Commissioner of Income-tax Vs. East Coast Marine Products (P.) Ltd. and anr. - Court Judgment

Excerpt:

.....therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the.....order--in respect of matters not covered by appeal before commissioner (a)held:the doctrine of merger applies to income tax proceedings but the extent of its applicability depends onthe scope and the subject matter of the appeal and the decision rendered by the appellate authority. matters whichare not covered by the appellate order are left untouched and to that extent, the ito's assessment order survives permitting exercise of revisional jurisdiction by the commissioner under s. 263. -- cit v. k.l. rajput (1987) 164 itr 197 (mp) (fb) concurred with.-- note : legislature has since stepped in with a view to remove any controversy. it has introduced cl. (c) in the explanation to s. 263. this explanation introduced by the taxation laws (amendment), act, 1984, and amended by the direct tax laws (amendment) act, 1987, though not applicable to the assessmentorder concerned herein, manifests the legislative intent. income tax act 1961 s.263

Judgment:

ORDER

--In respect of matters not covered by appeal before Commissioner (A)

Held:

The doctrine of merger applies to income tax proceedings but the extent of its applicability depends onthe scope and the subject matter of the appeal and the decision rendered by the appellate authority. Matters whichare not covered by the appellate order are left untouched and to that extent, the ITO's assessment order survives permitting exercise of revisional jurisdiction by the Commissioner under s. 263. -- CIT v. K.L. Rajput (1987) 164 ITR 197 (MP) (FB) concurred with.-- Note : Legislature has since stepped in with a view to remove any controversy. It has introduced cl. (c) in the Explanation to s. 263. This Explanation introduced by the Taxation Laws (Amendment), Act, 1984, and amended by the Direct Tax Laws (Amendment) Act, 1987, though not applicable to the assessmentorder concerned herein, manifests the legislative intent.

Income Tax Act 1961 s.263