| Case ID |
f9d7b41f-e0e4-457a-a2fa-73d6c70d0c1a |
| Body |
View case body. Login to View |
| Case Number |
Case Referred No.41 of 1980 |
| Decision Date |
Jun 19, 1992 |
| Hearing Date |
|
| Decision |
The Court held that the Income Tax Officer (ITO) cannot assess both the unregistered firm and its partners for the same income. The provisions of Section 4 of the Income Tax Act, 1961, were interpreted to maintain that the charging section must be understood in light of the machinery provisions. The ITO has the option to assess either the unregistered firm or the individual partners, but not both. Thus, the assessment made on the unregistered firm after assessing the partners was ruled invalid. The ruling emphasized the importance of avoiding double taxation unless explicitly provided by the statute. |
| Summary |
This case revolves around the interpretation of the Income Tax Act, 1961, specifically Section 4, which governs the charging of income tax. The Supreme Court examined whether the Income Tax Officer (ITO) had the authority to assess both an unregistered firm and its partners for the same income. The ruling clarified that the ITO must choose one entity for assessment to avoid double taxation, a principle that is critical in tax law. The judgment underscored the necessity of adhering to the provisions of the Act while ensuring that the intent of the legislature is respected. This case is significant for tax professionals as it establishes a clear precedent regarding the assessment of income for unregistered firms and their partners, ensuring clarity and consistency in the application of tax laws. |
| Court |
Supreme Court
|
| Entities Involved |
COMMISSIONER OF INCOME TAX,
B.R. CONSTRUCTIONS,
PARKE DAVIS & COMPANY LTD., KARACHI,
MANZAR HUSSAIN
|
| Judges |
SYED SHAH MUHAMMAD QUADRI,
N.D. PATNAIK,
PARVATHA RAO
|
| Lawyers |
S.R. Ashok,
Y. Ratnakar
|
| Petitioners |
COMMISSIONER OF INCOME TAX
|
| Respondents |
MANZAR HUSSAIN,
B.R. CONSTRUCTIONS,
PARKE DAVIS & COMPANY LTD., KARACHI
|
| Citations |
1994 SLD 25,
1994 PTD 273,
(1993) 202 ITR 222
|
| Other Citations |
Atchaiah v. ITO (1979) 116 ITR 675,
Choudry Bros. v. CIT (1986) 158 ITR 224 (AP),
Mahendra Kumar Agarwala v. ITO (1976) 103 ITR 688 (Pat.),
Rodamal Lalchand v. CIT (1977) 109 ITR 7 (P&H),
Punjab Cloth Stores v. CIT (1980) 121 ITR 604 (Delhi)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
4
|