9911796707
TMI Blog1979 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... es of another company, viz., Messrs. Elphinstone Spinning Weaving Mills Co. Ltd. (hereinafter referred to as " Elphinstone Mills "). The Elphinstone Mills deducted a sum of Rs. 63,000 from the amount of dividend as income-tax and super-tax and paid the assessee-company the balance amount of Rs. 1,47,000. Pursuant to s. 18(9) of the Indian I.T. Act, 1922, the necessary certificate was also issued by the Elphinstone Mills to the assessee-company. At the time when the assessee-company got its income assessed by the ITO, the certificate was produced before the ITO who gave credit to the assessee for tax deducted at source amounting to Rs. 63,000. It appears that subsequently the ITO, Company Circle 1(6), who was the assessing officer for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escaped assessment either by reason of under-assessment or being assessed at too low a rate or on account of excessive relief being granted. The AAC accepted both the principal contentions raised on behalf of the assessee. In his view the assessee-company was not at fault and as it had produced the necessary certificate under s. 18(9), credit to it could not be denied. Further, according to the AAC, the ITO had no jurisdiction to reopen the assessment under s. 147(b). The department then carried the matter in appeal to the Income-tax Appellate Tribunal. The Tribunal rejected the arguments of the department and upheld the conclusions which earlier had been reached by the AAC. It is from the decision of the Tribunal that the reference has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned u/s. 147(b). " Now assuming that credit for tax deducted at source should not have been given to the shareholder, viz., the assessee-company, the question that arises is whether this excess allowance brings the matter within the four corners of s. 147(b). Action under s. 147(b) is permissible to the ITO where in consequence of information in his possession he has reason to believe that income chargeable to tax has escaped assessment for any assessment year. The question is whether it can be said on the facts of this case that income chargeable to tax has escaped assessment for the assessment year with which we are concerned. Now, for the purposes of this section the legislature has enacted Expln. 1 to the provision where it is clari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcessive credit in the matter of tax deducted at source which was the credit for the amount of Rs. 63,000 for which necessary certificate issued by Elphinstone Mills had been produced before the ITO. The question then is whether this falls within the ambit of item (c) of Expln. 1. The question was considered by the Supreme Court in P. S. Subramanyan, ITO v. Simplex Mills Ltd. [1963] 48 ITR 182 (SC), which was an appeal to the Supreme Court from the decision of the Bombay High Court which is reported in this very volume of the ITR at p. 980. The relevant facts involved in the said appeal were that at the time of assessment it was ascertained that a part of the tax paid by the assessee in advance for the assessment year was found refundable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged excess tax credit given to the assessee cannot be regarded as equivalent to a case where his income has been made the subject of excessive relief. This is clear from the fact that the income on which tax is computed has remained unaltered in the reassessment. If that is so, then item (c) of Expln. 1 is not applicable and the submissions made on the basis thereof by the learned counsel for the revenue must stand rejected. In the view that we have taken of the propriety of the action under s. 147(b), it is unnecessary to express any opinion as to the other aspect on which the AAC and the Tribunal held in favour of the assessee. In the result, the question referred to us is answered in the negative and in favour of the assessee. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
