COMMISSIONER OF INCOME-TAX vs. LEENABEN A SARABHAI

ITR/219/1994HC GujaratGJHC24020295199420 July 2006Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.S.GARG5 pages
AI SummaryRemanded

What were the facts?

This case involves an Income Tax Reference made by the Income-tax Appellate Tribunal (Tribunal) at the instance of the Revenue (Commissioner of Income-tax) against an order concerning the respondent-assessee, Leenaben A. Sarabhai. The reference pertains to assessment years not explicitly stated but relates to an earlier order of the Tribunal dated 12.10.1979 in ITA No. 404/Ahd./78-79 for assessment year 1974-75. The Revenue's contention is that the Tribunal and the Commissioner (Appeals) relied on this earlier order to hold that certain items, once deleted from tax, could not be included for taxation or for reopening assessment under Section 147(b). However, this earlier Tribunal order was based on a High Court Reference (ITR No. 351/80) which was subsequently decided in favour of the Revenue and remitted back to the Tribunal. The High Court's judgment in that matter is reported in [1988] 171 ITR 86.

What did the High Court hold?

The High Court held that the very foundation for deciding the questions referred to it was lost due to the High Court's earlier decision in [1988] 171 ITR 86, which had set aside the Tribunal's order relied upon by the parties. Consequently, the Court did not answer the specific questions referred. Instead, it set aside the order passed by the Tribunal and remanded the matter back to the Tribunal with a direction to decide it afresh in light of the earlier High Court decision that had remitted the matter. The operative direction is to remand the matter to the Tribunal for fresh disposal. No issue was expressly left undecided, as the Court chose not to answer the referred questions at this stage.

What were the issues?

The Tribunal had to decide three questions of law referred by the Revenue: 1. Whether the Tribunal was right in law in concluding that the Income-tax Officer lacked the authority to reopen the assessment under Section 147(b) of the Income Tax Act. 2. Whether the Tribunal erred in not considering if the reassessment made by the Income-tax Officer was justified under the provisions of Section 263 of the Act. 3. Whether the Tribunal was right in law in concluding that the provisions of Section 2(47) and Section 52(2) of the Act were not required to be considered in determining the appeal. The Revenue argued that the Tribunal's reliance on its earlier order (dated 12.10.1979) was misplaced because that order was set aside by the High Court in a reference ([1988] 171 ITR 86), which remitted the matter back to the Tribunal. The Revenue contended that the foundation for the Tribunal's decision against them was lost. The judgment records no arguments from the respondent-assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 147(b),Section 263,Section 2(47),Section 52(2)

AI-generated summary — verify with the full judgment below

ITR/219/1994 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 219 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 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 ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME-TAX - Applicant(s) Versus LEENABEN A SARABHAI - Respondent(s) ========================================================= Appearance : MR BB NAIK for Applicant(s) : 1, None for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 20/07/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG)

ITR/219/1994 2/5 JUDGMENT

1.

Heard Mr. B.B. Nayak, learned co

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →