9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1977 (12) TMI 15 - HC - Income TaxAppellate Authority Assessment Proceedings Commencement Of Business Income Tax Previous Year
Issues: Assessment year 1965-66 - Exercise of option under s. 3(1)(b) of the I.T. Act, 1961 - Interpretation of sub-s. (4) of s. 3 - Applicability of cl. (e) of sub-s. (1) of s. 3 - Right to exercise option even at a late stage in assessment proceedings.
Analysis: The judgment delivered by the High Court of Madras pertained to the assessment year 1965-66 and the exercise of the option under section 3(1)(b) of the Income Tax Act, 1961. The Tribunal had set aside the initial assessment by the Income Tax Officer (ITO) and directed a re-assessment after allowing the assessee an opportunity to exercise the option provided under the Act. The key issue revolved around the commencement date of the assessee's business, which the Tribunal determined to be April 29, 1963, a finding that was accepted. The assessee had chosen an accounting period ending on June 30, 1964, falling within the financial year related to the assessment year in question. The Tribunal's decision to allow the assessee to exercise the option under section 3(1)(b) was challenged in the High Court. The argument was raised regarding the applicability of sub-section (4) of section 3, contending that the assessee could not exercise the option due to an earlier assessment year being involved. However, it was clarified that sub-section (4) did not apply in this case as the assessee had not exercised any option for the previous year and had not been assessed for it. Furthermore, a broader contention was raised regarding the application of clause (e) of sub-section (1) of section 3 to newly set up businesses. The court held that clause (e) had limited applicability and did not override the provisions of clause (b). It was emphasized that clauses (a) and (b) were the only ones applicable in this scenario, and the assessee retained the right to exercise the option even at a later stage in the assessment proceedings. In conclusion, the High Court upheld the Tribunal's decision, ruling in favor of the assessee and against the revenue. It was determined that the assessee had the right to exercise the option under clause (b) of section 3(1) of the Act, even at a later stage in the proceedings. The judgment directed the parties to bear their respective costs, and a copy of the judgment was to be forwarded to the Tribunal for further action.
|
