COMMISSIONER OF INCOME TAX CENTRAL KANPUR vs. J.K. CHARITABLE TRUST KAMAL TOWER, KANPUR

CIVIL APPEAL No. 2092/2006Supreme Court[2008] 15 S.C.R. 95807 November 2008Bench: 3 JudgesAuthor: ARIJIT PASAYAT, C.K. THAKKER, LOKESHWAR SINGH PANTA10 pages
AI SummaryDismissed

What were the facts?

The appeals before the Supreme Court concerned the Commissioner of Income Tax (Revenue) challenging High Court judgments that favored the assessee, J.K. Charitable Trust. The dispute revolved around whether the trust was hit by provisions of Section 13(1)(c) and 13(2)(a), (f), & (h) of the Income Tax Act, 1961, thus disqualifying it from exemption under Section 11. The assessment years in dispute included 1972-73 (re-assessment under Section 147(1)) and 1975-76 to 1982-83. The Revenue argued that each assessment year is a separate unit and factual scenarios must be examined. The assessee pointed out that for numerous subsequent assessment years (1983-84 to 2007-08) and even for the year reported in 1992 (196) ITR 31, the Revenue had not filed appeals, despite identical factual positions. The Revenue contended that non-filing of appeals for some years does not preclude them from filing for others.

What did the Supreme Court hold?

The Supreme Court dismissed the appeals. The Court acknowledged that while res judicata does not apply to different assessment years, courts generally adhere to earlier pronouncements on law or fact unless there's a new ground or material change in facts. The principle of precedent dictates consistency. The Court noted that the Revenue may have valid reasons for not filing appeals in certain cases, such as a small amount of revenue involved or a revenue-neutral decision, which can provide a foundation for departure. However, the Court emphasized that the Revenue cannot file an appeal in one case while deciding not to file in another without a just cause. In the present case, it was accepted by the Revenue that the fact situation in all the assessment years under consideration was the same. Therefore, the question of whether a change in factual situation would permit an appeal despite non-filing for other years was academic. The Court found that merely because appeals were not preferred in some cases does not operate as a bar if there is a just cause or it is in public interest, or for a pronouncement when divergent views exist. However, given the undisputed identical factual situation for all years, the Revenue's appeal was deemed without merit.

What were the issues?

1. Whether the Revenue is precluded from filing an appeal for certain assessment years involving an identical dispute, when it has not preferred appeals for other assessment years with the same factual position? (Question of law, concerning the principles of precedent and the Revenue's conduct in litigation). Assessee's Contentions: - The Revenue had not filed appeals for a significant number of assessment years (1983-84 to 2007-08) where the factual position was identical to the current dispute. - No appeal was filed even against the High Court's decision reported in Commissioner of Income Tax v. J.K. Charitable Trust (1992 (196) ITR 31). - Several other High Courts had taken a similar view, and the Revenue had not appealed those decisions (e.g., CIT, Bombay City VII v. Trustees of the Jadi Trust, CIT v. Hindusthan Charity Trust, CIT v. Sarladevi Sarabhai Trust No.2, CIT v. Nirmala Bakubhai Foundation). - Reliance was placed on the principle that without a just cause, the Revenue cannot file an appeal in one case while deciding not to file in another, citing Karamchari Union v. Union of India and Union of India v. Kaumudini Narayan Dalal. Revenue's Contentions: - Each assessment year is a separate unit, and the factual scenario must be examined for each. - Non-filing of an appeal for some assessment years does not create a bar for filing an appeal for other assessment years, citing C.K. Gagadharan & Anr. v. Commissioner of Income Tax (SC).

Which sections of the Income-tax Act were involved?

Section 11,Section 13(1)(c),Section 13(2)(a),Section 13(2)(f),Section 13(2)(h),Section 147(1),Section 256(1)

AI-generated summary — verify with the full judgment below

(2008] 15 S.C.R. 958 A COMMISSIONER OF INCOME TAX CENTRAL KANPUR B v. J.K. CHARITABLE TRUST KAMAL TOWER, KANPUR (Civil Appeal No. 2092 of 2006) NOVEMBER 7, 2008 [DR. ARIJIT PASAYAT, C.K. THAKKER AND LOKESHWAR SINGH PANTA, JJ.] Income Tax Act, 1961 - Revenue not preferring appeal C in· respect of some assessment years involving identical dispute - Filing of appeal for other assessment years - Permissibility of - Held: Role of Revenue in such cases exp/f!!ifl.ef4-:-However, in the fact situation filing of appeal by D Rev.,.w;u.e- not permissible . .....

The question which arose for consideration in these appefils was whether the revenue can be precluded from filing an appeal Q.ven though in respect of some other years involving identical dispute no appeal is filed. E Dismissing the appeals, the Court HELD: If the assessee takes the stand that the Revenue acted ma/a fide in not preferring appeal in one case and filing the appeal in other case, it has to establish F malafides. As a matter of fact, there may be certain cases where because of the small amount of revenue involved, no appeal is filed. Policy decisions have been taken not to prefer appeal where

The order continues below.

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