C.I.T. (C) LDH. vs. SH. SATYA NAND TRUSTEE

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ITR/6/1996HC Punjab & HaryanaPHHC01035033199611 May 2016Bench: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the reference as not pressed. The revenue's counsel stated that they did not wish to press the reference due to the tax effect being below ₹20 lacs, citing CBDT Circulars. The Court granted liberty to the revenue to file an application for revival of the reference if circumstances warranted. It was clarified that the withdrawal of the reference by the revenue would not be considered an affirmation of the ITAT's order on merits. The legal issue raised by the revenue was expressly left open to be adjudicated in an appropriate future case. Therefore, no finding was given on the substantial question of law regarding the allocation of trust loss to beneficiaries.

What were the facts?

This is a reference filed by the Commissioner of Income-tax (Central), Ludhiana (the revenue) against an order of the Income-tax Appellate Tribunal (ITAT) for the assessment year 1984-85. The reference arose from an appeal before the ITAT. The core issue pertains to whether a loss determined in the hands of a trust should be allocated and adjusted in the hands of its beneficiaries, even after assessment was made in the hands of the trustees under Sections 160/161 read with Section 166 of the Income-tax Act. The amount in dispute was less than ₹20 lacs.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that even after the assessment made in the hands of the trustees as per provisions of Section 160/161 read with Section 166 of the Income-tax Act, loss determined in the hands of the trust should be allocated and adjusted in the hands of the beneficiaries? Assessee's Contention: The judgment does not record any specific contentions made by the assessee (Shri Satya Nand) in the reference proceedings before the High Court. The ITAT's decision in favor of the assessee is implied by the revenue's subsequent action. Revenue's Contention: The revenue, through its counsel, submitted that in view of CBDT Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, it did not wish to press the present reference as the tax effect involved was less than ₹20 lacs. The revenue prayed for liberty to file an application for revival of the reference if something survived therein.

Which sections of the Income-tax Act were involved?

Section 160,Section 161,Section 166

AI-generated summary — verify with the full judgment below

ITR No. 6 of 1996 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 6 of 1996 (O&M) Date of Decision: 11.05.2016 The Commissioner of Income-tax (Central), Ludhiana .......Appellant Versus Shri Satya Nand ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This reference has been filed in RA No.303/Chandi/1995 arising out of I.T.A. No.648/Chandi/1990, for the assessment year 1984- 85, raising the following substantial question of law: Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that even after the assessment made in the hands of the trustees as per provisions of Section 160/161 read with Section 166 of the Income-tax Act, loss determined in the hands of the trust should be allocated and adjusted in the hands of the beneficiaries? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present reference REEMA SAINI 2016.05.20 14:31 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITR No. 6 of 1996 (O&M) -2- as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the reference in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the reference by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.05.2016 JUDGE reema REEMA SAINI 2016.05.20 14:31 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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