LAWS(BOM)-1983-4-3

SUBRAMANIAN K ITO Vs. SIEMENS INDIA LIMITED

Decided On April 20, 1983
K. SUBRAMANIAN Appellant
V/S
SIEMEN'S INDIA LTD. Respondents

JUDGEMENT

(1.) THIS is an appeal preferred by the ITO from the judgment of Madon, J. (as he then was) which comes before us for admission. We admit the appeal merely because we are informed that there is no earlier judgment of this Court or any other Court on the construction of S. 7 of the Companies (Profits) Surtax Act, 1964 (7 of 1964), which has been construed in the said judgment appealed against. We may, however, make it quite clear that prima facie we are completely in agreement with the construction put by the learned trial judge on S. 7 of the said Act. The learned judge has carefully set out six salient features of a provisional assessment under S. 7 of the said Act and held that in view of these features, the departure made in S. 7 of the said Act from the language used in s. 141 of the IT Act, 1961 (deleted w.e.f. from 1st April, 1971), though it may not confine the ITO only to the position as shown in the return, does not at the same time authorise him to reject that return, in whole or in part, or to refuse to accept the factual position shown therein or the legal position as then prevailing. We may point out that after laying down the above proposition, the learned judge has gone on to hold as follows.

(2.) SO far as the legal position is concerned, the ITO would be bound by a decision of the Supreme Court as also by a decision of the High Court of the State within whose jurisdiction he is (functioning), irrespective of the pendency of any appeal or special leave application against that judgment. He would equally be bound by a decision of another High Court on the point, because not to follow that decision would be to cause grave prejudice to the assessee. Where there is a conflict between different High Courts, he must follow the decision of the High Court within whose jurisdiction he is (functioning), but if the conflict is between decisions of other High Courts, he must take the view which is in favour of the assessee and not against him. Similarly, if the Tribunal has decided a point in favour of the assessee, he cannot ignore that decision and take a contrary view, because that would equally prejudice the assessee. He can, however, reject claims which are clearly and indisputably untenable and about which a different view is not rationally possible.