COMMISSIONER OF INCOME-TAX vs. KINNARY FAMILY TRUST,
What did the High Court hold?
The High Court accepted the submissions made by the learned counsel for both parties. It held that the orders passed by the Tribunal in each of the cases (ITRs 101, 102, and 103 of 1997) are hereby set aside. Without deciding the questions of law or fact, the Court remanded the matters back to the learned Tribunal. The Tribunal was directed to reconsider the entire matter afresh and redetermine the liability of the assessee, who is the beneficiary of the first level Trust. The Tribunal was also permitted to take into consideration specific judgments relied upon by the parties, namely McDowell & Co. Ltd. v. C.T.O., Union of India v. Azadi Bachao Andolan, and other reported cases. The Court explicitly refused to make any observations on the merits of the matters to avoid adversely affecting the rights of either party. The References were accordingly disposed of.
What were the facts?
The Commissioner of Income-Tax (Revenue) filed Income Tax References (ITRs) No. 101, 102, and 103 of 1997 before the High Court of Gujarat at Ahmedabad. These references challenged orders passed by the Income Tax Appellate Tribunal (Tribunal). The parties informed the Court that the Tribunal's decisions in these matters were based on its earlier judgment in the case of Sanjiv Family Trust. The Court noted that the said Sanjiv Family Trust case (ITR No. 149/95) had been referred to this Court and was disposed of on July 13, 2006, with the order being set aside and the matter remanded back to the Tribunal with certain directions. Consequently, the parties submitted that the foundation of the impugned orders had become non-existent, and therefore, the Tribunal's orders should also be set aside and remanded.
What were the issues?
1. Whether the High Court should set aside the orders passed by the Income Tax Appellate Tribunal and remand the matters back to the Tribunal, given that the Tribunal's decisions were based on an earlier judgment which has since been set aside and remanded by the High Court. Assessee's Contention: The assessee argued that since the Tribunal's orders were predicated on its judgment in the Sanjiv Family Trust case, and that judgment has now been set aside and remanded by the High Court, the foundation of the impugned orders is non-existent. Therefore, the present matters should also be remanded back to the Tribunal with similar directions. Revenue's Contention: The Revenue concurred with the assessee's submission, agreeing that the matters should be remanded to the Tribunal. The Revenue also requested that the Tribunal be directed to reconsider the entire matter and redetermine the assessee's liability, taking into account specific judgments.
AI-generated summary — verify with the full judgment below
ITR/101/1997 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 101 of 1997 With INCOME TAX REFERENCE No. 102 of 1997 To INCOME TAX REFERENCE No. 103 of 1997 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 APARNA FAMILY TRUST, - Respondent(s) ========================================================= Appearance : MRS. MONA R BHATT for Applicant(s) : 1, MR SN SOPARKAR for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH
ITR/101/1997 2/3 JUDGMENT Date : 31/08/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG) 1. The parties submit that the Tribunal, while deciding the matters has relied upon its earlier judgment in the matter of Sanjiv Family Trust and issued certain directions. The said matter of Sanjiv Family Trust was referred to this Court and ITR No. 149/95 was accordingly registered. The parties submit that ITR No. 149/95 with its analogous matters is finally disposed of on 13.7.06, order passed in the said matter has been set aside by this Court and the matter has been remanded back to the Tribunal with certain directions. The parties submit that as the very foundation of the order impugned has become nonest, the orders passed by the Tribunal may be set aside and the matters be remanded back to the Tribunal with directions as issued in the matter of Sanjiv Family Trust. 2. After hearing the parties and going through our order, dated 13.7.06 in the matter of Sanjiv Family Trust Vs. CIT in ITR No. 149/95, we are of the opinion that the submissions made by the learned counsel for the parties must be accepted. 3. The orders passed by the Tribunal in each of the case are hereby set aside. Without deciding the questions, we remand the matter to the learned Tribunal with a direction that the Tribunal
ITR/101/1997 3/3 JUDGMENT shall reconsider the entire matter and redetermine the liability of the assessee, that is, the beneficiary of the first level Trust. It would be open to the Tribunal to reconsider the matters afresh and decide the matters in accordance with law after taking into consideration the judgments in the matter of McDowell & Co. Ltd., v.. C.T.O., reported n 154 IR 148, Union of India Vs. Azadi Bachao Andolan reported in 263 ITR 706, 209 ITR 101 and 231 ITR 540 on which reliance is placed by the parties. As we are remanding the matters back to the Tribunal, we refuse to make any observations on the merits of the matters as the same is likely to adversely affect the rights of either party. The References are accordingly disposed of. No costs. [R.S. GARG, J.] [M.R. SHAH, J.] pirzada/-
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