LexPILLANI INVESTMENT CORPORATION LTD. versus I.T.O. AWARD, CALCUTTA & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
'502
PILLANI INVESTMENT CORPORATION LTD.
v.
I.T.O. 'A' WARD, CALCUTTA & ANR.
November 23, 1971
{S .. M. S!KRI,, C.J., P. JAGANMOHAN REDDY, I.. D. DUA AND
G. K. MITTER, JJ.]
Income-tax Act, 19'22, ss. 23A and 34(3)-S. 34(3)
whether app/i-
.cable to an order un<Jer s. 23A.
Supreme Court-Revietv o/ prerio11s decision when justified.
A
B
The appellant company objected to an order under s. 23A sought to be
·passed against it. by the Income-tax Officer on \he ground that it was an
C
.order of assessment or re-assessment within the meaning of s. 34(3) of
1he Act ancl'barred by time. The writ petition in the High Court having
failed the comP.any by special leave appealed to this Court. A plea was
·made for re,ie\Ving the judgment in Parikh's case in which this Court
'had held that s. 34(3) was not applicable to an order under s. 23A.
HELIJ: 1nc pico for review of Parikh's case must be rejected be·
cause : (i) The point was not likely to arise under the Income-tax Act.
1961 as s. 106 thereof provides a period of limitation for an order such
.as the one in question; (ii) It was not shown that some vital point was not
<:onsidered or that the juclgment was clearly erroneous so as to justify re·
·view 011' the _principles laid down in Keshav Mills; (iii) The words 'after
the expiry of four years from the end of the year in which the income.
profits and gains wzre first assessable' ins. 34(3) are not apposite to cover
·the order made under s. 23A as it stood before its amendment by the
Finano~ Act II of 1957. An order under s. 23A does not assess income,
profits ano gains as such but levies super-tax un a certain portion of the
undistributed profits and gains.
The taxable event is non-distribution of
some part of profits which have already been assessed. They were not
-only first assessable but assessed.
It would be odd to start the beginning
-of the period of limitation from the time the profits were actually first
assessed. (504 H-505 FJ
The appeal must accordingly be dismissed.
M. M. Parikh v. Navanagar Transport & Industries, 63 I. T. R.
663,
-reaffirmed.
Keshav Milh'. v. C.1.T. Bombay, [1965] 2 S.C.R. 908, 921, applr,d.
D
E
F
Navanaga,. & Industries Ltd. v. ]. T.0. Special Jnvest(r;ation Circle.
G
Ahmedabad, 54 I.T.R. 271, referred to.
CrVJL APPELLATE .TUR!SDICTION: Civil Appeal No. 7 Of 1968.
Appeal by special leave from the judgment and order dated
February 23, 1967 of the Calcutta High Court ~n Appeal No. 195
·Of 1966.
H
M. C. Chag/a, N. R. Khaitan, Lila Seth, 0. P. Khaitan a11J
:8. P. Maheshwari, for the appellant.
A
PILLANI INVESTMENT CORP. v. I.T.O. (Sikri, C.J.)
503
B. Sen, A. N. Kirpal, R. N. Sachthey and B. D. Sharma, for the
respondents.
M. C. Setalvad, T. A. Ramachandran and D. N. Gupta for
intervener No. 1.
B
P. C. Bhartari, J. B. Dadachanji, 0. C. Mathur and Ral'inder
c
D
E
F
G
.H
Narain, for intervener No. 2.
The Judgment of the Court was delivered ·by
· Sikri, C.J.
This appeal by special leave is directed against
the judgment of the High Comt of Calcutta (D. N. Sinha, C.J.,
and A. K. Mukerjee, J.) dismissing the appeal of the appellants
from the judgment of B. C. Mitra, J., dismissing an application
under Art. 226 of the Constitution made by the appellant.
The
Division Bench .followed the decision of this Court in M; M. Parikh
v. Navanagar Transport & Industries(').
The order impugned in the application is dated May 13, 1964.
By this order the Income-tax Officer stated that "on scrutiny of
the records for the year of account relevant to the assessment
year 1955-56 it has been noticed that the Company did not
declare any dividends at its general meeting, even though there
were sufficient profits available for doing so and that there were '
no losses incurred in the earlier years."
He also noticed that
"during the relevant period the Company was one in which the
public were not substantially interested in tenns of sub-section 9
of section 23A." He concluded that "the provisions of Section
23A are, therefore, applicable and the Company is liable to pay
additional Super-Tax as per provisions of law." The Income-
tax Officer thereupon called upon the Company to show cause in
writing why an order under section 23A be not passed.
The
appellant company protested that an order under s. 23A would
be an order of assessment or reassessment within s. 34 ( 3) of the
Indian Income Tax Act, 1922, and, therefore, would be barred. Excerpt shown. Read the full judgment & AI analysis in Lexace.