Law: Income Tax Act, 1922

Section: 23(3),34,15BB,66(1),33(6)

Law: Income Tax Act, 1922

Section: 23(3),34,15BB,66(1),33(6)

Income-tax Act, 1922 -- Sections 23(3), 33(6), 34, 15BB(4AA) (inserted by Finance Ordinance 1972) --Reassessment -- Tribunal's decision that dividend income derived from Tax Holiday company was not liable to tax -- Matter not pursued by Department by way of Reference to High Court and decision becoming final -- Reassessment proceedings initiated for the same year and dividend included in taxable income consequent upon insertion of sub-section (4AA) in Sec. 15BB by Finance Ordinance, 1972, deeming to have always been so inserted -- Whether illegal and without jurisdiction -- Held yes --Order of Tribunal not assailed by Department in reference under section 66(1) -- Held, such order attained finality under section 33(6) -- Retrospective insertion of subsection (4AA) to section 15BB could not operate to destroy valid given by Tribunal much earlier --Income-tax Officer, without studying legal aspect of matter, resorting to proceedings causing unnecessary harassment and litigation to assessee -- Such hurried action of Income-tax Officer held deplorable -- ORDER The order was passed by MIAN ABDUL KAHLIQ, Judicial Member. ---This second-appeal at the instance of the assessee is led against the order passed by the learned Appellate Assistant Commissioner of Income-tax A-Range, whereby the assessment pertaining to charge year 1969-70 processed under Section 23(3)/34 of the Income-tax Act(hereinafter referred to as the Act) on 6-6-1975 was confirmed. The relevant facts of the case are that the appellant is one of the Directors of K Group of Companies whose income stood exempted under Section 15BB of the Act till the assessment year 1970-71. For the year under review originally assessment was made on 28-10-1970 wherein the Income-tax Officer included dividend income of Rs. 60,122/- derived from tax holiday companies. In the Departmental appeals the Tribunal confirmed the Appellate Assistant Commissioner's order of modifying the assessment holding that the dividend income derived from companies enjoying exemption under Section 15BB could not be included in the assessee's income vide its order in ITA No. 2071 of 1970-71 dated 5-7-1971. The department did not assail the…

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