COMMISSIONER OF INCOME TAX-IV vs. U.P.C. LTD.

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TAXAP/1040/2006HC GujaratGJHC24038017200611 December 2014Bench: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Gujarat, while admitting the appeal, had framed two substantial questions of law concerning the validity of reopening of assessment under Section 148 and the assessee's entitlement to exemption under Section 10(4A). However, during the hearing, the learned advocate for the appellant (revenue) submitted that the amount involved was small and the revenue effect was low. Relying on CBDT instructions, the revenue counsel argued that the appeal should not have been filed and consequently should be dismissed. The High Court accepted this submission and answered the questions in favor of the assessee and against the revenue. The appeal was accordingly dismissed. The specific findings on the merits of the two framed questions were not adjudicated upon due to the revenue's submission.

What were the facts?

The appellant-revenue challenged the judgment and order dated March 10, 2006, passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad, in ITA No. 1497/Ahd/2004 for the Assessment Year 1989-90. The High Court of Gujarat admitted the appeal on January 29, 2007, and framed substantial questions of law. The revenue's counsel submitted that the amount involved was small and the revenue effect was low, and therefore, as per CBDT instructions, the revenue should not have filed an appeal. Consequently, the appeal was required to be dismissed.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the reopening of the assessment under Section 148 of the Income-tax Act, 1961, was not valid? 2. Whether the Appellate Tribunal was correct in holding that the assessee is entitled to exemption under Section 10(4A) of the I.T. Act, even though the sub-section (4A) was substituted by sub-section (ii) of Section 10(4) and the exemption was not available to the assessee with effect from April 1, 1989? Assessee's contentions: The judgment does not record any specific contentions made by the assessee. However, the appeal was framed on questions concerning the validity of reopening under Section 148 and entitlement to exemption under Section 10(4A). Revenue's contentions: The learned advocate for the appellant (revenue) stated that the amount involved in the present case is small and there is a low revenue effect. Therefore, as per CBDT Instruction, the revenue ought not to have come in appeal, and the appeal should be dismissed.

Which sections of the Income-tax Act were involved?

Section 148,Section 10(4A),Section 10(4)

AI-generated summary — verify with the full judgment below

O/TAXAP/1040/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1040 of 2006

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER ============================================================ ==== 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-IV....Appellant(s) Versus U.P.C. LTD.....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER

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O/TAXAP/1040/2006 JUDGMENT Date : 11/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant­revenue has challenged the judgment and order dated 10.03.2006 passed   by   the   Income­tax   Appellate   Tribunal, Ahmedabad, in ITA No. 1497/Ahd/2004 for the Assessment Year 1989­90. 2. While   admitting   this   appeal   on   29.01.2007, this   Court   has   framed   the   following   substantial question of law: “(A) Whether   on   the   facts   and circumstances of the case and in law, the   Appellate   Tribunal   is   correct   in holding   that   the   reopening   of   the assessment u/s 148 of the Act was not valid ? (B) Whether the Appellate Tribunal was correct in holding that the assessee is entitled   for   exemption   under   Section 10(4A) of the I.T.Act even though the sub section (4A) was substituted by sub section (ii) of the Section 10(4) and the exemption was not available to the assessee w.e.f. 01.04.1989 ? 3. Heard the learned advocates appearing for Page 2 of 3

O/TAXAP/1040/2006 JUDGMENT the parties and considered the submissions.  Learned advocate   for   the   appellant   states   that   the   amount involved in the present case is small one and there is low   revenue   effect,   and   therefore,   as   per   CDBT Instruction, the revenue ought not to have come in appeal, and therefore, this appeal is required to be dismissed. In that view of the matter, the question is answered in favour of the assessee and against the revenue. This appeal is dismissed accordingly. (K.S.JHAVERI, J.) (K.J.THAKER, J)

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