The Tax PublishersTax Cases No. 28 of 1986
2020 TaxPub(DT) 4955 (Pat-HC)INCOME TAX ACT, 1961
Section 260A
Where Amending Act introduced a new section 64(1) (iii) with effect from 1-4-1976 and Amending Act introducing a new tax liability which came into force with effect from 1-4-1976 could not be given a retrospectivity and be made applicable to the previous accounting year, i.e., 1975-76 corresponding to the assessment year, i.e., 1976-77, therefore, Tribunal was not correct in upholding the inclusion of the share income of the minor from the firm for it accrued on 10-8-1975, in the assessment year 1976-77.
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Appeal (High Court) - Assessment of income - Inclusion of share income of minor from the firm -
The issue arose for consideration before this court as to whether Tribunal was correct in law in upholding the inclusion of the share income of the minor from the firm M/s. O which had closed its accounting year on 10-8-1975 in the assessment of assessee for assessment year 1976-77 and whether the amended provision which had come into effect from 1-10-1975 would apply to an income which had accrued on 10-8-1975 for the assessment to be made for the assessment year 1976-77. Held: The Amending Act introduced a new section 64(1)(iii) with effect from 1-4-1976. The tax liability under the said provision could, therefore, be charged on the assessee, in the assessment which was to be made for that accounting year, i.e., 1976-77, which would be done in the assessment year 1977-78. The Amending Act introducing a new tax liability which came into force with effect from 1-4-1976 could not be given a retrospectivity and be made applicable to the previous accounting year, i.e., 1975-76 corresponding to assessment year, i.e., 1976-77. Therefore, Tribunal was not correct, in law, in upholding the inclusion of share income of the minor from the firm for it accrued on 10-8-1975, in the assessment year 1976-77, and the amendment which came into effect only on 1-10-1975 was to apply only prospectively and not retrospectively.
Followed: Premier Breweries Ltd v. CIT (2015) 11 SCC 695 : 2015 SCC OnLine SC 196 : 2015 TaxPub(DT) 995 (SC), Rameshwar Prasad Bagla v. CIT (1973) 3 SCC 575 : 1973 TaxPub(DT) 343 (SC), CP Sarathy Mudaliar v. CIT (1966) 62 ITR 576 (SC) : 1966 TaxPub(DT) 373 (SC), Karimtharuvi Tea Estates Limited v. State of Kerala AIR 1966 SC 1385 : 1966 TaxPub(DT) 296 (SC), Kesoram Industries & Cotton Mills Limited v. CWT (Central) AIR 1966 SC 1370 : 1966 TaxPub(DT) 256 (SC), Keshav Mills Company Limited v. CIT (1965) 2 SCR 908 : 1965 TaxPub(DT) 263 (SC) Loknath Goenka v. CIT 2019 TaxPub(DT) 5372 (Pat-HC) and Badri Prasad & Ors. v. CIT (1990) Volume (1990) 185 ITR 307 (Pat-HC) : 1990 TaxPub(DT) 926 (Pat-HC).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 1976-77
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