Compilations of case law: General Topics: INTERPRETATION OF STATUTES

INTERPRETATION OF STATUTES

Words to be given plain grammatical meaning
Orissa State Warehousing Corpn. Vs CIT (SC) 237 ITR 589
CIT Vs Gautam Sarabhai Trust (Guj) 173 ITR 216
CBDT Vs Cochin Goods Transport Associate (Ker) 236 ITR 993
G. Rao Electrodes Ltd. Vs CIT (Ker) 173 ITR 351
CIT Vs Casino (P) Ltd. (Ker) 91 ITR 289
M.P. Poddar (HUF) & Anr. Vs Appropriate Authority & Anr. (Del) 240 ITR 372

Word of analogous meaning coupled together – General word to be construed in the restricted sense in which the analogous less general word is used.
G. Claridge and company Ltd. (SC)(1991) 2 Supreme Court cases 229
Dr. Devendra M. Surti (SC) AIR 1969 Supreme Court 63

Definition of expression in one statute cannot automatically be applied to another statute.
CIT Vs Vasan Publications P. Ltd. (Mad) 159 ITR 381
CIT Vs Buhari Sons P. Ltd. (Mad) 144 ITR 12

Provision of another statute does not apply ipso facto but guidelines under such provision may be applied.
CGT Vs Prithvi Nath Sharma (Guj) 239 ITR 809

"Income" – meaning – should be the same as that of word occurring in legislature list –is of widest amplitude and must be given natural and grammatical meaning
CIT Vs G.R. Karthikeyan (SC) 201 ITR 866

When the meaning of words is clear and unambiguous, the Court has to give effect to it whatever be the consequences, as the Court has no jurisdiction to mitigate harsh consequences of the statute, if any.
Patil Vijayakumar & Ors. Vs Union of India & Anr. (Kar) 151 ITR 48

Words take colour from context in which they are used.
CIT Vs Venkateswara Hatcheries (P) Ltd. (SC) 237 ITR 174

Dictionary meaning of words not to be adopted where context conveys different shades of meaning.
CIT Vs Anand Theatres (SC) 244 ITR 192

'Etc.' means things of same character or those things "ejusdem generis"
CIT Vs Maulana Tea Co. (Ker) 244 ITR 589

No retrospectivity unless expressly stated or clearly implied
Virtual Soft Systems Ltd. Vs CIT (SC) 289 ITR 83
Gem Granites Vs CIT (SC) 271 ITR 322

It is necessary to spell out the degree of retrospectivity of a statutory provision from the language of the provision itself.
Union of India & Anr. Vs Raghubir Singh (SC) 178 ITR 548

An explanation brought in the statute Book is ordinarily clarificatory in nature and has retrospective effect.
Laxmi Industries Ltd. Co. & Ors Vs ITO & Anr. (Raj) 231 ITR 514
Beneficial provision does not necessarily imply that the amendment is to be given retrospective effect, unless specifically made it as retrospective in operation.
CIT Vs Pooshya Exports (P) Ltd. (Mad) 262 ITR 417
CWT Vs Reliance Motor Co. Ltd. (Mad) 260 ITR 571
CWT Vs B.R. Theatres & Industrial Concerns (P) Ltd. (Mad) 272 ITR 177

When a particular enactment or amendment is the result of the recommendation of the Law Commission, it is permissible to refer to the relevant report of the Commission.
It cannot be said to be an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section which had to be construed.
When an Act is declaratory in nature, the presumption against its retrospectivity is not applicable.
Mithilesh Kumari & Anr. Vs Prem Behari Khare (SC) 177 ITR 97

Effect of substitution of one provision by another – substituted provision deemed to be part of act from very inception.
K.T. Venkatappa & Ors. Vs K.N. Krishnappa & Ors. (Kar) 173 ITR 678

Prospective over ruling – Declaration of invalidity by SC to take effect from date of judgement.
Somaiya Organics (India) Ltd. & Anr. Vs State of Uttar Pradesh & Anr. (SC) 251 ITR 20

No prospective overruling unless so specified by SC.
M.A. Murthy Vs State of Karnataka & Ors. (SC) 264 ITR 1

When a statutory provision is interpreted by the Supreme Court in a manner different from the interpretations made in the earlier decisions by a smaller Bench, the law laid down by the larger Bench would constitute the law of the land and is to be regarded as law as it always was unless declared by the Court itself to be prospective in operation
Southern Industrial Corpn. Ltd. Vs CIT (Mad) 258 ITR 481

Interpretation in conformity with object of provision
American Hotel and Lodging Association Educational Institute Vs CBDT (Del) 289 ITR 46

Marginal note or heading – can be taken into account to arrive at reasonable construction.
Shree Sajjan Mills Ltd. Vs CIT & Anr. (SC) 156 ITR 585

The preamble of a statute is apart of the Act. And is an admissible guide to construction. Preamble is to express the scope, object and purpose of the Act.
Secretary, Regional Transport Authority Vs D.P. Sharma AIR 1989 SC 509 pp. 511

Speech of Finance Minister can be referred to ascertain object of legislation.
Soorajmull Nagarmull Vs CIT (Cal) 190 ITR 418

Legislative history and Circulars of CBDT can be used as aids for interpretation of provisions.
CIT Vs M.K. Vaidya (Kar) 224 ITR 186

Press note issued by Finance Ministry – Does not have force of law
Tarak Nath Paul Vs CWT (Cal) 142 ITR 468
Result of interpretation should not give rise to absurdity.
ITO Vs. H.P. Vishweswaraiah (Kar) 250 ITR 863
Chartered Housing v. Appropriate Authority (Kar) 250 ITR 1

If a strict and literal construction of the statute leads to an absurd result, i.e., a result not intended to be sub served by the object of the legislation ascertained from the scheme of legislation, then, if another construction is possible, apart from the strict literal construction, that construction should be preferred to the strict literal construction.
CIT Vs Gotla J.H. (SC) 156 ITR 323
K.P. Verghese Vs ITO & Anr. (SC) 131 ITR 597
CIT Vs Malayala Manorama & Co. Ltd. (Ker) 143 ITR 29
Ansal Properties & Industries Ltd. Vs Appropriate Authority & Ors. (Del) 236 ITR 793
ITO Vs Bharthi Trust (ITAT, Ahd) 60 ITD 261
CIT Vs P.K. Noorjahan (SC) 237 ITR 570
Nayantara G. Agrawal Vs CIT (Bom) 207 ITR 639
CWT Vs K.S. Vaidyanathan (Mad) 153 ITR 11
C.W.S. (India) Limited etc. Vs CIT (SC) 208 ITR 649
CIT Vs Laxmi Metal Industries (All) 236 ITR 130
V. Guruviah Naidu & Sons Vs CIT (Mad) 216 ITR 156
Shree Sajjan Mills Ltd. Vs CIT & Anr. (SC) 156 ITR 585

Sometimes one finds two or more enactments operating in the same field and each containing a non obstante clause stating that its provision will have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The conflict in such case is resolved on consideration of purpose and policy underlying the enactments and the language used in them
Sarvan singh Vs Kasturilal AIR 1977 SC 265 pp. 274-275
Ashoka Marketing Ltd. Vs Punjab National Bank AIR 1991 SC 855 pp. 878-879

Legal fictions are limited to the purpose for which they are created and should be taken to their logical end in application of the fiction to the facts the Court has to consider.
Chidambaram Mulraj & Co. Pvt. Ltd,. Vs CIT (Bom) 58 ITR 206

When language is vague and is capable of different interpretations, Court may derive some guidance from speech of Minister – Views expressed in reports need not be considered.
Delhi Flour Mills Co. Ltd. Vs CIT (Del) 95 ITR 151

The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature, which is to make a charge levied effective.
Sardar Harvindar Singh Sehgal & Ors. Vs ACIT & Ors. (Gau) 227 ITR 512
Gursahai Saigal Vs CIT (SC) 48 ITR 1
Jayalakshmi Leasing Co. Vs ACIT (ITSC-SB) 228 ITR (AT)1

Principle of beneficial interpretation would apply only in a case where the Court is in doubt about the true scope and ambit of the provision or finds two equally reasonable interpretations and not where the words of the statute are plain, precise and unambiguous.
Indian Rayon Corporation Limited Vs CIT (Bom) 231 ITR 26

Specific provision over-rides general provisions
South India Corporation Vs Secretary, Board of Revenue, Trivandrum AIR 1964 SC 207 pp. 215
Provision granting exemption – Strict construction.
Kota Co-operative Marketing Society Ltd. Vs CIT (Raj) 207 ITR 608
CIT Vs Orissa State Warehousing Corporation (Ori) 201 ITR 729
Renuka Datla Vs CIT & Anr. (AP) 240 ITR 463
Novopan India Ltd. Vs Commissioner of Central Excise 1994 (73) E.L.T. 769 (SC)

No ambiguity in the provisions of the statute – Provisions cannot be interpreted to confer benefit on assessee
Seshasayee Paper & Boards Limited Vs DCIT (Mad) 272 ITR 165
IPCA Laboratory Ltd. Vs DCIT (SC) 266 ITR 521

"Casus omissus" – Matters which should have been provided but not provided for in a statute – cannot be supplied by Courts.
Laxmandas Pranchand & Ors. Vs Union of India & Ors. (MP) 234 ITR 261
CIT Vs R.J. Trivedi & Sons (MP) 183 ITR 420

Executive instruction can only supplement statute – cannot curtail the statute or whittle down its effect.
State of M.P. & another Vs G.S. Dall and Flour Mills (SC) 187 ITR 478

Decision is an authority for what it actually decided and not for what follows from observations made while deciding case.
Nav Nirman P. Ltd. Vs CIT (MP) 174 ITR 574
CIT Vs Sun Engineering Works (P) Ltd. (SC) 198 ITR 297

Interpretation of orders of Courts & Tribunals must be in context of actual findings.
Thanthi Trust Vs ACIT (Mad) 238 ITR 117

Subsidiary and integral transactions have to take colour from Principal transactions.
Hindalco Industries Ltd. Vs ACIT (ITAT, Mum) 94 ITD 242

A party cannot escape the consequences of law merely by describing an agreement in a particular form though in essence and in substance, it may be a different transaction.
CIT Vs Panipat Woollen & General Mills Co. Ltd. (SC) 103 ITR 66

Compulsive provision will control a discretionary provision
Life Insurance Corporation of India Ltd. Vs S.V. Oak AIR 1965 SC 975 pp. 980

If a provision is mandatory, an act done in breach thereof will be invalid, but if directory, the act will be valid although non-compliance may give rise to some other penalty if provided by the statute
C. Drigraj Kuer Vs Amar Krishna Narain singh AIR 1960 SC 234 pp. 449, 451
Union of India Vs Tulsiram Patel AIR 1985 SC 1416

Once it is shown that the case of the assessee comes within the letter of law, he must be taxed, however greater the hardship may appear to the judicial mind, to be.
Tarulata Shayam & ors. Vs CIT (SC) 108 ITR 345
CWT Vs K.S. Vaidyanathan (Mad) 153 ITR 11
Padmasundara Rao (Deceased) & Ors. Vs State of Tamil Nadu & Ors. (SC) 255 ITR 147
ACIT & Ors. Vs Velliappa Textiles Ltd. & Ors. (SC) 263 ITR 550
Prakash Nath Khanna & Anr. Vs CIT & Anr. (SC) 266 ITR 1

Compilations of case law: General Topics: JUDICIAL DISCIPLINE

JUDICIAL DISCIPLINE

IT Proceedings – Res judicata not applicable.
CIT Vs Syed Saddique Imam & Others (Patna) 111 ITR 475
Tamilnadu Chlorates Vs JCIT ( ITAT, Chennai ) 98 ITD 1
New Jehangir Vakil Mills Co. Ltd. Vs CIT (SC) 49 ITR 137
Kotak Mahindra Finance Ltd. Vs DCIT (Bom) 265 ITR 114

Decision of Courts of co-ordinate jurisdiction binds each other – An established position should not be easily distorted
CIT Vs Meat Products of India Ltd (Ker) 224 ITR 1
CIT Vs L.G. Ramamurthy & ors. (Mad) 110 ITR 453
CIT Vs Sterling Foods (SC) 153 CTR 439/237 ITR 579
Lakshmi Vilas bank Ltd. Vs CIT (Mad) 284 ITR 93

Difference of opinion before co-ordinate Benches of a Court – Matter referred to larger Bench.
Aditya Minerals Pvt. Ltd,. Vs CIT (SC) 236 ITR 39
ITO Vs Ramkrishna Bajaj (ITAT,Bombay SB) 198 ITR (AT) 1

Reconsidering facts for a later year and recording different finding – Finding for earlier year not conclusive.
Ace Investments (P) Ltd. Vs CIT (Mad) 244 ITR 166

If the previous decision is plainly erroneous, there is a duty of the Court to review it and not perpetuate the mistake ie. a vital point was not considered OR when an earlier relevant statutory provision had not been brought to the notice of Court.
Union of India & Anr. Vs Raghubir Singh (SC) 178 ITR 548
Sri Agasthyar Trust Vs CIT (SC) 236 ITR 23
Sriram Transport Finance Co. Ltd. Vs ACIT (ITAT, Mad) 70 ITD 406

If there is conflict between the two decisions of Supreme Court the one decided by a larger Bench is binding – If both decisions are rendered by Bench consisting of equal number of judges, the later decision is binding.
Govindanaik Vs West Patent Press Co. Ltd. AIR 1980 Kar 92 (FB)
Bhika Ram & Ors. Vs Union of India & Ors.(Del) 238 ITR 113

Later judgement explaining earlier judgement – cannot be disregarded.
CGT Vs Arunbhai Hargovandas Patel (Guj) 264 ITR 586

Cases which are over ruled should not be quoted.
CIT Vs Dugdh Utpadak Sahkari Sangh Ltd. (All) 277 ITR 35

Third Member decision and Special bench decision of ITAT are of the same nature
DCIT Vs Oman International Bank SAOG ( ITAT, Mumbai – SB ) 100 ITD 285

Where contrary views are held by Third member and Special bench, view of Special bench takes precedence
DCIT Vs Padam Prakash (HUF) (ITAT, Del-SB) 104 ITD 1

Rejection of SLP does not mean that decision of HC has been approved.
CIT Vs Quality (Pat) 224 ITR 77
CIT Vs Shree Manjunatheswara Packing Products & Camphor Works (SC) 231 ITR 53
J.K Charitable Trust Vs WTO & Ors. (All) 222 ITR 523

Dismissal of appeal simpliciter – Not a declaration of law – No binding precedent
CIT Vs Geetha Ramakrishna Mills P. Ltd. (Mad) 288 ITR 489
S. Shanmughavel Nadar Vs State of Tamil Nadu & Anr. (SC) 263 ITR 658
Kunhayammed & Ors. Vs State of Kerala & Anr. (SC) 245 ITR 360
Saurashtra Oil Mills Assn., Gujarat Vs State of Gujarat & Anr. 2002 AIR 1130 SC

Special Leave petition dismissed with speaking order – Declaration of law by Supreme Court
After rejection of SLP, lower Courts can review its order
Once SLP is admitted, lower Courts have no jurisdiction to review the order
Kunhayammed & Ors. Vs State of Kerala & Anr. (SC) 245 ITR 360

Lower authority bound by order passed by higher authority
CIT Vs Ralson Industries Ltd. (SC) 288 ITR 322
Nokia Corporation Vs DIT (Int. Taxation) (Del) 292 ITR 22

Obiter dictum is expression of opinion on a point which is not necessary for the decision of a case. Obiter dictum of Supreme Court binding on all the High Courts
Tata Iron & Steel co. Ltd. Vs D.V. Bapat, ITO & Anr. (Bom) 101 ITR 292

Essence of a decision is its ratio decedendi and not every observation found therein – the concrete decision alone is binding – Obiter dictum not binding
Union of India Vs Dhanwanti Devi (1996) 6 SCC 44 pp. 96
CIT Vs Sun Engineering Works Pvt. Ltd. (SC) 198 ITR 297

Impact of ITAT order extends to only its jurisdiction
Saipem S.P.A. Vs DCIT (ITAT, Delhi) 86 ITD 572

Decision of High Court binding on Income Tax authorities
Om Prakash Trivedi Vs Union of India (All) 287 ITR 11

Single Judge cannot give a decision contrary to earlier judgement by a
Division Bench
Mehta Vegetables P. Ltd Vs Union of India & Anr.(Raj) 235 ITR 425

Decision of one High Court not binding on another High Court – Not binding on Tribunal in other States.
Patil Vijayakumar and Ors. Vs Union of India & Anr.(Kar) 151 ITR 48

Decision of High Court binding on Tribunal within its territorial jurisdiction.
Taylor Instrument Co.(India) Ltd Vs CIT (Del) 232 ITR 771
CIT Vs Mohan Lal Kansal (P & H) 114 ITR 583
Jorehaut Group Ltd. Vs ACIT (Gau) 289 ITR 422

Decision of High Court not binding on Tribunals outside its territorial jurisdiction.
Geoffrey Manners & Co. Ltd. Vs CIT (Bom) 221 ITR 695

Where there is only one decision of a H.C. on a particular point and there is no decision of any other H.C. contrary to that decision, Tribunal has to follow that view, not withstanding fact that its earlier Bench had taken a view contrary to that of H.C. on that point.
CIT Vs Godavridevi Saraf (Bom) 113 ITR 589
ITO Vs P.M. Suthar (ITAT, Ahd-TM), 53 ITD 1
Lakshmi Precison screws Ltd Vs DCIT (ITAT, Del) 59 ITD 295

Law declared by Supreme Court is binding on all courts including ITAT & CIT(A) and not Board's Circular contrary to it.
American Expresss Bank Ltd. Vs DCIT (ITAT, Mum) 65 ITD 67

Against similar decision of High Court, no appeal was preferred – Does not affect the appeal preferred in other cases, if public interest is involved
State, CBI Vs Sashi Balasubramanian (SC) 289 ITR 8

" Per incurium " defined – When an order is passed ignoring the provisions of the statute or binding precedents
CIT Vs B.R. Constructions (AP) 202 ITR 222

Compilations of case law: General Topics: JURISDICTION

JURISDICTION

Law to be applied is that in force in the Assessment Year unless otherwise provided expressly or by necessary implications.
Reliance Jute & Industries Ltd Vs CIT (SC) 120 ITR 921

For wealth-tax cases, law as it stood on first day of assessment year is applicable
CWT Vs S.A.P. Annamalai (Mad) 141 ITR 578

Penalty to be levied based on law as on date of committing default.
CIT Vs Onkar Saran and Sons (SC) 195 ITR 1
CIT Vs Gopi Ram Mulakh Raj (P & H) 178 ITR 680
CWT Vs Bhagwan Prasad Kanoi (Cal) 184 ITR 95
CIT Vs A. Mohd. Abdul Khader (Mad) 260 ITR 650

Proceedings for imposition of penalty can be initiated only after an assessment order has been made – who has the authority to impose penalty at that point of time, should remain the authority finally to impose penalty also.
Varkey Chacko Vs CIT (SC) 203 ITR 885.
CIT Vs Kausalya & others (Bom) 216 ITR 660

Circulars dated 4.10.69 and 18.9.72 on the same subject – A.Y. 1971-72 - Circular dated 04.10.69 is law applicable on the 1st day of AY – irrespective of accounting year followed.
CIT Vs Prasad Production P. Ltd. (Mad) 179 ITR 147
CIT Vs Jyoti Pictures (AP) 169 ITR 412

CBDT is not competent to give directions regarding the exercise of any judicial power by its subordinate authorities
J.K. Synthetics Ltd and Ors. Vs CBDT & Ors. (SC) 83 ITR 335

As per the address given on the return filed by assessee himself, jurisdiction over the case vests with an Assessing Officer – Notice u/s 143(2) issued by him but no objection raised against jurisdiction u/s 124(3) – Assessment valid
Ram Bhaj & Sons (P.) Ltd. Vs ITO (ITAT, Asr) 102 ITD 93

Assessment proceedings are quasi judicial in nature. While making assessments, ITO is solely to be guided by provisions of law and not instructions of CBDT.
Raja V.V.R.K. Yachendra Kumar Rajah of Venkatagiri Vs ITO & Anr. (AP) 70 ITR 772

Circulars cannot over-ride provisions of act – Circular giving concession can be withdrawn prospectively
State Bank of Travancore Vs CIT (SC) 158 ITR 102
Kerala Financial Corporation Vs CIT (SC) 210 ITR 129

Circular which is contrary to provisions of law is not binding on IT Offices.
Ambika Constructions Vs ITO & Ors. (Patna) 234 ITR 716
Delhi Flour Mills Co. Ltd. Vs CIT (Del) 95 ITR 151

Circulars issued by Company Law Board – Not binding on IT authorities
Stumpp, Schule and Somappa Ltd Vs CIT (Kar) 190 ITR 152

Circular issued by CBDT not binding on Court
CIT Vs Abhishek Industries Ltd. (P&H) 286 ITR 1
For AY 73-74, IAC was vested with jurisdiction to exercise his powers conferred upon him u/s 271(1)( c) irrespective of the fact that the order in question was passed after coming into force of the amendment taking away this right from IAC.
CIT Vs Kashi Prasad & Sons ( All ) 222 ITR 626

Tribunal setting aside assessment and remitting matter to ITO – ITO has jurisdiction to consider entire matters afresh.
CIT Vs D. Veerappan (Mad) 215 ITR 533
Nenmal Champalal Sha & Ors Vs CIT (Bom) 238 ITR 266
CIT Vs Highway Constructions Co.(P) Ltd (Gau) 223 ITR 498
Saheli Synthetics (P) Ltd. Vs ACIT (ITAT, Ahd) 57 ITD 65

There is no inherent right of appeal – It is to be specifically conferred by the statute providing for an appeal.
Caltex Ore Refining (India) Ltd. Vs CIT (Bom) 202 ITR 375.

High Court having jurisdiction over ITO who made the assessment can hear a reference arising out of the ITO's orders
CIT Vs Madanlal and Co. (Kar) 202 ITR 360
CIT Vs Parke Davis Ltd. (AP) 239 ITR 820
Suresh Desai & Associates Vs CIT (Del) 230 ITR 912

Letters addressed by CBDT to State Government –cannot be treated as Circular
CIT Vs Kerala Financial Corpn. Ltd,. (Ker) 155 ITR 246

Order transferring a file cancelled by High Court – Before High Court order, new Assessing Officer passed assessment orders – Not invalid – To be set-aside and remand to the Assessing Officer having jurisdiction.
ACIT Vs Shravan Mahipat Hedau (HUF) (ITAT, Amritsar) 62 ITD 70

Transfer of case from one Assessing Officer to another – Order u/s 127 necessary.
All India Children Care & Educational Dev. Society Vs JCIT (ITAT, All) 87 ITD 209

A wrong reference to the power under which an order is made does not per se vitiate the order if there is some other power under which the order could lawfully be made. The validity of the impugned order has to be tested by reference to the question whether the ITO had any power at all to make an order of this nature. If the power is otherwise established, the fact that the source of power has been incorrectly described would not make the order invalid.
VR.C.RM. Adaikkappa Chettiar Vs CIT (Mad) 78 ITR 285
R.P. Kandaswami & others Vs CIT (Mad) 49 ITR 344

If subsequent amendment enlarges time limit while period of limitation prescribed under old law has not expired, subsequent law will govern the proceedings.
Gujarat Forging (P) Ltd. Vs ITO (ITAT, Ahd) 56 ITD 208

Lack of jurisdiction will vitiate the proceedings rendering them and the orders passed therein as nullity.
Budlina Swain & others v. Gopinath Deb & Ors. AIR 1999 SC 2089

Existence of alternate remedy – Not a bar for writ
CIT Vs Foramer France (SC) 264 ITR 566
Carried on business at Delhi – Head Office at Delhi – Territorial jurisdiction vests with Assessing Officer at Delhi - Assessee challenged jurisdiction at Ghaziabad and requested CCIT, Kanpur to transfer file –specific order by CCIT, Kanpur is not necessary – Transfer order issued by CCIT, Delhi is valid. Since Assessing Officer at Delhi has territorial jurisdiction, 148 notice issued prior to file transfer order is valid.
Amulya General Trading & Agencies Ltd. Vs ACIT (ITAT, Del) 65 ITD 329.

Tribunal passing order u/s 260(1) to give effect to opinion of High Court – Subsequent decision of Full Bench of the same High Court in case of another assessee taking a different view – Tribunal has no power to implement decision of Full Bench.
Sasidhara Shenoy & Bros. Vs DCIT (Ker) 241 ITR 333.

Notification will come into operation as soon as it is published in official gazette.
Union of India Vs. Ganesh Das Bhojraj (SC) 244 ITR 691.
CIT Vs Haripal Singh (P&H) 224 ITR 147

Compilations of case law: General Topics: LIFTING OF CORPORATE VEIL

LIFTING OF CORPORATE VEIL

Dealings involving funds transfer to near and dear ones need to be looked into with care and caution and necessary inferences drawn if there are abnormalities attaching to such transactions.
Siddho Mal & Sons Vs CIT (Del) 122 ITR 839
CIT Vs Shekhawai Rajputana Trading Co.(P) Ltd. (Cal) 236 ITR 950
Workmen, Associated Rubber Industry Ltd. Vs Associated Rubber Industry Ltd. (SC) 157 ITR 77
Union of India & Ors. Vs Playworld Electronics P. Ltd. & Anr. (SC) 184 ITR 308
CIT Vs Indian Express Newspapers (Madurai) P. Ltd. (Mad) 238 ITR 70

Colourable devices are not part of tax planning
McDowell and Co. Ltd. Vs Commercial Tax officer (SC) 154 ITR 148

Assessee having deposit with company – At the instance of assessee credit transferred to a firm constituted by assessee's children – Return of sum by firm to company – company again transfer it to assessee's children – Not general loan transaction – Interest on deposits taxable in assessee's hands
S.P. Jaiswal etc. Vs CIT (SC) 224 ITR 619

IT Authorities are not bound to recognise a firm merely because the firm has been registered under the Partnership Act. If ITO finds on investigation that number of firms carrying on business under different names really belong to one and the same group of persons, he can hold it as not a genuine firm.
Ladhu Ram Taparia Vs CIT (SC) 44 ITR 521

Compilations of case law: General Topics: OPPORTUNITY OF BEING HEARD

OPPORTUNITY OF BEING HEARD
ITO issuing notice u/s.271(1)(a) – No explanation furnished by assessee – change of ITO – assessee not asking for opportunity to be heard by successor ITO – Imposition of penalty by successor ITO without giving assessee opportunity to be heard – Penalty valid.
CIT Vs Laljidas Agarwalla (Patna) 190 ITR 429
CWT Vs Gilliaram Suggiram (Patna) 186 ITR 445
CWT Vs Azizunnisa Begum (SC) 243 ITR 852

Change of incumbent of office during pendency of assessment proceedings – As per Sec.129, re-hearing by new officer is not obligatory – it is required only when there is a demand from assessee.
K. Venkata Ramana & Budha Appa Rao Vs CIT (AP) 168 ITR 747
CWT Vs Umrao Lal (All) 136 ITR 49

Opportunity to be heard afforded to major partner of firm – Amounts to opportunity to be heard given to firm.
Manaklal Porwal Vs CIT (Raj) 155 ITR 648

Assessee not availing of opportunities given before completion of assessment – Not entitled to allege contravention of principles of natural justice.
P.N. Baslasubramanian Vs ITO & Ors. (AP) 112 ITR 512

The principle of "audi alteram partem" only means that the party affected should be given sufficient opportunity to meet the case against him. It is not necessary that assessee should be heard at each and every stage of proceedings – when an appeal was filed before AAC, ITO's orders merges with order of AAC and where there is no grievance that no opportunity was given by AAC, he cannot have a grievance that he was denied reasonable opportunity by ITO.
Kashmir Vastralaya Vs CIT (Pat) 112 ITR 630

ITO is not bound by any technical rules of the law of evidence – He can record statement from witnesses in the absence of assessee – But before using the same, assessee should be given opportunity to cross –examine.
C. Vasantal & Co. Vs CIT (SC) 45 ITR 206

Firm dissolved - Penalty notice issued to one of the partners – is sufficient notice – Individual notice on every partner is not necessary.
India Chemical Agency Vs CIT (Mad) 119 ITR 569

For every reason formulated by ITO in his order, no need to give opportunity to produce fresh evidence or fresh explanation.
Newton Chikli Collieries Ltd. Vs CIT (SC) 44 ITR 495
DCIT Vs Subhash Kumar Jain (ITAT, Chd) 69 ITD 313

Right to cross –examine witness who made adverse report, is not an invariable attribute of requirement of 'audi alteram parterm' - When statement of witness is only secondary evidence, there is no denial of natural justice if witnesses were not allowed to be cross-examined by assessee.
G.T,.C. Industries Limited Vs ACIT (ITAT, Bom) 65 ITD 380

Suit against Public Officer in respect of act done under warrant of authorization – opportunity to be granted to Public Officer before granting relief – notice mandatory
Union of India v. Natwarlal M. Bandari (Guj) 250 ITR 641

Simply because an opportunity of being heard was not given to the assessee, will not invalidate an assessment order – It is only a procedural lapse
Kailash Moudgil Vs DCIT (ITAT, Del-SB) 72 ITD 97

If assessee is aware of the contents of the statements recorded from witnesses, failure to provide copies of the same before cross-examination, is not fatal – Addition on account of inflation of purchase price upheld
H.M. Sarif and Sons Vs CIT (All) 296 ITR 523

Non-furnishing of copy of statement given by production-in-charge did not amount to denying opportunity of cross examination to assessee, especially when the addition was made solely on the basis of return filed, documents produced and submissions made by assessee.
DXN Herbal Mfg. (India)(P.) Ltd. Vs ITO (ITAT, Chennai) 110 ITD 99

Compilations of case law: General Topics: PROCEDURAL LAPSE – When fatal ?

PROCEDURAL LAPSE – When fatal ?

A wrong reference to the power under which an order is made does not per se vitiate the order if there is some other power under which the order could lawfully be made. The validity of the impugned order has to be tested by reference to the question whether the ITO had any power at all to make an order of this nature. If the power is otherwise established, the fact that the source of power has been incorrectly described would not make the order invalid.
VR.C.RM. Adaikkappa Chettiar Vs CIT (Mad) 78 ITR 285
R.P. Kandaswami & others Vs CIT (Mad) 49 ITR 344
CIT Vs Hargopal Balan & Sons (P &H) 82 ITR 243
L. Hazir Mal Kuthiala Vs ITO & Anr. (SC) 41 ITR 12
CIT Vs Motor Industries Co. (Kar) 229 ITR 126
K.P. Paulose & Co. Vs CIT (Ker) 230 ITR 798

Non-mention of Section under which statement of assessee is recorded will not invalidate statement recorded during course of proceedings u/s.132A.
ACIT Vs M.V. Nagaraja (ITAT, Bang) 70 ITD 318

Failure to mention specific provision under which interest is charged does not make the order bad.
CIT Vs Quality (Pat) 224 ITR 77

Assessment completed without following prescribed procedure – Non-compliance is only a procedural irregularity and will not render the assessment ab initio void – Direction to ITO to redo assessment after following prescribed procedure is valid
G.R. Steel and Alloys P. Ltd,. Vs CIT (Kar) 152 ITR 220
Saraljit Singh Vs CIT (Del) 234 ITR 641
V. Raju Vs CIT (Mad) 147 ITR 212
M.S. Kimtee Vs CIT (MP) 151 ITR 73

Assessee participating in reassessment proceedings – Failure to consider objection to 148 notice and failure to issue notice under section 143(2) – Reassessment order not void but irregular – Matter remitted to assessing Officer
Areva T & D India Ltd. Vs ACIT (Mad) 294 ITR 233

Penalty proceedings validly initiated – No opportunity of being heard given – Order set-aside – Continuation of proceedings from stage of notice – valid
Guduthur Bros Vs ITO (SC) 40 ITR 298
Thakur V. Hari Prasad Vs CIT (AP) 167 ITR 603
Addl. CIT Vs Boina Surana (AP) 124 ITR 328

Where an invalid assessment is annulled, it should be remanded to the ITO so that the assessee is not set at large without payment of tax
CIT Vs Anaimugan Transports (P) Ltd. (Mad) 215 ITR 553

Death of assessee in course of assessment procedure – Legal representative impleaded and heard – Assessment order mentioning name of deceased assessee instead of legal heir – Only a clerical error – Assessment is valid
Swaran Kanta Vs CIT (P & H) 176 ITR 291

Assessment order passed without giving notice to assessee – Assessment only legally vitiated but not warranting annulment.
C.G.G. Panicker Vs CIT (Ker) 237 ITR 443
Notice to only one legal representative of deceased – No objection taken by him and other legal representatives against non-impleadment of other heirs – assessment so made is valid.
ITO Vs Shahid Atiq, L/H of Late Atiquer Rehman (ITAT, Del) 89 ITD 489
CIT Vs Chandra Mohan Verma (All) 244 ITR 430
CIT Vs Pushpa Devi (Raj) 250 ITR 495
A.K.M. Govindaswamy Chettiar & Ors. Vs ITO ( Mad ) 244 ITR 559

Assessment order against deceased passed after his death – His son, with an advocate appeared in the proceedings – Assessment set-aside to ITO for impleading the legal heirs
CIT Vs Roshan Lal & Ors. (Del) 134 ITR 145

Penalty u/s 271(1)( c) quashed by CIT(A) as ITO had not obtained approval of IAC – ITAT directed ITO to pass an order afresh in accordance with law – held ITAT was justified.
Prabhudayal Amichand Vs CIT ( M P ) 180 ITR 84
CIT Vs Vijay Dal Mills (MP) 230 ITR 301
Gayathri Textiles Vs CIT (Kar) 243 ITR 674
Sardar Harinder Singh Vs ITO & Ors. (All) 219 ITR 257
CIT Vs Damodardas Murarilal (AP) 222 ITR 401

Act does not contemplate a hearing being given to the assessee by IAC before approving the penalty.
Lachmandas Mahar Chand Vs ITAT (Lahore) 12 ITR 432.

Office note is part of assessment order
Bimla Gulati Vs Appellate Asst. Commissioner (MP) 165 ITR 296

Computation of Total income made in assessment order and tax computed only on ITNS 50 – valid.
CIT Vs Hotel Highland Park (J&K) 246 ITR 130

Determination of tax not incorporated in assessment order but on a separate sheet of paper accompanying it – forms part of assessment order
Karuna Rani Jain & Ors. Vs CIT (P&H) 178 ITR 321
Kalyankumar Ray Vs CIT (SC) 191 ITR 634
Shashi Mangla Vs ACIT (ITAT, Del ) 60 TTJ 362

Notice issued u/s.148 vague as 'status' not mentioned therein – Assessee consciously and intentionally waived his right to object to defect in notice – Defect stood caused by sec.292 B – notice valid
CIT Vs Rajbir Singh (P & H) 233 ITR 126

Mere mistake in language used in penalty notice and non-striking of the inapplicable portion cannot by itself invalidate the notice.
CIT Vs Kausalya and others (Bom) 216 ITR 660
H.P. State Forest Corpn. Ltd. Vs CIT & Ors. (HP) 267 ITR 285
CIT Vs Maharaj Kishan (Del) 246 ITR 327

Penalty notice served along with an enclosure – Enclosure signed by ITO but notice not signed – Penalty not vitiated – There is nothing to indicate that the assessee was prejudiced by the defective notice served on him.
Kashmir Vastralaya Vs CIT (Pat) 112 ITR 630

Failure to serve Demand Notice – Recovery proceedings – not valid
Mohan Wahi Vs CIT & Ors. (SC) 248 ITR 799
Original assessment allowing development rebate – AAC set-aside whole assessment order – During fresh assessment proceedings, information that machinery was sold within 10 years – Development rebate can be rejected straight away – No need to allow it first and cancel u/s.35(11).
Indian Motors Transport P. Ltd Vs CIT & Ors. (SC) 156 ITR 489

Failure to quantify amount of penalty in the order – will not invalidate order
Assam Frontier Veneer & Saw Mills Vs CIT (Gau) 104 ITR 479
CIT Vs Jayantilal Meghani (Cal) 244 ITR 468

Office copy of notice available in assessment records – show notice validly issued by Assessing Officer – No evidence for proper service of such notice – Illegality occurred at this stage – Assessing Officer can proceed further from this stage
Raju Saigal Vs ITO (ITAT, Del) 106 Taxman (Mag) 12.

Death of assessee – Notice issued in the name of a person who was dead – widow of such person participating in re-assessment proceedings. Defect in notice stood automatically cured.
Kausalyabai Vs CIT (MP) 238 ITR 1008

Non-service of assessment order before serving of demand notice would not invalidate assessment order.
Surya Proteins Ltd. Vs ACIT ( ITAT, Indore ) 56 ITD 367

After abolition of Sec. 144B, Assessing Officer passed order after getting approval of Deputy Commissioner – Only a procedural lapse - Does not make assessment order invalid.
Amulakhbhai R.Patel Vs ACIT (ITAT, Ahd) 68 ITD 434

Penalty proceedings conducted by IAC – IAC directed ITO to levy penalty and to issue Demand Notice - Penalty valid
A.M. Shah & Co. Vs CIT (Guj) 238 ITR 415

Omissions of Assessing Officer to confront assessee with materials collected by him – Irregularity in exercise of jurisdiction and not lack of jurisdiction – Remand to Assessing Officer
CIT Vs Bharatkumar Modi (Bom) 246 ITR 693

Calling for information u/s.133(6) without approval of CIT – Procedural lapse – curable defect – Still material obtained can be used.
Gyarsri Lal Gupta & Sons Vs ITO (ITAT, JP) 94 ITD 329.

Expl. 3 to sec. 153 – Direction by CIT(A) to initiate re-assessment proceedings against third person – Such person was aware of proceedings and given opportunity of being heard – Formal notice not necessary – Proceedings valid
Atul Traders Vs ITO ( All ) 282 ITR 536

Assessment order in the name of non-existent entity was passed on account of ignorance of fact of amalgamation. Irregularity only – Remit to Assessing Officer to issue notice in the name of successor company
Century Enka Ltd. Vs DCIT ( Mum ) 101 ITD 489
144 Asst – Registration cancelled without affording opportunity – Not justified - Matter restored to Assessing Officer for considering afresh.
Indotia Construction Co. Vs ITO (ITAT, Jp) 61 TTJ 398

Compilations of case law: General Topics: ESTOPPEL – Whether applicable

ESTOPPEL – Whether applicable

The doctrine of promissory estoppel cannot be used to compel the Government to carry out any representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government.

Delite Cinema Vs Municipal Corporation of Delhi & Anr. (Del) 172 ITR 208

CIT Vs Bankam Investment Ltd. (Cal) 208 ITR 208

Union of India & Ors. Vs Godfrey Philips India Ltd. (SC) 158 ITR 574

Tribunal upheld reopening u/s 147 and on merits remitted to Assessing Officer – Assessing Officer passed subsequent order – Question of validity of reopening u/s 147 cannot be challenged again in subsequent proceedings.

Gowri Rajes & ors. Vs CIT (Mad) 241 ITR 506

M.S.P. Senthil Kumar Vs CIT (Mad) 241 ITR 502

Court decisions based on concession of parties do not constitute binding precedents for other authorities.

Lakshmi Shankar Srivastava AIR 1979 SC 451

The doctrine of " approbate and reprobate " is a species of estoppels. It applies to the conduct of parties. The assessee having opted for a scheme and having availed the benefit, cannot lateron claim that the benefit was wrongly conferred on it.

CIT Vs V. MR. P. Firm (SC) 56 ITR 67

Compilations of case law: General Topics: AFFIDAVIT – How far reliable ?

AFFIDAVIT – How far reliable ?

Affidavit need not always be accepted as correct
Sri Krishna Vs CIT (All) 142 ITR 618

Affidavit says "notice send by registered post on 31.8.88"- Not denied in rejoinder affidavit –Fact of issuing notice accepted eventhough no evidence was produced.
Arjun Singh & Anr. Vs ADIT & Ors. (MP) 246 ITR 363

Compilations of case law: General Topics: STATEMENTS RECORDED – USE IN ASSESSMENT & RETRACTION

STATEMENTS RECORDED – USE IN ASSESSMENT & RETRACTION

Authorised Officer can record statement on oath on all matters pertaining to suppressed income – Explanation to Sec. 132 inserted w.e.f. 1.4.89 is clarificatory- Assessment on the basis of the voluntary statement was valid
V. Kunhambu & Sons Vs CIT (Ker) 219 ITR 235
Iswardin Mewalal Vs CIT (MP) 169 ITR 584
Greenview Restaurant Vs CIT (Gau) 263 ITR 169

Presumption u/s 132(4) is applicable to the assessment proceedings also
P.R. Metrani Vs CIT (SC) 287 ITR 209

Addition made on the basis of admission by assessee – justified.
Hira Singh and Co Vs CIT (HP) 230 ITR 791

Where the petitioner entered into a voluntary settlement with the Government and his liability to pay tax arose from such settlement, he cannot question the settlement – unless and until he can establish that his consent was improperly procured.
Dewan Bahadur Seth Gopal Das Mohta Vs The Union of India & Ors.(SC) 26 ITR 722

An admission is the best evidence that an opposing party can rely upon and though not conclusive, is decisive of the matter, unless successfully withdrawn or proved erroneous.
Narayan Bhagwantrao Gosavi Batajiwale Vs Gopal AIT 1960 SC 100
Pranav Construction Co. Vs ACIT (ITAT, Mum) 61 TTJ 145

Preliminary statement recorded before start of actual search in which questions put to assessee were general in nature and not related to any specific asset / document – Not a valid legal statement – cannot be relied upon. Second statement during search – valid – could not be ignored
Rishab Kumar Jain Vs ACIT (ITAT, Del) 63 TTJ 236

Customs Officials are not Police Officers. The confession through retracted, is an admission and binds the petitioner.
Surjeet Singh Chhabra v. Union of India AIR 1997 SC 2560

In statement u/s 132(4), assessee never indicated about receipt of agricultural income outside the books – Later on assessee cannot change stand.
Jaikisan R. Agarwal Vs ACIT (ITAT, Pune) 66 TTJ 704

In a case where party relied on self-serving recitals in documents it was for the party to establish the truth of these recitals. - The taxing authorities were entitled to look into the surrounding circumstances and find out the reality of such recitals.
CIT Vs Durga Prasad More (SC) 82 ITR 540

For retraction to be valid, threat or coercion has to be proved .
Manharlal Kasturchand Chokshi Vs ACIT (ITAT, Ahd) 61 ITD 55
Param Anand Builders Vs ITO (ITAT, Mum) 59 ITD 29
Works of Art (P) Ltd, Vs ACIT (ITAT, Jp) 65 ITD 40
Amritlal Bhagwandas Soni Vs DCIT (ITAT, Ahd) 59 TTJ 418
Hiralal Maganlal & Co. Vs DCIT (ITAT, Mum) 96 ITD 113

Addition on the basis of stock statement given to Bank – valid.
Coimbatore Spinning & Weaving Co. Ltd. Vs CIT (Mad) 95 ITR 375
CIT Vs Ashok Textiles (P) Ltd. (Ker) 141 ITR 785
Great Indian Textiles Vs DCIT (ITAT, Cochin) 58 TTJ 123
God Granites Vs ITO (ITAT, Bang) 65 ITD302
Tip Top Plastic Industries P. Ltd. Vs ITO (Mad) 214 ITR 778
Kaila Sweet Supplier Vs CIT (All) 100 Taxman 59
S. Murugappa Chettiar Vs CIT (Ker) 174 ITR 245
Ramanlal Kacharulal Tejmal Vs CIT (Bom) 146 ITR 368

Valuation done by qualified engineers for LIC and loan advanced by LIC on that basis – AO can rely on such valuation report.
G. Anirudhan Vs ACIT (ITAT,Cochin) 60 TTJ 49

When statement was made voluntary and was not alleged to have been obtained under threat or coercion, onus was on assessee to prove that said declaration was made under any misconception of facts – Since assessee had not taken any steps to rectify its declaration before authorities before whom such declaration was made, there was no valid reason for retraction of same after a gap of about two and a half months
Carpenters Classics (Exim) (P) Ltd. Vs DCIT ( ITAT, Bang ) 108 ITD 142

Compilations of case law: General Topics: SERVICE OF NOTICE

SERVICE OF NOTICE

Notice in the name of Company received by Director – Attended further proceedings – Later on cannot challenge validity of service of notice.
Southern Plantations Ltd.Vs Commissioner of Agrl. IT (Ker) 236 ITR 509

Chartered Accountant representing assessee received notice and assessee ratified receipt of notice – Estoppel from challenging service of notice on Chartered Accountant.
Y. Rajendra, DCIT Vs Khoday Eshwarsa & Sons & Ors. (Kar) 272 ITR 448

Notice served on assessee's husband – Assessee participating in proceeding – valid service
CIT Vs Kanti Devi Gupta (MP) 274 ITR 526
CIT Vs Uttam Chand Nahar (Raj) 295 ITR 403

Notice served on the father of the assessee who was also the Managing Partner of the firm in which assessee is a partner – Service valid
Latha Chandy Vs CIT (Ker) 260 ITR 385

Notice by affixture – No objection to mode of service of notice – Assessee participating in proceedings before Assessing Officer and CIT(A) – Irregularity in notice waived by assessee - assessment valid.
CIT Vs Premium Capital Market & Investment Ltd (MP) 275 ITR 260

Notices dispatched by Registered Post – Either not received back or received back with endorsement "refused" – Deemed service
Ramesh Khosla Vs ITO & Anr. (P&H) 155 ITR 556

Notice send by speed post – Quite reasonable to infer that it was served within 3-4 days
Capital Gem Overseas (P) Ltd. Vs ITO ( ITAT, Del ) 101 ITD 117

Service of notice on agent – Different persons have acted in the past in absence of power agent to receive notices – Service on one such person – Notices were complied with – Assessee raised no objection before ITO – such service constitute valid service.
A.K. M. Govindaswamy Chettiar & Ors.Vs ITO (Mad) 244 ITR 559
X vs. ITO (ITAT, Bang) 9 ITD 715
CIT Vs Regency Express Builders P. Ltd. (Del) 291 ITR 55

Receipt of notice by employee who endorsed his acknowledgement under the seal of firm – Valid service
M.X. De Nornha & Sons Vs CIT (All) 18 ITR 928

Though the notice sent to assessee firm was served on a person who was not a partner of assessee firm, it is valid as the assessee failed to establish that such person was a stranger and was not concerned with day-to-day business of the firm.
Salar Publications Trust Vs ITO & Anr. (Kar) 235 ITR 13

Assessee for the first time filed affidavit before ITAT in which it denied receipt of notice under section 143(2) – ITAT erred in placing reliance on such belated affidavit – Presumption of service of notice not successfully rebutted by assessee.
CIT Vs Vins Overseas India Ltd (Del) 165 Taxman 95
Burden on assessee to prove that there was no service of notice under section 143(2) within time
CIT Vs Shanker Lal Ved Prakash (Del) 300 ITR 243

"Forwarding" of draft assessment order – date on which it was given to process-server or delivered at post office or handed over to representative of assessee.
CIT Vs Shahzadi Begum (AP) 225 ITR 963.

Compilations of case law: General Topics: STAY ORDERS

STAY ORDERS

To grant interim relief straightaway will jeopardize public interest.
Union of India & Ors. Vs Oswal Woollen Mills Ltd. (SC) 154 ITR 135
Assistant Collector of Central Excise Vs Dunlop India Limited & Others (SC)154 ITR 172

Only when strong prima facie case is made out, in deserving and appropriate cases, Tribunal should grant stay.
ITO Vs M.K. Mohammed Kunhi (SC) 71 ITR 815
Khivraj Motors Ltd. Vs DCIT & Ors. ( Mad ) 205 ITR 462
Sri Balaji Trading Co. Vs DCIT & Anr. (Mad) 175 ITR 428

Non-compliance of Tribunal's direction was a clear act of contempt of court – extension of stay sought after stay granted expired – Application needs to be rejected.
Endeavour Investments Ltd. Vs DCIT (ITAT, Mad – TM) 70 ITD 17
Roxy Eng. P. Ltd. Vs ACIT ( ITAT, Chd ) 68 TTJ 482

No early hearing when demand is not huge – Bench has to order early hearing.
Olympia Paper & Stationery Stores Vs ACIT (ITAT, Mad) 63 ITD 148

Stay Petition moved by Public Sector undertakings – COD permission necessary.
Transmission Corpn. Of A.P. Ltd. Vs ACIT (ITAT, Hyd) 97 ITD 171

Demand for several assessment years – separate stay petition necessary.
Wipro Ltd.Vs ITO (ITAT, Bang) 86 ITD 407.