WALDIES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference under Section 256(1) of the Income-tax Act, 1961. The facts of the case are as follows: The ITO completed the income-tax assessment for the assessment year 1964-65 on March 29, 1965, and determined the tax payable by Messrs. Waldies Ltd., at about Rs. 1,68,000. The assessment under the Surtax Act was made on March 30, 1965. Later on, the ITO thought that he had wrongly held the assessee-company to be a widely held company and, therefore, resorted to Section 147 for the purpose of withdrawing the concession granted to it on the basis that it was a widely-held company. This order under Section 147 was passed in September, 1968. The AAC cancelled this order under Section 147 in November, 1970. In March, 1971, the ITO gave effect to the AAC's order under the Income-tax Act. In April, 1971, the ITO thought of rectifying the order under Section 13 of the Companies Profits (Surtax) Act, 1964, passed in September, 1968. The order under Section 13 of the Surtax Act passed by the ITO gave relief to the assessee under the Surtax Act by allowing the additional tax liability arising from the order under Section 147 to be deducted from the chargeable profits. After the passing of the AAC's order in November, 1970, the order under Section 13 passed in September, 1968, by the ITO under the Surtax Act needed revision. The order passed in September, 1968, had given relief to the assessee under the Surtax Act as stated above and the same was required to be withdrawn. The ITO, therefore, passed the order under Section 13 of the Surtax Act in April, 1971, modifying or amending the order under Section 13 passed in September, 1968, and giving effect to the AAC's order passed in November, 1970, under the Income-tax Act.

(2.) An appeal was preferred by the assessee to the AAC. It was contended that the order under Section 13 was bad in law because there was no mistake apparent from the record. The next contention was that the order under Section 13 was barred by limitation. Both the objections were overruled and the appeal was dismissed.

(3.) Being aggrieved by the order of the AAC, the assessee came up in appeal before the Tribunal. The Tribunal held that the ITO's action was justified both in law and in equity. Accordingly, the appeal was dismissed.