COMMISSIONER OF INCOME TAX Vs. DAYA WATI MODI

JUDGEMENT

(1.) THIS is a reference under S. 256(1) of the IT Act pertaining to the asst. yr. 1969-70.

(2.) THE respondent was a shareholder of Modi Industries Ltd. and Modi Spg. and Wvg. Mills Co. Ltd. She was granted certificates of deduction of tax from dividends under r. 31(4) of the IT Rules, 1962 r/w S. 203 of the IT Act in respect of the said dividends of these two companies on the ground that these companies were newly established industrial undertakings within the meaning of ss. 80J and 80K of the Act. The said certificates were issued on the basis of certificates issued by the ITO under S. 197(3) to the Principal Officers of the Companies. On the basis of the said certificates issued by the companies, the ITO allowed deduction of a sum of Rs. 6,638 under S. 80K claimed by the respondent.

(3.) AN appeal was filed and the AAC took the view that the ITO was not justified in law in working out much less proportion of dividend once the principal officers of the companies has issued certificates under S. 197(3) of the Act. He came to the conclusion that the determination made by the ITO under r. 20 of the IT Rules, 1962 could not be amended except under S. 154. He also observed that any short or excess deduction in respect of the dividend income could only be adjusted through the process of aggregation prescribed under sub-r. (3) of r. 20 and not otherwise.