1995 (8) TMI 28 - HC - Income Tax

Summary

Issues:
1. Interpretation of time limits for issuing notice for claiming exemption under section 11(2)(a) of the Income-tax Act, 1961.
2. Validity of notice in Form No. 10 filed by the assessee for claiming exemption under section 11(2)(a).
3. Comparison of decisions by different High Courts on similar questions.

Analysis:
The judgment pertains to an income-tax case where the Commissioner of Income-tax, Andhra Pradesh-II, sought reference of three questions of law to the High Court. The first issue revolved around the correctness of the notice in Form No. 10 filed by the assessee for the assessment year 1982-83, after the expiry of the time-limit prescribed under section 139(1) of the Income-tax Act, 1961. The second issue questioned the competence of the rule-making authority to prescribe a time-limit under rule 17 for issuing such notice, considering that section 11(2)(a) itself did not specify any time-limit. The third issue focused on the validity of the notice in Form No. 10 for claiming exemption under section 11(2)(a), with a contention that the time limit should be interpreted liberally due to the provision allowing a ten-year period for accumulation of unapplied income.

The court acknowledged that the questions raised were indeed questions of law arising from the order of the Income-tax Appellate Tribunal. The respondent's counsel argued that the first question was covered by a Supreme Court decision but the court found that decision to be unrelated to the specific issue at hand. Additionally, the respondent cited decisions from Madras, Kerala, and Bombay High Courts supporting a favorable interpretation similar to the second question raised. However, the absence of a decision from the High Court or the Supreme Court on this specific matter led the court to allow the income-tax case for reference of the questions.

In conclusion, the High Court directed the Appellate Tribunal to state the case and refer the three questions for further consideration. The judgment emphasized the need for clarity on the interpretation of time limits for issuing notices for claiming exemptions under section 11(2)(a) of the Income-tax Act, 1961, in the absence of authoritative decisions from the court on the matter.