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1996 (9) TMI 15 - HC - Income Tax

Issues Involved:
1. Status of the petitioner as an "individual" for assessment purposes.
2. Denial of benefits under section 4(1)(b) of the Agricultural Income-tax Act, 1950.
3. Compliance with Tribunal's directions in exhibit P-1.
4. Application of the principle of res judicata.
5. Validity of the assessment orders for the year 1984-85 (exhibits P-4 and P-5).

Detailed Analysis:

1. Status of the petitioner as an "individual" for assessment purposes:
The petitioner, a religious institution owning 54 acres of agricultural land, was assessed by the Agricultural Income-tax Officer as an "individual" for the year 1974-75. This classification led to the denial of benefits under section 4(1)(b) of the Agricultural Income-tax Act, 1950. The petitioner contested this classification, arguing that it should be recognized as a religious and charitable institution.

2. Denial of benefits under section 4(1)(b) of the Agricultural Income-tax Act, 1950:
The first respondent did not allow the petitioner the benefits available under section 4(1)(b) of the Act. This section provides benefits to religious and charitable institutions. The Tribunal in exhibit P-1 found that the Agricultural Income-tax Officer failed to consider the application of income in terms of section 4(1)(b) and directed a fresh assessment.

3. Compliance with Tribunal's directions in exhibit P-1:
The Tribunal's order in exhibit P-1, dated August 19, 1987, directed the assessing authority to reconsider the case afresh. However, for the subsequent years 1977-78 to 1981-82, the Appellate Assistant Commissioner also set aside similar orders and directed fresh disposal in view of exhibit P-1. Despite these directions, no revised orders were passed for these years. For the year 1984-85, the first respondent again disallowed the benefit under section 4(1)(b) without considering exhibits P-1 and P-2, leading to the issuance of exhibit P-4. The second respondent also did not consider the directions in exhibit P-1 while passing exhibit P-5.

4. Application of the principle of res judicata:
The principle of res judicata does not apply to the decisions of the Agricultural Income-tax Officer as he is not a court. A decision in one year is not binding in subsequent years but can be considered cogent evidence. The Supreme Court in M. M. Ipoh v. CIT and other cases has held that findings in one year are not conclusive in subsequent years but can be persuasive.

5. Validity of the assessment orders for the year 1984-85 (exhibits P-4 and P-5):
Exhibits P-4 and P-5 were challenged for not complying with the Tribunal's directions in exhibit P-1. The court found manifest injustice in the refusal to comply with these directions. The orders were passed without considering the cogent evidence provided by exhibits P-1 and P-2. The court emphasized that the Tribunal's findings should be treated as significant evidence in subsequent assessments.

Conclusion:
The court set aside exhibits P-4 and P-5, directing the first respondent to complete the assessment afresh on merits and in view of exhibit P-1. The first respondent is also instructed to issue notice to the petitioner before completing the assessment. The original petition is disposed of accordingly.

 

 

 

 

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