1986 (7) TMI 1 - SC - Income Tax

Records under Super Profits Tax Act can inform income-tax s84 relief claims, but s154 rectification denied

Anchor Pressing Private Limited Versus Commissioner of Income-Tax, UP, And Others

SC held that records under the Super Profits Tax Act may form part of the income-tax record and be considered when assessing entitlement to relief under ... Rectification of Mistake - New Industrial Undertaking - exercise the jurisdiction conferred by section 154 of the Act and grant relief to the appellant under section 84 - HELD THAT:- It is apparent, that the record of an income-tax assessment can be regarded as part of the record of super profits tax assessment. The converse can also be true and that is made abundantly clear by sub-section (2) of section 20 of the Super Profits Tax Act which provides that all the information contained in any statement or return made or furnished under the provisions of the Super Profits Tax Act or obtained or collected for the purposes of that Act may be used for the purposes of the Income-tax Act. It is apparent that if the record of the super profits tax assessment contains material pertaining to the claim under section 84 of the Income-tax Act, such material can be considered by the Income-tax Officer for the purpose of granting relief under section 84 in the income-tax assessment. In that sense and to that degree, learned counsel for the assessee is perfectly right in contending that the record of the super profits tax assessment becomes part of the record of the income-tax assessment. The Additional Commissioner of Income-tax, while dismissing the revision petition of the assessee against the order of the Income-tax Officer refusing to rectify the income-tax assessment under section 154, went through the income-tax record and the super profits tax record of the assessee and found that no attempt had been made at any stage by the assessee to place facts on the record indicating that the undertaking belonging to the assessee was a new one and was entitled to relief under section 84. He noted that in the return relating to the Super Profits Tax Act, the assessee had made a claim for relief under section 84, but he pointed out that the claim had not yet been examined. It has also not been shown to us that all the material required for satisfying the conditions requisite for the grant of relief under section 84 existed on the super profits tax record at the time when the income-tax assessment was completed. When that is the position, it can hardly be said that in omitting to grant relief under section 84 when making the assessment order, the Income-tax Officer committed a mistake apparent from the record. We must remember that we are dealing with a challenge to an order refusing rectification and not to an order directly assailing the assessment. Issues:- Appeal against the judgment and order of the High Court of Allahabad dismissing a writ petition.- Claim for rebate under section 84 of the Income-tax Act.- Obligation on the Income-tax Officer to grant relief under section 84.- Conditions to be fulfilled for relief under section 84.- Relationship between the record of income-tax assessment and super profits tax assessment.- Entitlement to relief under section 84 based on the material in the super profits tax assessment record.Analysis:The Supreme Court heard an appeal against the judgment of the High Court of Allahabad, which dismissed a writ petition filed by a private limited company engaged in the manufacture and sale of locks. The company had not claimed a rebate under section 84 of the Income-tax Act during the assessment proceedings for the year 1963-64. Subsequently, the company sought rectification under section 154 of the Act to claim relief under section 84, but its application was rejected by the Income-tax Officer and the Commissioner of Income-tax, leading to the writ petition's dismissal by the High Court. The appellant contended that the authorities were obligated to grant relief under section 84, arguing that the failure to claim relief during the assessment proceedings should not preclude the Income-tax Officer from rectifying the assessment order to provide relief.The court acknowledged the obligation on the Income-tax Officer to grant relief under section 84 but emphasized the necessity of clear data in the assessment record to enable the officer to consider granting relief. Various conditions, such as the nature of the industrial undertaking and the number of employees, must be satisfied before relief under section 84 can be granted. The court highlighted that the mere existence of an obligation is not adequate; the assessment record must contain precise factual material to support the claim for relief.The appellant argued that material necessary for relief under section 84 was present in the record of the assessment under the Super Profits Tax Act, which is closely linked to the Income-tax Act. The court agreed that the record of the super profits tax assessment could be considered part of the income-tax assessment record, given their interconnectedness. However, the court noted that not all required data for satisfying the conditions of section 84 was present in the super profits tax assessment record at the time of the income-tax assessment. The Additional Commissioner found that the necessary facts indicating entitlement to relief were not provided by the appellant during the assessment proceedings, leading to the dismissal of the revision petition.Ultimately, the court held that the Income-tax Officer did not commit a mistake apparent from the record by not granting relief under section 84, as the essential material was lacking. The appeal was dismissed, emphasizing the importance of fulfilling conditions and providing necessary data to support a claim for relief under section 84.This judgment underscores the significance of meeting statutory conditions and providing clear factual material to support claims for relief under tax laws. It highlights the need for thorough documentation and compliance with legal requirements to substantiate claims for tax benefits.