Law: Income Tax Act, 1922

Section: 66A(2)

Section 261, read with section 147 of the Income-tax Act, 1961 [Corresponding to section 66A(2), read with section 34 of the Indian Income-tax Act, 1922], read with article 133 of the Constitution of India - Supreme Court - Appeals to - ITO - Applicant sought grant of certificate under article 133 to appeal to Supreme Court from of High Court rendered in writ application under article 226 relating to income-tax proceedings taken under section 34 of Income-tax Act, 1922 seeking to bring to tax certain interim payments received by landholders for being dispossessed of their estates under Estates Abolition Act - Whether order of High Court made in writ application to quash income-tax assessment orders or to prohibit an ITO from proceeding under machinery of Income-tax Act in any of its aspects cannot he termed to be s in civil proceedings within meaning of article 133 and, therefore certificate under article 133 cannot be granted in respect of such order - Held, yes - Whether, therefore, ITO (applicant) was not entitled to grant of certificate under article 133 - Held, yes FACTS Two landholders were under the Estates Abolition Act dispossessed of their estates and compensation was paid to them in lieu thereof. In terms of the said Act certain further payments referred to as interim payments were also made to them. The department took proceedings under section 34 and sought to bring those interim payments to assessment. One of the writ applications related to a case where such an assessment had in fact been made. In the others, the matter stood at the stage of notices under section 34. It was in these circumstances that applications were filed under article 226 of the Constitution seeking to have the order of assessment in the one case and the proceedings under section 34 in the remaining cases quashed. The High Court held that those interim payments were not income but, capital receipts for the loss of the assets which were the income producing assets belonging to the petitioners. It was this decision of the High Court that was sought to be taken up in appeal before the Supreme Court. On application by the ITO under article 133 of Constitution praying for issue of…

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