| Case ID |
ff2028c7-8feb-460e-8add-9dbe0fc5a7d6 |
| Body |
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| Case Number |
F.M.A. NO. 255 OF 1993 |
| Decision Date |
Jul 11, 2003 |
| Hearing Date |
|
| Decision |
The court upheld the notices issued for reopening assessments under section 148 of the Income-tax Act, 1961. It was determined that the assessee company had not made a full and true disclosure of all material facts regarding the commission paid to its sole selling agency. The court ruled that the Income Tax Officer had sufficient grounds to believe that income had escaped assessment based on the relationships between the parties involved and the nature of the transactions. The appeal was allowed, and the order of the Single Judge was set aside, thereby dismissing the writ petition. |
| Summary |
This case revolves around the reopening of income tax assessments for the assessment years 1968-69 to 1973-74 concerning the payment of commission to a sole selling agency. The Income Tax Officer (ITO) issued notices under section 148, alleging that the commission payments were not scrutinized properly and constituted an extension of the managing director's own establishment, intended to divert income. The court examined whether the assessee had disclosed all material facts fully and truly. The ruling emphasized the importance of true disclosure in tax assessments and clarified that the mere production of agreements does not suffice. The court also referenced prior judgments to underscore the obligation of the assessee to inform the tax authorities of relevant facts. The decision reinforced the ITO's authority to reopen assessments when new information indicates potential income escaping tax. The case highlights key aspects of tax law and the responsibilities of corporate entities. |
| Court |
Calcutta High Court
|
| Entities Involved |
Electro Steel Castings Ltd.
|
| Judges |
ASHOK KUMAR GANGULY,
DEBI PRASAD SENGUPTA
|
| Lawyers |
Ram Chandra Prasad,
Debi Prasad Pal,
Ms. Manisha Seal,
Malay Dhar
|
| Petitioners |
Income Tax Officer
|
| Respondents |
Electro Steel Castings Ltd.
|
| Citations |
2003 SLD 3291,
(2003) 264 ITR 410
|
| Other Citations |
Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC),
Coca-Cola Export Corporation v. ITO [1998] 231 ITR 200 (SC),
CIT v. A. Raman & Co. [1968] 67 ITR 11 (SC),
CIT v. Assam Oil Co. Ltd. [1982] 133 ITR 204 (Cal.),
CIT v. Maneklal Harilal Spinning & Manufacturing Co. Ltd. [1977] 106 ITR 24 (Guj.),
Dilip S. Dahanukar v. Samir Tekriwal, Asstt. CIT [2001] 248 ITR 147 (Bom.),
Dunlop Rubber Co. Ltd. (London) v. ITO [1971] 79 ITR 349 (Cal.),
Ganga Saran and Sons (P.) Ltd. v. ITO [1981] 130 ITR 1 (SC),
Grindlays Bank Ltd. v. ITO [1979] 116 ITR 710 (Cal.),
ITO v. Madnani Engineering Works Ltd. [1979] 118 ITR 1 (SC),
Indian Oil Corporation v. ITO [1986] 159 ITR 956 (SC),
J.K. Charitable Trust v. WTO [1996] 222 ITR 523 (All.),
Kantamani Venkata Narayana and Sons v. ITO (First Addl.) [1967] 63 ITR 638 (SC),
Madras Auto Service v. ITO [1975] 101 ITR 589 (Mad.),
S. Narayanappa v. CIT [1967] 63 ITR 219 (SC),
Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
147,
148
|