AO’s Lack of Application of Mind in Reassessment Renders Order Erroneous: SC

Malabar Industrial Co. Ltd. Vs CIT (Supreme Court of India) In Malabar Industrial Co. Ltd. vs. CIT, the Supreme Court upheld the Kerala High Court’s ruling affirming the Commissioner of Income Tax’s (CIT) revision under Section 263 of the Income Tax Act. The case involved the assessment year 1983-84, where Malabar Industrial Co. Ltd., a public limited company, had received ₹3,66,649 as compensation for delayed payments in a rubber plantation sale agreement. The Income Tax Officer (ITO) initially accepted this amount as compensation for agricultural income and issued a nil assessment orde...