9911796707
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Issues:
1. Jurisdiction of the Income-tax Officer to invoke section 23A of the Indian Income-tax Act for the second time. 2. Justification of the order under section 23A for the assessment year 1956-57. Analysis: The case involved a private limited company subjected to proceedings under section 23A of the Indian Income-tax Act for the assessment years 1955-56 to 1961-62. The Income-tax Officer found that dividends declared were within the range of 60% to 90%, except for the years 1955-56 and 1958-59. An agreement was reached between the Income-tax Officer and the company, where the company agreed to declare additional dividends for the two exceptional years, and proceedings for other years would be dropped, as confirmed in writing. Subsequently, a successor Income-tax Officer initiated proceedings for the second time for the assessment years 1955-56 to 1961-62, alleging that the company's business mainly involved dealing in investments, leading to revised statutory percentages for dividend declaration. The Tribunal allowed the second appeals filed by the company, emphasizing that in the initial proceedings, the Income-tax Officer had dropped the proceedings for all years after satisfaction with the dividend declarations for 1955-56 and 1958-59. The Revenue contended that there was no limitation on the Income-tax Officer or successor to take successive actions under section 23A. However, the Court held that the section did not provide for multiple actions, being a penal provision, and the Income-tax Officer must drop proceedings where no super-tax is payable. Unlike section 34, which allows subsequent proceedings, section 23A does not provide for such, indicating that rectification of prejudicial orders is under the Commissioner's purview. Thus, the Court rejected the Revenue's argument, affirming that the successor Income-tax Officer lacked jurisdiction to invoke section 23A for the second time, and the order for the assessment year 1956-57 was not justified on merits. The Court answered question No. 1 in the affirmative, favoring the assessee, and did not address question No. 2. The judgment was delivered unanimously by the judges, upholding the assessee's position.
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