9911796707
|
Home
Issues Involved:
1. Legality of reassessment order under Section 15 of the Excess Profits Tax Act. 2. Validity of the Appellate Assistant Commissioner's reference to Mr. Dastur. 3. Compliance with Section 15 of the Excess Profits Tax Act. Issue-wise Detailed Analysis: 1. Legality of Reassessment Order under Section 15 of the Excess Profits Tax Act: The assessee challenged the reassessment order under Section 15 of the Excess Profits Tax Act. Initially, the assessee was assessed to excess profits tax on an income of Rs. 4,03,269. However, a subsequent assessment was conducted based on Mr. Dastur's report, which resulted in the assessee being reassessed on an income of Rs. 13,99,095. The reassessment was contested by the assessee on the grounds that it was not in compliance with the necessary legal provisions. 2. Validity of the Appellate Assistant Commissioner's Reference to Mr. Dastur: The first challenge was that the Appellate Assistant Commissioner should not have referred the case to Mr. Dastur, who was not directly involved in the assessment. The assessee argued that this referral violated Section 54 of the Income Tax Act, which safeguards the confidentiality of disclosures made by an assessee. However, it was clarified that Mr. Dastur was an Income Tax Officer within the department, and his involvement did not constitute a breach of confidentiality. The court distinguished this case from the precedent cited, stating that Mr. Dastur's involvement was for the purpose of assessment and did not influence the independent judgment of the Excess Profits Tax Officer. 3. Compliance with Section 15 of the Excess Profits Tax Act: The more serious contention was regarding the compliance with Section 15, which requires three conditions to be fulfilled before reopening an assessment: discovery of escaped assessment, definite information leading to this discovery, and this information must be new and not previously in the officer's possession. The court examined Mr. Dastur's report, which contained new facts such as discrepancies in cash and credit sales, undervaluation of stock, unexplained cash credits, and incomplete account closures. These facts were not known to the initial assessing officer and came to light only through Mr. Dastur's scrutiny. The court emphasized that "information" under Section 15 means actual knowledge acquired by the officer, not merely the presence of materials that could have been known through due diligence. The Tribunal's finding that these were new facts not previously considered by the initial officer was accepted. The court rejected the argument that mere possession of books constituted information, clarifying that actual awareness of the facts was necessary. Conclusion: The court concluded that the reassessment was validly made under Section 15 of the Excess Profits Tax Act. The questions were answered as follows: - Question (1) in the negative. - Question (2) in the affirmative. The assessee was ordered to pay the costs, and the reference was answered accordingly.
|
