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2014 (7) TMI 997 - HC - Income TaxExemption u/s 10(23G) - precondition for issuing bonds introduced by Finance Act, 1997, w.e.f.01.04.1998 - applicability of such preconditions on purchase of bond which were isued as on 18.2.1998 - Held that - Once the bonds which had been issued, in respect of which exemption is claimed by the asseesee, were so issued on 18th February 1998, then, requirement of a notification in the official gazette as a condition precedent for exemption u/s 10(23G) of the Act, was inapplicable - the Tribunal was in no error in reversing the concurrent findings of facts it was clearly vitiated by any error of law apparent on the face of the record Decided against revenue.
Issues: Interpretation of Section 10(23G) of the Income Tax Act, 1961 regarding the requirement of notification in the Official Gazette for exemption.
In this judgment by the Bombay High Court, the main issue revolved around the interpretation of Section 10(23G) of the Income Tax Act, 1961, specifically regarding the necessity of a notification in the Official Gazette for claiming exemption. The court considered the applicability of this requirement introduced by the Finance Act, 1997, effective from 1st April 1998. The court analyzed the arguments presented by both parties, focusing on the relevance of the circular issued by the Central Board of Direct Taxes, which clarified the conditions for exemption under Section 10(23G). The judges carefully examined the assessment order, Commissioner of Income Tax's decision, and the Tribunal's findings to determine whether the exemption claimed by the assessee was valid without the notification in the Official Gazette. After thorough consideration, the court concluded that the bonds in question were issued on 18th February 1998, prior to the effective date of the notification requirement. Therefore, the Tribunal's decision to reverse the concurrent findings was deemed appropriate and legally sound. The court emphasized that the Tribunal did not commit any error of law or perversity in its decision, leading to the dismissal of the appeal. Ultimately, the judgment clarified the legal position regarding the notification requirement for exemption under Section 10(23G) and affirmed the Tribunal's decision based on the factual and legal analysis presented during the proceedings.
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