| Case ID |
f958cb9c-55ac-4cf7-9369-1a6100815be0 |
| Body |
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| Case Number |
CIVIL MISC. WRIT No. 1591 OF 1974 |
| Decision Date |
Nov 10, 1976 |
| Hearing Date |
|
| Decision |
The Allahabad High Court ruled that the circular issued by the Central Board of Direct Taxes constitutes valid information under Section 147(b) of the Income-tax Act. The court held that the Income-tax Officer (ITO) could reopen the assessment if he had reason to believe that income had escaped assessment due to misapplication of law. The petitioner's challenge to the notices issued under Section 148 was dismissed, affirming that a circular on a point of law can be considered information for reassessment purposes. |
| Summary |
In the case of Raj Kumar Shrawan Kumar v. Central Board of Direct Taxes, the Allahabad High Court addressed the issue of whether a circular from the Central Board of Direct Taxes can serve as valid information for reopening income tax assessments under Section 147 of the Income-tax Act, 1961. The petitioner contested the Income-tax Officer's authority to reassess based on a circular that suggested disallowing deductions for bonus reserves. The court emphasized that such circulars, being derived from a knowledgeable authority, are admissible as information that could lead the ITO to reasonably believe that income had escaped taxation. The ruling reinforces the principle that changes in legal interpretation by tax authorities must be taken seriously, providing clarity on the limits of reassessment powers in taxation law. This case is significant for taxpayers and legal practitioners as it outlines the procedural nuances of tax law and the implications of administrative guidance on tax assessments. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
C.S.P. Singh,
R.M. Sahai
|
| Lawyers |
Shanti Bhushan,
R.K. Gulati,
Deokinandan
|
| Petitioners |
Raj Kumar Shrawan Kumar
|
| Respondents |
Central Board of Direct Taxes
|
| Citations |
1977 SLD 1054,
(1977) 107 ITR 570
|
| Other Citations |
Bhimraj Panna Lal v. CIT [1957] 32 ITR 289 (Pat.),
CIT v. Smt. H.H. Chand Kanwarji [1972] 84 ITR 584 (Delhi),
Kasturbhai Lalbhai v. R.K. Malhotra, ITO [1971] 80 ITR 188 (Guj.),
Muthukrishna Reddiar v. CIT [1973] 90 ITR 503(Ker.),
Vashist Bhargava v. ITO [1975] 99 ITR 148 (Delhi),
Maharaj Kumar Kamal Singh v. CIT [1959] 35 ITR 1(SC),
CWT v. Imperial Tobacco Co. of India Ltd. [1966] 61 ITR 461 (SC),
Jaganmohan Rao v. CIT [1970] 75 ITR 373(SC),
Kalyanji Mavji & Co. v. CIT [1975] 102 ITR 287 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
147
|