COMMISSIONER OF INCOME TAX-IV vs. VADILAL DAIRY INTERNATIONAL LTD

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TAXAP/1107/2011HC GujaratGJHC24025582201131 August 2012Bench: HONOURABLE MR. JUSTICE VIJAY MANOHAR SAHAI,HONOURABLE MR. JUSTICE N.V.ANJARIA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court upheld the Tribunal's order. The Court agreed with the Tribunal's finding that the reassessment proceedings for Assessment Year 1994-95 were initiated on March 14, 2007, which was more than six years after the end of the relevant assessment year. The Court noted that Section 149 of the Income-tax Act, 1961, provides that no notice under Section 148 can be issued if the period of six years has lapsed from the end of the relevant assessment year, in cases falling under Section 149(1)(b). Therefore, the Court concluded that the proceedings were time-barred and Section 152 of the Act would not apply. The Tribunal had also found that no finding existed in appellate orders for Assessment Year 1992-93 indicating that the income was taxable in Assessment Year 1994-95. The High Court found no illegality in the Tribunal's order and held that the proceedings initiated by the revenue were time-barred. Consequently, the additions were deleted. The Court found no substantial question of law arising for consideration and dismissed the appeal.

What were the facts?

The Commissioner of Income Tax-IV (Revenue) filed an appeal against an order of the Income Tax Appellate Tribunal (Tribunal). The appeal concerned the Assessment Year 1994-95. The Tribunal had quashed reassessment proceedings initiated under Section 147 read with Section 150 of the Income-tax Act, 1961, and deleted an addition of Rs. 80 Lacs, treating it as a capital receipt. The reassessment proceedings were initiated on March 14, 2007, which was more than six years after the end of the relevant assessment year. The Tribunal found that the reopening was time-barred under Section 149 of the Act. The High Court heard the Revenue's appeal.

What were the issues?

1. Whether the Appellate Tribunal was right in law and on facts in quashing the reassessment proceedings under Section 147 read with Section 150 of the Income-tax Act, 1961? Assessee's contention: The Tribunal was correct in quashing the reassessment proceedings as they were initiated beyond the period prescribed by Section 149 of the Act. Revenue's contention: The Tribunal erred in quashing the reassessment proceedings. (Specific arguments not recorded in detail). 2. Whether the Appellate Tribunal was right in law and on facts in deleting the addition made of Rs. 80 Lacs, treating it as a capital receipt and therefore holding that the provisions of Section 150 of the Income-tax Act, 1961 are not applicable? Assessee's contention: The addition of Rs. 80 Lacs was a capital receipt and not taxable, and consequently, Section 150 was not applicable. Revenue's contention: The Tribunal was incorrect in treating the amount as a capital receipt and in holding Section 150 inapplicable. (Specific arguments not recorded in detail).

Which sections of the Income-tax Act were involved?

Section 147,Section 150,Section 148,Section 149,Section 152

AI-generated summary — verify with the full judgment below

TAXAP/1107/2011 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 1107 of 2011 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI Sd/- HONOURABLE MR.JUSTICE N.V. ANJARIA Sd/- ========================================= 1. Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2. To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 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 ? NO 5. Whether it is to be circulated to the civil judge ? NO ========================================= COMMISSIONER OF INCOME TAX-IV - Appellant Versus VADILAL DAIRY INTERNATIONAL LTD - Opponent ========================================= Appearance : MS PAURAMI B SHETH for Appellant. None for Opponent. ========================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 31/08/2012 ORAL JUDGMENT

TAXAP/1107/2011 2/3 JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI) We have heard Ms. Paurami Sheth, learned Central Government Standing Counsel appearing for the revenue. 2. This Tax Appeal has been filed on the following two proposed substantial questions of law :- “[I] Whether the Appellate Tribunal is right in law and on facts in quashing the reassessment proceedings u/s. 147 r.w.s. 150 of the I.T. Act ? [II] Whether the Appellate Tribunal is right in law and on facts in deleting the addition made of Rs.80 Lacs treating it as capital receipt and therefore holding that the provisions of section 150 of the I.T. Act are not applicable ?” 3. While dismissing the appeal, the Tribunal has recorded a categorical finding of fact that the reopening of assessment was initiated on 14.3.2007 for the Assessment Year 1994-95. The reopening has been initiated after a period of six years from the end of the relevant Assessment Year. Section 149 of the Income-tax Act, 1961 (for short 'the Act') provides that no notice under Section 148 shall be issued for the relevant Assessment Year in case falling within the section 149(1)(b) of the Act where the period of six years has been lapsed from the end of the relevant Assessment Year. Therefore, the provisions of section 152 of the Act would not apply to the case in hand. The Tribunal has further recorded a finding that no finding has been recorded in any of the appellate orders for the Assessment Year 1992-93 that such income was taxable in the Assessment Year 1994-95. The Tribunal has held that reopening of assessment after a period of six years from the end of the assessment year as per Section 149 of the Act is clearly time barred

TAXAP/1107/2011 3/3 JUDGMENT and has accordingly deleted the additions. 4. We do not find any illegality in the order of the Tribunal as we are also of the opinion that the proceedings initiated by the revenue was time barred. We do not find any substantial questions of law that arises for consideration of this Court. This appeal is concluded of finding of facts and is accordingly dismissed. Sd/- [V. M. SAHAI, J.] Sd/- [N. V. ANJARIA, J.] Savariya

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