2009 (9) TMI 228 - HC - Income Tax

Whether on the facts and circumstances of the case, the Tribunal was right in holding that in the case of the companies, which are under liquidation, section 104 of the Income-tax Act would have no application and consequently erred in quashing the proceedings under section 104 of the Income-tax Act initiated in the case of the assessee-company? Held, yes

Summary

The High Court of Rajasthan considered an application filed by the Revenue under section 256(2) of the Income-tax Act, 1961. The application sought a reference to the Income-tax Appellate Tribunal regarding the applicability of section 104 of the Act to companies under liquidation. The case in question involved an assessment for the year 1979-80 where the assessee did not declare dividends, leading to a dispute with the assessing authority. The Tribunal ruled in favor of the assessee, prompting the Revenue to seek a reference to the High Court. The court examined similar cases involving the same assessee for the assessment years 1971-72 and 1972-73 to 1974-75, where questions of law related to companies in liquidation were addressed. In the case of CIT v. Gotcha Properties P. Ltd., the court held that interest under section 220(2) of the Act was not chargeable for a company under liquidation. The court emphasized the precedence set by Supreme Court decisions and ruled against the Revenue's application for reference. The court concluded that the substantial question of law had already been addressed in previous judgments concerning the same assessee, leading to the dismissal of the reference application.