COMMISSIONER OF INCOME TAX V. NIRMA CHEMICALS WORKS,

ITA/9/1999

AI Insights

The case involves the Commissioner of Income-tax, Gujarat-I, Ahmedabad, who sought a reference from the Income Tax Appellate Tribunal on two questions of law regarding the deletion of certain additions made by the Assessing Officer and the applicability of Section 154 of the Income-tax Act, 1961. The Tribunal had previously rejected the application, leading to the present case before the High Court. The main contention was whether the Commissioner of Income-tax (Appeals) had correctly interpreted the expenses related to printing and distribution of calendars under Section 37(3A) and whether the rectification under Section 154 was time-barred. The High Court found that the Tribunal and the Commissioner of Income-tax (Appeals) had correctly applied the law and facts, thus rejecting the need for a reference.

• Counselvise Citation: [1999] 140 COUNSELVISE.COM (IT) 743134 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 04-10-1999
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S N SOPARKAR
• Assessee Lawyers: B B NAIK; MANISH BHATT
• Keywords: Assessment Order; Expenditure; Income Tax; Rectification; Time barred
• Section: 154; 256(1); 37(3A)

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX APPLICATION No 9 of 1999 For Approval and Signature: Hon'ble MR.JUSTICE B.C.PATEL and Sd/- Hon'ble MR.JUSTICE P.B.MAJMUDAR Sd/- ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? YES 2. To be referred to the Reporter or not? YES : 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? NO 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? NO 5. Whether it is to be circulated to the Civil Judge? : NO NO -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus NIRMA CHEMICALS WORKS, -------------------------------------------------------------- Appearance: MR BB NAIK with MR MANISH R BHATT for Petitioner MR SN SOPARKAR for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE B.C.PATEL and MR.JUSTICE P.B.MAJMUDAR Date of decision: 04/10/1999 ORAL JUDGEMENT (Per Patel, J.) Commissioner of Income-tax, Gujarat-I, Ahmedabad preferred an application under Section 256 (1) of the Income-tax Act, 1961 (hereinafter referred to as the Act) before the Income Tax Appellate Tribunal requesting for a reference on the following questions of law: \"1. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income Tax (Appeal) holding that action under Section 154 had become time barred in view of the fact that the said order was passed with reference to the order giving effect to the Commissioner of Income Tax (Appeal)'s order? 2. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income Tax (Appeal) deleting the additions made by the Assessing Officer of Rs.3,50,586/- ?\" 2. It appears that the Tribunal rejected the application and hence the present application is filed before this Court inter alia requesting the Court to direct the Tribunal to raise and refer to this Court the questions of law referred hereinabove. 3. So far as Question No.1 is concerned, learned advocate Mr.Naik appearing for the Revenue submitted that, reading the order it appears that the Commissioner of Income-tax (Appeals) allowed only the expenses with regard to printing of calander and, therefore, the Assessing Office was justified in interpreting the order as he has interpreted. It is required to be noted that on page 3 of the order, several expenses are indicated claiming benefits under Section 37 (3A) of the Act. With regard to each item, submissions have been made by the assessee in writing which are taken note of. After considering all these items, the Commissioner of Income-tax (Appeals) came to the conclusion that the expenditure incurred on printing and distribution of calendars does not come within the mischief of section 37 (3A) of the Act. The learned Commissioner of Income-tax (Appeals) also observed that, in view of this background, the addition made by the Income-tax Officer is deleted. The Revenue submitted that all the items were not taken into consideration. Suffice it to say that if, according to the Revenue, the order passed by the Commissioner of Income-tax (Appeals) was required any rectification, it was necessary to approach the appropriate authority or ought to have approached Tribunal challenging that order. Nothing is done so far. 4. It is also required to be noted that as observed by the Commissioner of Income-tax (Appeals), if Commissioner (Appeals) did not pass a speaking order with regard to other items of expenditure, the remedy available with the department is to approach the Income Tax Appellate Tribunal. It cannot be said that the Commissioner of Income-tax (Appeals) had deleted only a part of the deletion referable to an expenditure on printing and distribution of calendars. In view of this, the order passed by the Assessing Officer was held not to be sustainable by the Commissioner of Income-tax (Appeals). It is under these circumstances, the aforesaid question does not require any reference. 5. So far as the second question is concerned, in para 2 of the order, we find discussion with regard to a sum of Rs.3,50,586. The view of the Assessing Officer was that the same should have been added. The Commissioner of Income-tax (Appeals) in para 6 has pointed out that the Assessing Officer has proceeded to rectify the alleged mistake apparent from record which according to him crept into assessment order dated 26.3.1987. Such a mistake as per provisions of section 154 could have been rectified on or before 31.3.1991. Therefore, the impugned order passed by the Assessing Officer on 18.3.1992 on this point is time barred and thus the order of A.O. cannot be maintained. Further, even for the disallowance with reference to Rs.6,08,905 has been deleted by the CIT (A), and therefore, on merits also it cannot be said that there was a mistake apparent from record. Having regard to the facts, further addition of Rs.3,50,586 made by the Assessing Officer is deleted. 6. In view of what we have stated hereinabove, no referable question can be said to have arisen and hence this application is rejected. (KMG Thilake) ####### STARTORDER SCA634489J IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 6344 of 1989 For Approval and Signature: Hon'ble MR.JUSTICE S.K.KESHOTE ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- HEIRS OF KRISHANKANT MAGANLAL MEHTA Versus STATE OF GUJARAT -------------------------------------------------------------- Appearance: MR JR NANAVATI for Petitioners GOVERNMENT PLEADER for Respondent No. 1, 2 -------------------------------------------------------------- CORAM : MR.JUSTICE S.K.KESHOTE Date of decision: 04/10/1999 ORAL JUDGEMENT Learned counsel for the petitioner states that the petitioner is in possession of the disputed land. This statement of the learned counsel for the petitioner has not been controverted by the learned counsel for the respondent. In the result, this Special Civil Application abates in view of the Urban Land (Ceiling and Regulation) Repeal Act, 1999 and accordingly the same is dismissed. Rule discharged. Interim relief, if any, granted by this court stands vacated. No order as to costs. Liberty is granted to the respondents for revival of this Special Civil Application, in case of any difficulty. ........... "