COMMISSIONER OF INCOME-TAX vs. JETHALAL BHOGILAL SHETH

ITA/210/1998HC GujaratGJHC24024248199823 September 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE ANIL R. DAVE3 pages
AI SummaryDismissed

What were the facts?

The Revenue sought a direction from the High Court under Section 256(2) of the Income-tax Act, 1961, to the Income Tax Appellate Tribunal (ITAT) to forward a statement of case. The ITAT, in its order dated 25.10.1996, had directed the Assessing Officer (AO) to tax the assessee, Jethalal Bhogilal Sheth, with Rs. 3,85,654 in the year under consideration. The ITAT also stated that the AO would be at liberty to take necessary action against the assessee or concerned persons for the taxability of the remaining amount in the appropriate year. The Revenue's application to the High Court was based on the contention that the ITAT's direction regarding the remaining amount was neither specific nor did it specify the year of taxability.

What did the High Court hold?

The High Court held that the ITAT's observation that the AO would be at liberty to take necessary action against the assessee or concerned persons for the taxability of the remaining amount in the appropriate year was not a direction. The Court reasoned that if the law empowers an authority to take necessary action, it should be left to that authority to act in accordance with law and within its powers. The observation merely recognized the AO's existing power to take such steps as were permissible under the law. Therefore, no question of law arose from this observation, as it was proper and the AO could have taken such action even without it. The application for a direction to the ITAT was rejected.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the direction given to the assessing officer to tax the assessee with Rs. 3,85,654 in the year under consideration, and the liberty granted to take necessary action for the remaining amount in the appropriate year, was neither a specific finding nor a direction regarding the year of taxability? (Question of law and fact, turning on the interpretation of the ITAT's order and the AO's powers). Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The Revenue argued that the ITAT's observation regarding the AO's liberty to take action for the remaining amount was a direction, and it lacked specificity regarding the year of taxability, thus raising a substantial question of law.

Which sections of the Income-tax Act were involved?

Section 256(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX APPLICATION No 210 of 1998

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? Yes

2.

To be referred to the Reporter or not? No 3. Whether Their Lordships wish to see the fair copy of the judgement? No 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? No 5. Whether it is to be circulated to the Civil

The order continues below.

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