COMMISSIONER OF INCOME-TAX V. N. J. METAL SCREENS MFG. PVT. LTD.

ITR/199/1986

AI Insights

The case involves a reference by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C', to the High Court of Gujarat concerning the entitlement of the assessee, N. J. Metal Screens MFG. Pvt. Ltd., to interest under section 214 of the Income-tax Act, 1961. The Tribunal had initially ruled in favor of the assessee, relying on a previous judgment by the High Court in Bardolia Textile Mills v. ITO. However, during the pendency of the reference, the Supreme Court's decision in Modi Industries Ltd. & Ors. v. C IT and anr. contradicted this precedent, leading the High Court to reverse its earlier position and rule against the assessee.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 718462 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 04-07-2001
• Assessment Year: misc
• Other Referred Cases: Bardolia Textile Mills v. ITO, Modi Industries Ltd. & Ors. v. C IT and anr.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: B B NAIK
• Keywords: Assessment Order; Income Tax; Interest; Legal interpretation
• Section: 214; 256(2)

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 199 of 1986 For Approval and Signature: Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 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 @ COMMISSIONER OF INCOME-TAX Versus N. J. METAL SCREENS MFG. PVT. LTD. -------------------------------------------------------------- Appearance: MR BB NAIK for MR MANISH R BHATT for Petitioner No. 1 SERVED BY RPAD - (N) for Respondent No. 1 CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA Date of decision: 04/07/2001 ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE) At the instance of the revenue, the following two questions have been referred to this court for its opinion by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C' under the provisions of sec. 256(2) of the Income-tax Act, 1961 (hereinafter referred to as'the Act'). 1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in coming to the conclusion that the assessee was entitled to the interest u/s 214 of the I.T. Act? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in coming to the conclusion that the assessee was entitled to interest u/s 214 of the I.T. Act for the period subsequent to the date of original assessment order also? 2. Learned advocate Shri B.B. Naik has appeared for the applicant whereas nobody has appeared for the respondent assessee, though served. 3. While coming to the conclusion that the assessee was entitled to interest under the provisions of sec. 214 of the Act, the tribunal had relied upon a judgment delivered by this court in case of Bardolia Textile Mills v. ITO, 151 ITR 389. The Tribunal, therefore, came to the conclusion that the assessee was entitled to interest under the provisions of sec. 214 of the Act. 4. Learned advocate Shri Naik has drawn our attention to the fact that during pendency of the reference, the Hon'ble Supreme Court has not approved the ratio of the judgment delivered by this court in Bardolia Textile Mills (supra). He has drawn our attention to the judgment delivered by the Hon'ble Supreme Court in case of Modi Industries Ltd. & Ors. v. C IT and anr., 216 ITR 759. Looking to the facts of the case, it is very clear that the assessee could not have been awarded interest under the provisions of sec. 214 of the Act. 5. In view of the law laid down by the Hon'ble Supreme Court in case of Modi Industries Ltd. (supra), we answer both the questions in the negative i.e. in favour of the revenue and against the assessee. The reference stands disposed of accordingly with no order as to costs. (A.R. Dave, J.) (D.A. Mehta, J.) (hn) "