Revenue submitted that any research and development activity carried out by the head office would automatically ensure to the benefit of the units/industrial undertakings. He submitted that the head office itself does not manufacture any medicines, the benefit of the research and development would be utilized for manufacturing the products and the products would obviously be manufactured by the units.
The fact that in the 80th AGM held on 30th July 2007, the audited accounts for the financial years ended 31st March 2004, 31st March 2005 and 31st March 2006 were placed and adopted makes it clear that any default in that regard by BSMCL stands condoned. No other shareholder has objected to those accounts. They are taken to be the audited accounts. Neither the ROC nor the RD, nor the OL raised any objection. The objection of Mr. H.K. Chadha that adjustment entries have to be made in the accounts prepared by BRS for an earlier period to arrive at the correct picture cannot, in the above circumstances, be countenanced. No material has been placed on record by Mr. H.K. Chadha to substantiate the plea of non-preparation of the audited accounts of the above financial years.
Bare perusal of provision shows that the sine qua non for resorting to s. 260A is the satisfaction of the Court that the appeal involves more/additional substantial question of law other than the one on which appeal was admitted for hearing. The scheme of the Act is quite clear. Decisions on factual issues are within the domain of authorities and should be sorted out before the matter reaches the High Court in appeal.
From a plain reading of sub-section (2) of Section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Income- tax Act, 1961, cannot be meant only section 139(1), but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub-section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of Section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier.
Applications for stay cannot be treated by the assessing officers or for that matter by appellate authorities as meaningless formalities. Quasi judicial authorities have to apply their mind in an objective and dispassionate manner to the merits of each application for stay. While the interest of the Revenue has to be protected, it is necessary for assessing officers to realize that fairness to the assessee is an intrinsic element of the quasi judicial function conferred upon them by law. Applications for stay must be disposed of at an early date.
Before concluding, we clarify that the observations in the present judgment are confined only to the disposal of the application for stay of the recovery of the demand against the Petitioner and shall not prejudice the rights and contentions of the assessees, the Petitioner and the Revenue in the pending appeals.
Section 263 of the Act empowers the Commissioner of Income Tax to call for and examine the record of any proceeding, if he finds that any order passed therein by the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue. But such order can be passed after giving an opportunity of being heard to the assessee. The show cause notice was issued in respect of matters under Sections 32 AB and 80 HHC of the Act and not in respect of other matters, therefore the show cause notice to be quashed only in respect of matters which were not subject matter of the show cause notice.
In this case high Court has issued guideline to Income Tax Department in respect of the following :- Uploading Of Wrong Or Fictitious Demand Adjustment Of Refund Contrary To The Mandate Of Section 245 Of The Income Tax Act Denial Of Interest Where Assessee Not At Fault Credit Of Tax Deducted At Source (TDS) Non-communication of adjusted Section 143(1) intimations
As regards the second proposed question, the facts are that the respondent! assessee had purchased the land in question sometime in 1994-96. Since then, the respondent! assessee had shown the said land in its balance sheet as a fixed asset. The same had been consistently shown as such by the respondent! assessee in all the years including the assessment year 2006-07.
Respondent took a business decision not to honour its commitment of fulfilling the export entitlement in view of loss being suffered by it. The Assessing officer does not dispute this fact nor does he doubt the genuineness of the claim of the expenditure being for business purpose. In these facts the Tribunal held that respondent assessee has not contravened any provisions of law and thus the forfeiture of bank guarantee was compensatory in nature under Section 37(1) of the Act.
