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Judgments

Anil Radhakrishna Wani vs (1) Income­tax Officer; (2) Commissioner of Income­tax; (3) Union of India, through the Secretary, Ministry of Finance, New Delhi  [BOMBAY HIGH COURT, 04 Mar 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 148 and 149 - Reopening of assessment - Petitioner received certain amount upon his retirement - Amount was payable in instalments - Petitioner received the first installment in assessment year 2003­2004 - Petitioner filed his return of income for assessment year 2003­2004 - Subsequently, a notice was issued u/s. 148 of the Act for re­opening of an assessment for assessment year 2003­2004 - Hence, present petition - Whether there was any failure on the part of the petitioner, as the assessee, to disclose fully and truly all material facts necessary for the assessment? - Held, petitioner made a full disclosure of all the material facts necessary for the assessment for assessment year 2003­2004 - In these circumstances, the jurisdiction to reopen the assessment was not validly exercised since the condition precedent laid down by the statute for reopening of an assessment beyond a period of four years of the expiry of the relevant assessment year was not fulfilled - Notice set aside - Order accordingly.
Assst. C. I. T., Vadodara vs Elecon Engineering Company Limited  [SUPREME COURT OF INDIA, 26 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 36(1)(iii), 37 and 43A - A/y 1986-87 - Deduction u/ss. 36(1)(iii) and 37 - Roll over premium charges - Assessee procured a foreign currency loan for expansion of existing business and booked forward contracts with Citibank for delivery of the required foreign currency on the stipulated dates - Contract was entered into for entire outstanding amount and the delivery of foreign currency was obtained under the contract for instalment due from time to time - Balance value of the contract, after deducting the amount withdrawn towards repayment, was rolled over for a further period up to the date of the next instalment - Assessee filed its return of income for a/y 1986-87 - Revised return was filed by it declaring a total income of Rs.2,10,08,640/- - Assessing Officer (AO) disallowed an amount of Rs.8,86,280/-, being the roll over premium charges paid by the assessee in respect of foreign exchange forward contracts to Citibank on the ground that the said charges were incurred in connection with the purchase of a capital asset, hence, it was not admissible for deduction u/s. 36(1)(iii) or u/s. 37 of IT Act - On appeal, Commissioner held that the roll over premium charges constituted an expenditure incurred for raising loans on revenue account, hence, the said expenditure was allowable under the Act - Tribunal upheld the order of assessment - HC held that roll over premium charges paid by the assessee was in the nature of interest or committal charges, hence, the said charges were allowable u/s. 36(1)(iii) of IT Act - Hence, present appeal - Whether roll over premium charges are admissible deduction u/ss. 36(1)(iii) and 37 of IT Act? - Held, no - During the relevant a/y s.43A applied to the entire liability remaining outstanding at the year-end, and it was not restricted merely to the instalments actually paid during the year - It cannot be said that roll over charge has nothing to do with the fluctuation in the rate of exchange - In the present case, the Notes to the Accounts for the year ending 31-12-1986 (Schedule 17) indicates adverse fluctuations in the exchange rate in respect of liabilities pertaining to the assets acquired - This Note clearly establishes existence of adverse fluctuations in the exchange rate which made the assessee opts for forward cover and which made the assessee pays roll over charges - Moreover, according to Indian Accounting Standards, roll over charges are indicative of the increase or decrease in the liability of the company in the next specified period, generally of six months - Hence, roll over premium charges are not admissible deduction u/ss. 36(1)(iii) and 37 of IT Act - Impugned order of HC set aside - This judgment is confined to the facts of the present case - Revenue’s appeals allowed.
(1) Prashant S. Joshi; (2) Dattaram Shridhar Bhosale vs (1) Income-tax Officer; (2) Union of India  [BOMBAY HIGH COURT, 22 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 2(47), 28, 45(4), 47, 48, 147 and 148 to 163 - Constitution of India, 1950 Art. 226 - AY2005-06 and 2006-07 - Reassessment - Business Income - Remuneration - Notices issued u/s. 148 of the Act proposing to reassess income of petitioner for assessment years 2005-06 and 2006-07 on ground that there was reason to believe that income chargeable to tax had escaped assessment, within meaning of s. 147 of Income Tax Act - Hence, present petition - Held, explanation (2) to s. 147 creates a deeming fiction of cases where income chargeable to tax has escaped assessment - For the purpose of clause (b) to explanation (2), the Assessing Officer must notice that the assessee has understated his income or has claimed excessive loss, deduction, allowance or relief in the return - Taking of such notice must be consistent with the provisions of the applicable law - Act of taking notice cannot be at the arbitrary whim or caprice of the Assessing Officer and must be based on a reasonable foundation - Sufficiency of the evidence or material is not open to scrutiny by the Court but the existence of the belief is the sine qua non for a valid exercise of power - In the present case, there was absolutely no basis for the first respondent to form a belief that any income chargeable to tax has escaped assessment within the meaning of the substantive provisions of s. 147 of the Act - Notice u/s. 148 of the Act set aside - Petition allowed.
Commissioner of Wealth Tax (Central), Ludhiana vs Sat Parkash, C/o Liberty Enterprises, Karnal  [PUNJAB AND HARYANA HIGH COURT, 22 Feb 2010]
Income Tax & Direct Taxes – Wealth Tax Act, 1957, s. 2 - Whether on correct interpretation of clause(e) of s. 2 of the Wealth Tax Act, 1957, Tribunal was right in law in holding that assessee's share in cash Incentives/duty draw back claims of the firm was not includible in the net wealth of the assessee? – Held, disputed tax liability is very meagre and the references are pending since 1996, therefore, the question posed is left unanswered to be adjudicated upon in some other appropriate proceedings – References disposed of.
Commissioner of Income Tax-XVII vs Idea Cellular Limited  [DELHI HIGH COURT, 19 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 194H and 201(1) - A/y 2003-04 and 2004-05 - Tax deduction at source - Commission - Assessee-company was engaged in the business of providing cellular telephone network through a card called Subscriber Identification Module (SIM) - Prepaid or post paid connections are provided to the subscribers through distributors called ‘Prepaid Market Associates (PMAs)’ appointed by the assessee - Assessee offers discount for prepaid calling services to its distributors - Assessing Officer (AO) held that transaction with assessee and prepaid distributors were that of Principal and Agent at all times - Consequently, amount of discount offered to prepaid distributor was in nature of commission and liable to tax deduction at source u/s. 194H of IT Act - Appeal filed against said order was dismissed by Commissioner - On appeal, Tribunal held that relationship between the assessee and its distributors is that of ‘principal and principal’ and not ‘principal and agent’ - Therefore, what was paid to the PMAs was not commission or brokerage and was not subject to deduction of tax at source u/s. 194H of the Act - Hence, present appeal - Whether Tribunal erred in holding that the payments paid by the assessee is not commission as envisaged u/s. 194H of the Act? - Held, SIM cards are prepaid, which are sold by the assessee to the consumers through the medium of PMAs - In the case of postpaid, SIM card transaction is entered into directly between the assessee and the subscriber and the subscriber is sent bill periodically depending upon the user of the SIM card for the period in question - In both the cases, legal relationship is created between the subscriber and the assessee that too by entering into specific agreement between these two parties - Distributor does not have anything to provide ‘as service’ to the consumer - Relationship between assessee and its distributors was of principal and agent and tax should be deducted at source - Tribunal’s order set aside - Revenue’s appeal allowed.
Director of Income Tax vs Sahara India Financial Corporation Limited  [DELHI HIGH COURT, 19 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961 - Double Taxation Avoidance Agreement entered into between India and Canada, art. 13(3)(c) - A/y 1998-1999 - Royalty - Assessee had entered into an agreement with foreign company regarding title sponsor package in connection with the tournament set out in the Schedule – Revenue contended that the payment made by the assessee to foreign company for the said rights of title sponsorship amounted to a royalty payment u/art. 13(3) of the said DTAA - Commissioner held that said payment was covered u/art. 13(3)(c) of the DTAA - On appeal, Tribunal held that payment made by the assessee to foreign company could not be called ‘royalty’ as contemplated u/art. 13(3) of the DTAA - Hence, present appeal - Whether payment made by the assessee to foreign company amounted to ‘royalty’ as contemplated u/art. 13(3) of the DTAA? - Held, no - Commissioner failed to noticed that there was no transfer of a copyright or the right to use the copyright flowing from foreign company to the assessee and, therefore, any payment made by the assessee to foreign company would not fall within art. 13(3)(c) of the said DTAA - Tribunal’s order upheld - Revenue’s appeal dismissed.
Dynamic Orthopedics Private Limited vs Commissioner of Income Tax, Kerala  [SUPREME COURT OF INDIA, 16 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 115J - Income Tax Rules, 1962, r. 5 - Companies Act, 1956, ss. 349 and 350 - Depreciation - Appellant-assessee, a private limited company, filed return of income in which profit and loss account was provided at the rates specified in r. 5 of Rules - Assessing Officer (AO) re-computed the book profit for the purpose of s. 115J of IT Act, 1961, after allowing depreciation as per Schedule XIV to the Companies Act - On appeal, Commissioner held s. 350 of Act, 1956 not applicable to the assessee as it was a private limited company - Tribunal upheld the order of Commissioner - HC held that AO was right in directing the assessee to provide for depreciation at the rate specified in Schedule XIV to 1956 Act and not in terms of r. 5 of Rules - Hence, present appeal - Whether Tribunal was, justified in upholding the order of the Commissioner directing the AO to allow the claim of depreciation as per the Income Tax Rules, 1962, for the purposes of computing the book profit u/s. 115J of IT Act, 1961? - Held, HC's view is similar to the view taken by it in CIT vs. Malayala Manorama Company Ltd. 2001 INDLAW KER 191, which is reversed by SC in Malayala Manorama Company Ltd. vs. CIT 2008 INDLAW SC 1106 - SC judgement of Malayala Manorama Company Ltd. vs. CIT 2008 INDLAW SC 1106 needs reconsideration as s. 115J provided that where the total income of a company, as computed under the Act in an a/y was less than 30% of its book profit, the total income chargeable to tax, would deemed to be an amount equal to 30% of such book to impose a Minimum Alternate Tax (MAT) on 'zero tax' Companies to take care of the phenomenon of Companies not paying taxes though they continued to earn profits and declare dividends - Section 115J of the Act imposes tax on a deemed income and is a special provision not making any distinction between public and private limited companies - Section 115J of the Act legislatively only incorporates provisions of Parts II and III of Schedule VI to the Companies Act and such incorporation is by a deeming fiction, hence, s. 115J(1A) of the Act has to be read in the strict sense and if so it is clear that, by legislative incorporation, only Parts II and III of Schedule VI to 1956 Act have been incorporated legislatively into s. 115J of the Act therefore, question of applicability of Parts II and III of Schedule VI to 1956 Act does not arise - If a Company is a MAT Company, then be it a private limited company or a public limited company, for the purposes of s. 115J of the Act, the assessee-Company has to prepare its profit and loss account in accordance with Parts II and III of Schedule VI to 1956 Act alone - If, with respect, the judgement of this Court in Malayala Manorama Company Ltd. is to be accepted, then the very purpose of enacting s. 115J of the Act would stand defeated, particularly when the said section does not make any distinction between public and private limited companies once a Company falls within the ambit of it being a MAT Company, s. 115J of the Act applies and, under that section, such an assessee-Company was required to prepare its profit and loss account only in terms of Parts II and III of Schedule VI to 1956 Act - What is incorporated in s. 115J is only Schedule VI and not s. 205 or s. 350 or s. 355 - This was the view of the Kerala HC in the case of CIT vs. Malayala Manorama Company Ltd. 2001 INDLAW KER 191, which has been wrongly reversed by this Court in the case of Malayala Manorama Company Ltd. vs. CIT 2008 INDLAW SC 1106 - Matter needs re-consideration - Matter referred to Larger Bench
Commissioner of Income Tax, Jaipur vs Rajasthan Rajya Bunkar S. Samiti Limited  [SUPREME COURT OF INDIA, 16 Feb 2010]
Godrej Agrovet Limited vs Deputy Commissioner of Income Tax, Mumbai and another  [BOMBAY HIGH COURT, 11 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 80-M, 105-O, 147 and 148 - AY 2003-04 - Reopening of assessment - Deduction in respect of certain inter-corporate dividends - Petitioner (Assessee company) received a dividend of Rs.5.59 Crores during AY 2003-04 in respect of the holdings of the petitioner in other corporate entities which was declared in the computation of total income - Due date for the furnishing of the return of income under sub-section (1) of s. 139 was 30.11.2003 - Petitioner distributed an interim dividend of Rs.4.48 Crores on 26.03.2003, 2003 and an amount of Rs.1.13 Crores on 26.06.2003 - However, petitioner’s claim for deduction u/s. 80-M of the Act was restricted to the amount of dividend distributed by the petitioner before the due date - In appeals leading to the Tribunal from the order of assessment the disallowance made by the assessing officer in respect of the expenditure incurred in earning the dividend was deleted by the Tribunal and the petitioner was held to be entitled to a full deduction u/s. 80-M of the Act, restricted to the amount of the dividend distributed - Thereafter, a notice was issued to the petitioner u/s. 148 of the Act - Assessing officer, in his reasons for reopening the assessment adverts to the circumstance that the petitioner paid dividend tax after 1.04.2003 u/s. 115-O of the Act - It was on this basis that the inference was drawn that the petitioner has forfeited the right to claim a deduction u/s. 80-M of the Act - Hence, present petition - Held, deduction that was stipulated u/s. 80-M of the Act was in respect of dividend received by a domestic company from another domestic company - Extent of the deduction was, however, subject to a monetary ceiling, the ceiling being that the deduction should not exceed the amount distributed by way of dividend on or before the due date for the filing of a return - Reasons which have been recorded by the assessing officer are ex facie extraneous to the question as to whether the petitioner would be entitled to a deduction u/s. 80-M of the Act - Assessing officer acted in excess of the restraints on his jurisdiction to reopen an assessment in exercise of the powers u/s. 147 r/w s. 148 of the Act - Notice set aside - Rule made absolute.
Commissioner of Income Tax, Karnal vs Accent For Living  [PUNJAB AND HARYANA HIGH COURT, 11 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 80(IA) and 260A - A/y 2001-2002 - Deduction - Whether the amount of Duty Draw Back and profit on sale of licenses could be regarded as income derived from business of industrial undertaking and would qualify for deduction u/s. 80(IA) of Act? - Held, Duty Draw Back receipt and DPEB benefits do not form part of the net profits of eligible industrial undertakings for the purposes of deduction u/ss. 80-1/80-1A/80-IB of the Act - Accordingly shorn of factual details, the issue has to be decided against the assessee and in favour of the Revenue - Same principle of law would apply to profit derived on sale of licences - Appeal allowed.
Deputy Commissioner of Income-tax vs M. Sundaram  [MADRAS HIGH COURT, 11 Feb 2010]
Income Tax & Direct Taxes – Criminal - Income Tax Act, 1961, s. 276-CC – Failure to file returns – Criminal prosecution – Maintainability - Respondent/assessee failed to file his return for the relevant period even after the issuance of notice u/ss. 142 and 148 of the Act – Respondent filed returns belatedly – Appellant/Department imposed penalty and interest and recovered the same from respondent - Appellant filed complaint against the respondent u/s. 276-CC alleging non-filing of the return in time – Trial Court acquitted respondent – Appellant contended that recovery of penalty and interest from respondent would not absolve respondent’s criminal liability – Held, respondent has not filed his returns in time for the relevant assessment years, therefore, he is liable to be prosecuted for the offence u/s. 276-CC of the Act - Since the respondent has not filed the returns in time, mere payment of interest/penalty would not absolve his criminal liability – Appellant/Department has proved that the respondent-accused is guilty of the offence u/ss. 276-CC of the Act, beyond reasonable doubt – Therefore, Trial Court committed error in acquitting the respondent, hence impugned Trial Court order is set aside – Appeal allowed.
P. P. C. Business and Products Private Limited vs Chief Commissioner of Income Tax  [DELHI HIGH COURT, 11 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 234A, 234B and 234C - CBDT Circular dt. 23-05-1996 - A/ys 2001-2003 - Petitioner submitted income tax return for impugned years and deposited the income tax - Petitioner filed a petition for waiver of the interest on income tax for impugned years, relying upon the notification dt. 23-05-1996 issued by CBDT - Commissioner rejected said petition and directed the petitioner to pay interest on the income tax - Petitioner filed writ petition submitting that on account of the unavoidable circumstances i.e. that all the books of accounts and other documents being seized by the CBI in the raid, it was not possible for the petitioner to deposit the advance income tax or file the returns in time, hence, impugned order is erroneous in coming to a conclusion that the account books were available with the petitioner who did not file the same - Whether said writ petition could be allowed? - Held, petitioner filed the income tax returns for the said a/ys and deposited the income tax therefor, only on 31-03-2003 - In this behalf it is seen that a tax audit report is mandatorily prepared by an independent auditor based on the documents and accounts produced by the assessee, and as such it would not have been possible for the petitioner to file the tax audit reports on 31-10-2002 and 29-10-2002, without submitting the necessary documents for verification by the independent auditor, who issued the tax audit reports - Therefore, unless the books of accounts or relevant details thereof maintained by the assessee were produced for the examination of the tax auditor, it would not have been possible for the independent auditor to prepare the tax audit reports - Plea of the Petitioner that he was not able to file his income tax returns for the said years in time, is without any merit - Petition dismissed.
In Re : Anurag Chaudhary, Nainital vs   [AUTHORITY FOR ADVANCE RULINGS, 11 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 5(1)(c), 6 and 245Q - A/y 208-2009 - Deduction - Applicant was assigned by an Indian company, to work in its group company in USA, for sometime - Applicant claimed his status as non-resident submitting that he left India for USA for employment purposes on 31-03-2008 and came back on 29-11-2008 i.e. he was in India for 122 days in the a/y 2008-2009 - Whether the income earned by the applicant by way of salary from his employment in USA in the a/y 2008-09 is liable to be taxed u/s. 5(1)(c) or any other provision of the Income-tax Act, 1961 on the basis that the applicant’s status was that of a ‘resident’ during that year? - Held, no - Section 6 sub-section (1), determines that a citizen of India who leaves India for the purpose of employment outside India can be considered as resident of India, if he has been in India for 182 days or more even though he may have been in India for more than 365 days in 4 preceding years - No information regarding applicant’s stay in India during 4 preceding years - Applicant satisfies neither clause (a) nor clause (c) of s. 6(1) so as to merit treatment as a resident of India during the relevant period - It necessarily follows that the applicant was a ‘non-resident’ during the relevant period - Consequently his income that accrued outside India in USA by reason of his employment there cannot form part of the total income taxable in India - Hence, applicant being a non-resident during the previous year 2008-09, the income earned by him from his employment in USA cannot be taxed under Income-tax Act, 1961 - Ruling given.
(1) Suresh Anandraj Jain; (2) Ujwala Paraschand Jain; (3) Tatiya Credit Corporation; (4) Paraschand Anandraj Jain; (5) Chanchala Devi Sureshchand Jain; (6) Paras and Company vs Union of India, Through its B. T. Pali  [BOMBAY HIGH COURT, 11 Feb 2010]
Income Tax & Direct Taxes - Corporate - Criminal - Income Tax Act, 1961, ss. 238, 274 and 276 - Code of Criminal Procedure, 1973, s. 482 - Willful attempt to evade tax - Concealment of the income - Notice was issued to the applicants (partners of a firm) u/s. 274 r/w s. 271(1)(c) of the Act for concealment of the income - Appeals filed thereagainst before Commissioner of Income Tax and Income Tax Appellate Tribunal were dismissed - Applicants were held liable for prosecution for the offences for making attempt to evade payment of taxes and for making false verification in the return of income - Present application seeking quashing of cases for an offence punishable u/s 276C, 277 r/w 238 of the Act - Held, issue whether the applicants can be punished u/s. 276C for the offence committed u/s. 278B of the Act by the firm or not can be considered after trial and after giving opportunity to both the sides to lead the evidence - Applications devoid of any merit - Applications dismissed.
Indian Roadlines vs Commissioner of Income Tax-2, Jalandhar  [PUNJAB AND HARYANA HIGH COURT, 10 Feb 2010]
Balkrishna Hiralal Wani vs (1) Income Tax Officer; (2) Commissioner of Income Tax; (3) Union of India, through the Secretary, Ministry of Finance  [BOMBAY HIGH COURT, 10 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 147 and 148 - Reassessment of income - Petitioner, partner in a firm of Solicitors retired on attaining the age of seventy years - On retirement from the firm, the petitioner became entitled to a sum of Rs.1,73,25,000/- which was payable in eight installments - During the course of the previous year relevant to assessment year 2004-05, the petitioner received an amount of Rs.21,65,625/-, out of the total amount receivable - In his return of income for assessment year 2004-05, the petitioner disclosed receipt of the aforesaid amount - A notice u/s. 148 was issued to the petitioner - Assessing Officer observed that the amount received by the petitioner on his retirement was assessable as capital gain tax - Hence, present petition - Whether the Assessing Officer had reason to believe that income chargeable to tax had escaped assessment? - Held, s. 147 empowers the Assessing Officer to assess or reassess income, which he has reason to believe has escaped assessment for the assessment year - Existence of a reason to believe is the condition precedent to the exercise of power and the reasons must be recorded in writing - In the present case, there was no tangible material before the Assessing Officer to form a conclusion that income has escaped assessment - Jurisdictional condition precedent prior to the exercise of the power to reopening the assessment u/s. 147 of the Act not fulfilled - Petition allowed.
Commissioner of Income Tax, Ahmedabad vs Mastek Limited  [SUPREME COURT OF INDIA, 10 Feb 2010]
T. R. F. Limited vs Commissioner of Income Tax, Ranchi  [SUPREME COURT OF INDIA, 09 Feb 2010]
T. R. F. Limited vs Commissioner of Income Tax, Ranchi  [SUPREME COURT OF INDIA, 09 Feb 2010]
Totgars Cooperative Sale Society Limited vs Income Tax Officer, Karnataka  [SUPREME COURT OF INDIA, 08 Feb 2010]
(A) Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 56, 57 and 80P(2)(a)(i) - A/y 1991- 1992 - Deduction in respect of income of Co-Operative societies - Assessee invested surplus funds in short-term deposits with the banks and in government securities on which interests accrued to the assessee - Assessee provides credit facilities to its members and also markets the agricultural produce of its members - Assessee claimed deduction u/s. 80P(2)(a)(i) of the Act on such interest which was denied by assessing officer (AO) and held that interest income which the assessee had disclosed under the head ‘Income from business' was liable to be taxed under the head ‘Income from other sources’ - AO’s order was upheld by tribunal and HC - Hence, present appeal - Whether such interest income would qualify for deduction as business income u/s. 80P(2)(a)(i) of the IT Act, 1961? - Held, no - Assessee retained the sale proceeds of agricultural produce of its members in many cases - It is this ‘retained amount’ which was payable to its members, from whom produce was bought, which was invested in short-term deposits/securities - Such an amount, which was retained by the assessee, was a liability and it was shown in the balance-sheet on the liability-side - Therefore, such interest income cannot be said to be attributable either to the activity mentioned in s. 80P(2)(a)(i) of the Act or in s. 80P(2)(a)(iii) of the Act - Therefore, AO was right in taxing the interest income u/s. 56 of the Act - Appeals dismissed.

(B) Income Tax & Direct Taxes - Income Tax Act, 1961, s. 80P(2)(a)(i) - A/y 1991- 1992 - Deduction in respect of Income of Co-Operative societies - Whether tribunal was right in law in holding that the income by way of interest on deposits held with scheduled banks, bonds and other securities was chargeable to tax u/s. 56 under the head 'Income from other sources' without allowing any deduction in respect of cost of funds and proportionate administrative and other expenses u/s. 57 of IT Act? - Held, it involves interpretation of ss. 56 and 57 of the Act - It also involves applicability of the said sections to the facts of the present case - Said question remitted to HC for consideration in accordance with law - Appeals dismissed.

Punjab Urban Development Authority (PUDA) vs Commissioner of Income Tax-I and Another  [PUNJAB AND HARYANA HIGH COURT, 05 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 142(2A) - Assessee is a statutory body and filed its return claiming exemption u/ss. 10(20A) of the Act - Assessing Officer (AO) passed the impugned order on the ground that accounts being complex, special audit was required - Petitioner submitted that no hearing was given to it before the impugned order was passed which was necessary - Held, opinion of AO is not based on objective data as required - Other requirements for exercise of the power have not been complied with - Since judgment of the SC has been delivered after filing of this petition, the revenue has no objection to a fresh order being passed in accordance with law - Fresh order may be passed in accordance with law - Petition disposed
Krishna Devi vs Chief Commissioner of Income Tax and Others  [PUNJAB AND HARYANA HIGH COURT, 04 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 132 - Search conducted u/s. 132 of IT Act, 1961, certain jewellery was seized from one ‘X’ – Petitioner claims to be the wife of adopted son of ‘X’ – Impugned jewellery was given by respondent No.2 to unauthorised persons on 30-3-2000 - Petition has been filed on 25-2-2009 – Petition filed petition seeking a direction to quash releasing of gold jewellery weighing 1046 gms. to unauthorised persons and to give compensation to the petitioner – Held, in the present case, the jewellery is not available with the revenue but has been sold for recovery of dues and though the petitioner relied the order of assessment passed in the year 1999 and also claims that it was the duty of the revenue to return the jewellery within 120 days, thereafter, the petitioner never raised such claim for a period of about 10 years - In these circumstances, the case of the petitioner is fully covered by order of this Court - Petition dismissed.
Commissioner of Income Tax, Jalandhar vs Shivalik Kshetriya Gramin Bank, Hoshiarpur  [PUNJAB AND HARYANA HIGH COURT, 02 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 80P - A/y 2002-03 to 2004-05 - Deduction - Interest earned on investment of surplus reserve - Whether the Tribunal was right in dismissing the appeal of the revenue on the issue of disallowance of deduction u/s. 80P on interest earned on investment of surplus reserve where such investment is not governed by any statutory provisions for carrying on the business of Banking and whether the Tribunal was right in dismissing the appeal of the revenue on the issue of disallowance of deduction u/s. 80P on interest earned from utilisation of voluntary reserves other than statutory reserves when SC has set aside the similar issue in the case of Mehsana District Co-op Bank Ltd. vs. ITO 2001 INDLAW SC 20761? - Held, HC in Commissioner of Income Tax vs. Nawanshahar Central Co-operative Bank Ltd 2003 INDLAW PNH 8, has held that deduction u/s. 80P(2)(a)(i) of IT Act, on account of interest income on Government securities, debentures, bonds, Kisan Vikas Patras and C.D. of IDBI was admissible - Investment in the said bonds has been held to be statutory investment in accordance with s. 44 of the Punjab Co-operative Societies Act, 1961 and, thus, eligible for deduction u/s. 80P(2)(a)(i) of the Act - Following said judgement - Appeals dismissed.
Assistant Commissioner of Income Tax and Another vs Hotel Blue Moon  [SUPREME COURT OF INDIA, 02 Feb 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 132, 143(2) and 158BC(a), Chapter XIV-B - Block assessment - Show cause notice - Whether service of notice on the assessee u/s. 143(2) of IT Act within the prescribed period of time is a pre-requisite for framing the block assessment under Chapter XIV-B of IT Act? - Held, yes - Section 158 BC(b) of IT Act is a procedural provision for making a regular assessment applicable to block assessment - Section 158 BC(c) of IT Act would require the AO to compute the income as well as tax on completion of the proceedings to be made - In case of default in not filing the return or not complying with the notice u/ss. 143(2)/142of IT Act, AO is authorized to complete the assessment ex-parte u/s. 144 of IT Act – Notice u/s. 143(2) of IT Act should be issued within one year from the date of filing of block return - Omission on the part of the AO to issue notice u/s. 143(2) of IT Act cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice u/s. 143(2) of IT Act cannot be dispensed with - Even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period u/s. 158 BC of IT Act, the provisions of ss. 142 and 143 of IT Act are applicable and no assessment could be made without issuing notice u/s. 143(2) of IT Act - Revenue’s appeals dismissed.
Mitsubishi Corporation, Delhi vs Joint Commissioner of Income Tax, Delhi  [SUPREME COURT OF INDIA, 02 Feb 2010]


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