148, which alleged that income had escaped assessment for the assessment year 1962-63. The court underscored the necessity for the ITO to have concrete reasons to believe that the taxpayer had failed to disclose all material facts necessary for a proper assessment. The ruling highlighted that mere audit objections or subsequent investigations do not suffice as grounds for reassessment. The judgment reinforced taxpayer rights by affirming that the ITO cannot issue notices based on vague suspicions or changed opinions about previously accepted facts. This case serves as a significant reference for understanding the safeguards against arbitrary tax assessments and the standards required for the ITO's actions under the Income-tax Act. |
| Court |
Delhi High Court
|
| Entities Involved |
Not available
|
| Judges |
Prakash Narain, J
|
| Lawyers |
G.C. Sharma,
D.K. Jain,
Randhir Chawla,
G.S. Bawa,
B.N. KIRPAL,
Mohan Lal Verma
|
| Petitioners |
Dwarka Dass and Brothers
|
| Respondents |
Income Tax Officer
|
| Citations |
1979 SLD 1116,
(1979) 118 ITR 958
|
| Other Citations |
Chhugamal Rajpal v. S.P. Chaliah [1971] 79 ITR 603 (SC),
ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC),
ITO v. Mahadeo Lal Tulsian [1977] 110 ITR 786 (Cal.),
M. Varadarajulu Naidu v. CIT [1978] 111 ITR 301 (Mad.),
ITO v. Mahadeo Lal Tulsyan [1978] 111 ITR 25 (Cal.),
Rai Singh Deb Singh Bist v. Union of India [1970] 77 ITR 802 (Delhi),
Union of India v. Rai Singh Deb Singh Bist [1973] 88 ITR 200 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
147,
148,
142(1),
143(3)
|