COMMISSIONER OF INCOME TAX vs. SUNDER SHYAM TRUST

ITR/68/1997HC GujaratGJHC24020232199711 March 2008Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MR. JUSTICE Z.K.SAIYED3 pages
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What were the facts?

This case involves an Income Tax Reference filed by the Commissioner of Income-tax (the revenue) against Sunder Shyam Trust (the assessee) concerning assessment years 1984-85 and 1985-86. The reference was made by the Income-tax Appellate Tribunal, Ahmedabad Bench 'A', at the instance of the revenue, presenting two questions for the High Court's opinion. The revenue was represented by Mr. B.B. Naik, while the assessee, though served, did not appear. The revenue's counsel drew the court's attention to a previous judgment by the same High Court in Commissioner of Income Tax Vs. Sinivali Trust, which dealt with identical issues for similarly situated trusts.

What did the High Court hold?

The High Court answered both referred questions in the affirmative, in favour of the assessee and against the revenue. The Court's decision was based on its prior judgment rendered on 11.02.2004 in Commissioner of Income Tax Vs. Sinivali Trust (I.T.R. No.67 of 1997) and cognate matters. For the reasons stated in that judgment, the Tribunal was held to be right in directing the Assessing Officer to charge tax at the normal rate instead of the maximum marginal rate. Furthermore, the Tribunal was also deemed correct in directing the deletion of interest charged under Section 217 of the Act. The reference was disposed of accordingly, with no order as to costs. No issues were expressly left undecided.

What were the issues?

The Tribunal had to decide two questions of law and fact, referred by the Income-tax Appellate Tribunal at the instance of the revenue: 1. Whether the Appellate Tribunal was correct in directing the Assessing Officer to charge tax at the normal rate instead of the maximum marginal rate, concerning Section 164 of the Income-tax Act, 1961. 2. Whether the Appellate Tribunal was correct in deleting the interest charged under Section 217 of the Income-tax Act, 1961. The revenue argued that the Tribunal's directions were incorrect. The assessee's contentions are not recorded as they did not appear. The revenue relied on the High Court's judgment in Commissioner of Income Tax Vs. Sinivali Trust (I.T.R. No.67 of 1997) and cognate references, which dealt with identical questions for similarly situated trusts.

Which sections of the Income-tax Act were involved?

Section 256,Section 164,Section 217

AI-generated summary — verify with the full judgment below

ITR/68/1997 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.68 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE Z.K.SAIYED ===================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether

this case

involves

a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO ===================================================== COMMISSIONER OF INCOME TAX - Applicant(s) Versus SUNDER SHYAM TRUST - Respondent(s) =================================================== Appearance : MR BB NAIK for Applicant(s) : 1, SERVED BY RPAD - (N) for Respondent(s) : 1, =================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 11/03/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) (1) The I

The order continues below.

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