Anbu Textiles Vs. Assistant Commissioner of Income-tax

Anbu Textiles vs Assistant Commissioner of Income-tax

Disposition Appeal allowed Court Chennai Decided Dec 17, 2002

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https://sooperkanoon.com/case/834998

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Citation: sooperkanoon.com/834998
Court: Chennai High Court
Judge: N.V. Balasubramanian and ;K. Raviraja Pandian, JJ.
Decided On: Dec 17, 2002
Case Number: Tax Case (Appeal) No. 489 of 1999
Subject: Direct Taxation
Disposition: Appeal allowed

Case Summary

AI-generated summary - not the official court judgment text.

- T.N. ESTATES (ABOLITION & CONVERSION INTO RYOTWARI) ACT, 1948 [Act No. 26/1948]. Sections 5(2) & 67; [A.P. Shah, CJ, Mrs. Prabha Sridevan & P. Jyothimani, JJ] Suo motu revisional powers Held, On a bare reading of the provisions of Section 5(2) of the Act, it is clear that the power conferred on the Director by Se...

Key legal issue: Direct Taxation
Outcome / disposition: Appeal allowed
Acts & sections: Finance Act, 2002; Income Tax Act, 1961 - Sections 80HHC and 158BB

Parties & Advocates

Appellant / Petitioner

Anbu Textiles

Advocate Anitha Sumanth, Adv.

Respondent

Assistant Commissioner of Income-tax

Advocate Pushya Sitharaman, Adv.

Legal References

Acts: Finance Act, 2002; Income Tax Act, 1961 - Sections 80HHC and 158BB
Reported In: (2004)187CTR(Mad)646; [2003]262ITR684(Mad)

Excerpt

.....had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. -- t.n. estates (abolition & conversion into ryotwari) act, 1948. sections 5(2) & 67; suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of..........against the order of the income-tax appellate tribunal in i.t. (ss) a. no. 88/mds of 1997 dated september 1, 1999.2. the appeal was admitted and the following substantial questions of law were framed at the time of admission:'1. whether, on the facts and in the circumstances, the tribunal is right in holding that the appellant is not eligible for relief under section 80hhc in respect of the income of rs. 14,35,756 claimed by the appellant as eligible for deduction under section 80hhc ? 2. whether, on the facts and in the circumstances of the case, the tribunal is right in holding that in an assessment under chapter xiv-b, relief under section 80hhc cannot be allowed ?' the appellant herein claimed relief under section 80hhc in the block assessment made under chapter xiv-b of the act. the tribunal, when it decided the matter on september 1, 1999, relied upon section 158bb of the act as it stood then, and held that the assessee was not eligible to claim deduction under section 80hhc on the ground that section 80hhc is found only in chapter vi-a and under section 158bb of the act as it stood then, the assessment has to be made only 'in accordance with chapter iv' on the basis of the result of a search and the provisions of chapter vi-a are excluded for consideration.mrs. anitha sumanth, learned counsel appearing for the appellant, brought to the attention of this court that section 158bb of the act was amended with retrospective effect from july 1, 1995, right from the date when chapter xiv-b was inserted, and in view of the retrospective effect given to section 158bb of the act, the income has to be computed 'in accordance with the provisions of the act' instead of the old provision--'in accordance with the provisions of chapter iv'. hence, she submitted that the assessee would be eligible to claim deduction under section 80hhc of the act.learned counsel for the revenue in her fairness has not made any objection to the same.we find force in the submission of.....

Full Judgment

N.V. Balasubramanian, J.

1. This appeal is directed against the order of the Income-tax Appellate Tribunal in I.T. (SS) A. No. 88/Mds of 1997 dated September 1, 1999.

2. The appeal was admitted and the following substantial questions of law were framed at the time of admission:

'1. Whether, on the facts and in the circumstances, the Tribunal is right in holding that the appellant is not eligible for relief under Section 80HHC in respect of the income of Rs. 14,35,756 claimed by the appellant as eligible for deduction under Section 80HHC ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that in an assessment under Chapter XIV-B, relief under Section 80HHC cannot be allowed ?'

The appellant herein claimed relief under Section 80HHC in the block assessment made under Chapter XIV-B of the Act. The Tribunal, when it decided the matter on September 1, 1999, relied upon Section 158BB of the Act as it stood then, and held that the assessee was not eligible to claim deduction under Section 80HHC on the ground that Section 80HHC is found only in Chapter VI-A and under Section 158BB of the Act as it stood then, the assessment has to be made only 'in accordance with Chapter IV' on the basis of the result of a search and the provisions of Chapter VI-A are excluded for consideration.

Mrs. Anitha Sumanth, learned counsel appearing for the appellant, brought to the attention of this court that Section 158BB of the Act was amended with retrospective effect from July 1, 1995, right from the date when Chapter XIV-B was inserted, and in view of the retrospective effect given to Section 158BB of the Act, the income has to be computed 'in accordance with the provisions of the Act' instead of the old provision--'in accordance with the provisions of Chapter IV'. Hence, she submitted that the assessee would be eligible to claim deduction under Section 80HHC of the Act.

Learned counsel for the Revenue in her fairness has not made any objection to the same.

We find force in the submission of Mrs. Anitha Sumanth, learned counsel for the appellant. It is clear that Section 158BB of the Act was amended with full retrospective effect, from July 1, 1995, and under the amended provision, the undisclosed income of the block period shall be computed in accordance with the provisions of the Act, and, therefore, the provisions contained in Chapter VI-A of the Act should also be taken into consideration in determining the undisclosed income of the block period. It is true that the Appellate Tribunal decided the matter on the basis of law then existing. The amendment came into force only by the Finance Act, 2002, with retrospective effect from July 1, 1995. Since the amendment has been given retrospective effect, we are of the view, the provision, as amended, would be the proper provision for determining the undisclosed income of the block period. We are therefore of the view that the Appellate Tribunal should go into the question whether the assessee is actually eligible to claim deduction under Section 80HHC of the Act as the Appellate Tribunal had no opportunity to decide the said question. Accordingly, the appeal is allowed and the order of the Appellate Tribunal is set aside and the matter is remitted back to the Appellate Tribunal to decide the question whether the assessee is eligible to claim deduction under Section 80HHC of the Act on the merits of the case. It is made clear that it is open to the Appellate Tribunal to remit the matter to the Assessing Officer to consider the question. It is also open to the parties to produce evidence in support of their respective claims. However, in the circumstances of the case, there will be no order as to costs.

Same Court & Year Chennai · 2002 Same Parties Anbu Textiles vs Assistant Commissioner of Income-tax Same Subject Direct Taxation Same Judge N.V. Balasubramanian and ;K. Raviraja Pandian, JJ. Acts & Sections Finance Act, 2002; Income Tax Act, 1961 - Sections 80HHC and ...

Direct Taxation