SURAT DIST COOP SPINNING MILLSLTD vs. COMMISSIONER OF INCOME TAX

ITR/182/1986HC GujaratGJHC24010806198610 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryRemanded

What were the facts?

This case involves an Income Tax Reference filed by Surat Dist Coop Spinning Mills Ltd. (the assessee) against the Commissioner of Income Tax (the revenue). The reference was made at the instance of the assessee to the High Court of Gujarat at Ahmedabad, seeking the court's opinion on three questions of law framed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'B'. The questions pertained to the applicability of certain Supreme Court decisions regarding deductions under Section 80J, the order of statutory deductions, and the Commissioner's jurisdiction under Section 263. The High Court heard arguments from both sides and noted that the Supreme Court had rendered decisions on similar questions during the pendency of the reference.

What did the High Court hold?

The High Court, per Mr. Justice A.R. Dave, disposed of the reference by answering all three questions in the affirmative, in favour of the revenue and against the assessee. For the first and second questions, the Court relied on the Supreme Court's decision in Commissioner of Income Tax v. Kotagiri Industrial Co-operative Tea Factory Ltd., 224 ITR 604, which addressed similar issues. The Court found that the Supreme Court's ruling on these matters was binding and directly applicable, leading to the conclusion that the Tribunal's stance on the applicability of precedents and the order of deductions was correct. Regarding the third question, the Court cited the Supreme Court's opinion in Commissioner of Income Tax v. Shri Arbuda Mills Ltd., 231 ITR 50, which held that the Commissioner retains jurisdiction under Section 263 even when the assessment order is under appeal. Consequently, the High Court affirmed the Commissioner's jurisdiction. No costs were awarded.

What were the issues?

The Tribunal referred three questions for the High Court's opinion: 1. Whether the Tribunal was correct in holding that the case of Cloth Traders Co. (P) Ltd. was not applicable because it dealt with Sections 80M, 80K, 80MM, and 80N, but not Section 80J, while relying on Cambay Electricity Co. Ltd., which also did not deal with Section 80J but only Section 80E. The assessee contended that both cited cases were distinguishable, and the Tribunal's reasoning was flawed. The revenue's contentions are not recorded. 2. Whether the Tribunal erred in not holding that relief under Section 80J must be allowed first, in preference to statutory deductions under Sections 32(2), 33, or 72, from the gross total income which included profits from a new industrial undertaking. The assessee argued for the preferential treatment of Section 80J relief. The revenue's contentions are not recorded. 3. Whether the Tribunal was correct in holding that the Commissioner of Income Tax had jurisdiction to initiate proceedings under Section 263, even though the assessment order was subject to appeal. The assessee questioned the Commissioner's jurisdiction. The revenue's contentions are not recorded.

Which sections of the Income-tax Act were involved?

Section 256,Section 80M,Section 80K,Section 80MM,Section 80N,Section 80J,Section 32,Section 33,Section 72,Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 182 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO

The order continues below.

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