COMMISSIONER OF INCOME-TAX V. LEENABEN A SARABHAI

ITR/219/1994

AI Insights

The case involves the Commissioner of Income-Tax as the applicant and Leenaben A Sarabhai as the respondent. The Income Tax Appellate Tribunal had previously made a decision that the Income Tax Officer (ITO) had no authority to reopen the assessment under section 147(b) of the Income Tax Act, and that the reassessment was not justified under section 263. The Tribunal also concluded that sections 2(47) and 52(2) were not applicable in determining the appeal. However, the High Court found that the basis for these conclusions was no longer valid due to a prior High Court decision that set aside the Tribunal's earlier order on which the current decision relied. Consequently, the High Court remanded the case back to the Tribunal for a decision in accordance with the law as per the new findings.

• Counselvise Citation: [2006] 140 COUNSELVISE.COM (IT) 717903 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 20-07-2006
• Assessment Year: misc
• Other Referred Cases: ITA No. 404/Ahd./78-79, ITR No.351/80
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Assessee Lawyers: B B NAYAK
• Keywords: Assessment; Authority; High Court; Income Tax; Reassessment; Tribunal
• Section: 263; 2(47); 147(b); 52(2)

Judgement Text

"ITR/219/1994 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 219 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME-TAX - Applicant(s) Versus LEENABEN A SARABHAI - Respondent(s) ========================================================= Appearance : MR BB NAIK for Applicant(s) : 1, None for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 20/07/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG) ITR/219/1994 2/5 JUDGMENT 1. Heard Mr. B.B. Nayak, learned counsel for the Revenue. None for the respondent-assessee though office report shows that the noticee is served. 2. Present Reference has been made by the Income- tax Appellate Tribunal, at the instance of the Revenue on the following questions:- [1] Whether on the facts and in the circumstances of the case the Tribunal was right in law in coming to the conclusion that the Income-tax Officer had no authority to reopen the assessment under section 147[b] of the Act? [2] Whether, on the facts and in the circumstances of the case, the Tribunal erred in not considering the fact whether the reassessment made by the ITO was justified under the provisions of section 263 of the Act? [3] Whether on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the provisions of section 2[47] of the Act and ITR/219/1994 3/5 JUDGMENT the provisions of section 52[2] were not required to be considered in determining the appeal?” 3. Mr. Nayak, learned counsel for the Revenue submits that the Commissioner of Income-tax (Appeal), so also the Tribunal relied upon the earlier order passed by the Tribunal dated 12.10.79 in ITA No. 404/Ahd./78-79 for assessment year 1974-75 and held that once particular items were deleted from tax, then, same could not be included for purposes of taxation or for reopening assessment under section 147/b] of the Act. He submits that in ITA 404/Ahd./78-79, at the instance of the Revenue, a Reference was made which was registered as ITR No.351/80 and was ultimately decided in favour of the Revenue and the matter was remitted to the Tribunal for deciding the matter afresh. The said judgment of the High Court is reported in [1988] 171 ITR 86. He submits that once the earlier order of the Tribunal on which everybody was placing reliance ITR/219/1994 4/5 JUDGMENT was set aside by the High Court, then, very foundation to hold that the items were not includible or were not exigible would not be available to the assessee nor to the Tribunal to decide against the Revenue. In the matter of Smt. Leenaben A. Sarabhai[supra], the High Court had remitted the matter back to the Tribunal for disposal in accordance with law. Under the circumstances, we do not think that we should answer questions at this stage as we are of the view that the very foundation for deciding the matter is lost. Without answering the questions referred to us, we set aside the order passed by the Tribunal, remand the matter back to the Tribunal with a direction to decide the matter afresh in light of the decision of the earlier matter which was remanded earlier by this Court. Reference stands disposed of accordingly. There shall be no costs. [R.S. GARG, J.] [M.R. SHAH, J.] ITR/219/1994 5/5 JUDGMENT pirzada/- "