Law: Income Tax Act, 1961

Section: 254(1),263

Income-tax---Commissioner--- Revision---Appeal to Appellate Tribunal ---Remand to Commissioner--- Tribunal has power ---Indian Income Tax Act, 1961, Ss.254(1) & 263---Indian Companies Act, 1956, Ss.87 & 90. Long before the commencement of the Companies Act, 1956, the appellant-company had issued equity and preference shares both having voting rights. The Income Tax Officer treated the company as one in which the public were substantially interested. In revision, the Commissioner passed an order directing the Officer to treat the appellant company as one in which the public were not substantially interested as the voting rights could not be exercised by holders of preference shares in view of section 87 of the Companies Act. On appeal the Appellate Tribunal was of the opinion that section 87 would not apply in view of section 90 and of the fact that those shares were issued prior to the commencement of the Companies Act, 1956. The Tribunal however instead of disposing of the appeal remanded the matter to the Commissioner for passing a fresh order and on a reference the High Court held that the Tribunal had the power to make the remand order in the manner it had done: see (1978) 114 ITR 939 (Cal.). The Department took the matter in appeal to the Supreme Court. The Supreme Court dismissed the appeal holding that the decision of the High Court was unexceptionable. Hukumchand Mills Ltd. v. CIT (1967) 63 ITR 232 (SC) and CIT v. Assam Travels Shipping Service (1993) 199 ITR 1 (SC) fol. Martin Burn Ltd. v. CIT (1978) 114 ITR 939.aflirmed. ORDER DR. A.S. ANAND, J.---These appeals were filed on a certificate of fitness granted by the High…

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