Law:

Section:

Section 176 of the Income-tax, Act 1961 [Corresponding to section 25 of the Indian Income-tax, Act 1922] - Business discontinued -Assessee was a well known member of Bar and an Advocate practicing - He was assessed to income tax - In 1941 he was arrested and during that period he could not practice - He discontinued his practice and claimed relief under section 25(3) of 1922 Act - Whether where a persons suffers an uncertain period of imprisonment of this kind he may well feel at commencement that all hopes of further practicing at Bar has disappeared and that all he can do is to wind up his practice or suspends it - Held, yes - Whether it is really a question of fact whether there was a discontinuance of a profession or business in a particular case - Held, yes - Whether since assessee had discontinued his business, he was entitled to relief under section 25(3) of 1922 Act - Held, yes FACTS The assessee was a well known member of the Bar and an Advocate practicing. He was assessed to income-tax. In 1941 he was arrested and during that period he could not practice and discontinued his practice. He dismissed his clerk and also gave up his chamber., which was acquired by him. He claimed relief under section 25(3). The Income-tax authorities held that relief under section 25(3) could not possibly be allowed because no assessee could claim relief more than once under section 25(3). If an assessee has claimed relief and been given relief under section 25(3) then that particular business or that particular practice must be regarded as having come to an end. If a business or a practice is resumed at some later date it would be a business or a practice which had never been charged under the provisions of the Indian Income-tax Act, 1918, and-therefore even if such business had been discontinued, such discontinuance would not attract the provisions of section 25(4). In short, what the Income-tax authorities sought to establish before the Tribunal was that the practice which the assessee was carrying on in 1941 was not a practice which had been charged to income-tax under the 1918 Act as the earlier practice had been discontinued in 1932 and relief had been given to him…

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