Issues involved: Interpretation of section 7 of the Companies (Profits) Surtax Act, 1964 and the binding nature of court decisions on the assessing officer.
Interpretation of Section 7 of the Companies (Profits) Surtax Act, 1964: The appeal concerned the construction of section 7 of the Companies (Profits) Surtax Act, 1964. The court admitted the appeal as there was no prior judgment on the interpretation of this section. However, the court expressed agreement with the interpretation given by the trial judge. The trial judge outlined six key features of a provisional assessment under section 7 and emphasized that the assessing officer is not authorized to reject the return or refuse to accept the factual or legal position shown therein. The court further clarified that the assessing officer must follow decisions of the Supreme Court, High Courts, and ITAT, and cannot ignore decisions in favor of the assessee unless the claims are clearly untenable.
Binding Nature of Court Decisions on Assessing Officer: The court emphasized that the assessing officer is bound by decisions of single judges, Division Benches of the court within their jurisdiction, and the Supreme Court, even if appeals are pending against those decisions. The court declared that the decision under appeal would remain binding on all assessing officers within the court's jurisdiction for making provisional assessments under section 7, unless a different view is taken by a Division Bench of the court or the Supreme Court. This ensures consistency and adherence to legal precedents in the assessment process.
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