2009 (2) TMI 495 - HC - Income Tax

Applicability of section 115BB - prizes won in entertainment programmes on television - whether the receipt by the appellant was taxable thereunder or not and the receipt by the appellant taxable under the said provision or not, On a reading of section 2(24)(ix) and the Explanation thereto which come into effect from April 1, 2002, and section 115BB, a conjoint reading of the aforesaid two provisions is required to be made. The Tribunal failed to taken into account the fact that section 2(24)(ix) was introduced and the Explanation thereto was introduced with effect from April 1, 2002, appellant s cross-objection back to the Tribunal to reconsider afresh keeping in view the date of amendment, appeal is allowed.

Summary

Issues:
Challenge to order of Income-tax Appellate Tribunal regarding taxation of winnings from TV show under section 115BB of Income-tax Act, 1961.

Analysis:
The appellant participated in a TV show and won a sum of Rs. 25 lakhs, which was awarded by a post-dated cheque dated November 5, 2000. The Income-tax Department claimed tax of Rs. 10.39 lakhs under section 115BB of the Income-tax Act, 1961. The appellant contended that the winnings should not be taxable under section 115BB. The first appellate authority held the receipt as "Income from other sources" and directed the Assessing Officer to determine the allowability of expenses. The appellant challenged this decision before the Income-tax Appellate Tribunal, which disposed of the appeals and cross-objections through a common order dated August 5, 2004, dismissing the appellant's appeal and allowing the Revenue's appeal.

The Tribunal considered the applicability of section 115BB and the amendment to section 2(24)(ix) of the Income-tax Act, 1961. It held that the definition of income under section 2(24)(ix) was amended to include prizes won in entertainment programs on television, deciding in favor of the Revenue. However, the Tribunal failed to consider that the amendment had prospective effect from April 1, 2002. Thus, the Tribunal's order was challenged due to this oversight.

The High Court quashed the Tribunal's order dated August 5, 2004, and remanded all matters back to the Tribunal for fresh consideration, emphasizing the importance of the date of amendment to the relevant statute. The Court allowed the appeal and directed the Tribunal to expedite the reconsideration process within six months from the date of receipt of the judgment.

In conclusion, the Court's decision focused on the correct interpretation of the relevant provisions of the Income-tax Act, 1961, and the timing of the amendments affecting the taxation of winnings from TV shows. The judgment highlighted the need for a proper understanding of the law and directed a timely resolution of the matter by the Tribunal.