1990 (1) TMI 38 - HC - Income Tax

Summary

Issues:
Jurisdiction of the respondents to issue notices under the Income-tax Act regarding furlough pay payments made outside India.

Analysis:
The petitioner-bank sought a writ of mandamus to cancel impugned notices and letters related to furlough pay payments made outside India. The petitioner argued that since no proceedings under specific sections of the Income-tax Act were pending against them, the respondents lacked the jurisdiction to issue notices under section 133(6) of the Act. The petitioner contended that tax deductions were made for employees in India, and expatriate officers receiving furlough pay in the UK were assessed under the Income-tax Act. The petitioner challenged the legality of the notices and the jurisdiction of the respondents to requisition information under the Act.

Analysis:
The petitioner's counsel argued that the impugned notices were issued without proper application of mind and were invalid, illegal, and without jurisdiction. It was contended that the provisions of section 192 of the Act, regarding tax deductions for furlough pay made outside India, did not have extraterritorial operation. The petitioner claimed that the requisition of information under section 133(6) was a pretense for a fishing investigation and a colorable exercise of jurisdiction. The counsel referenced relevant provisions of the Income-tax Act to support their arguments against the impugned notices.

Analysis:
After reviewing the materials on record and the arguments presented, the court held that furlough pay falls under the category of "Salaries" for tax purposes, subject to sections 192(1) and 200 of the Income-tax Act. The court found that the Income-tax Officer had reason to believe that the petitioner failed to fulfill tax obligations under the Act. The court concluded that the actions taken by the respondents were in accordance with the law and not unwarranted. While the petitioner claimed to have made payments during the proceedings, the court found no merit in the writ petition and discharged the rule, with no costs imposed. Additionally, the court refused to stay the operation of the order.

This detailed analysis of the judgment addresses the jurisdictional issues, legal arguments presented by the petitioner, and the court's findings regarding the legality of the notices and the actions of the respondents under the Income-tax Act.