Law: Income Tax Act, 1961

Section: 141

Law: Income Tax Act, 1961

Section: 141

JUDGMENT Kan Singh, J.-We have before us three writ petitions under article 226 of the Constitution questioning the validity of certain provisional assessments made under section 141 of the Income-tax Act, 1961, hereinafter to be referred as the "Act", and as common questions of law are involved in them they can conveniently be disposed of together. As there is no dispute on facts, it will be sufficient to narrate the facts from Writ Petition No. 51 of 1964 (Jaipur Udhyog Ltd. v. Commissioner of Income-tax). The petitioner No. 1 is a joint stock company registered under the Companies Act and runs a cement factory at Sawai Madhopur and is engaged in the business of manufacturing and distributing cement. The petitioner No. 2 is a shareholder of the company. They claim that the factory was established by the company in pursuance of an agreement between the company and the erstwhile Jaipur State whereby the company was exempted from the payment of all taxes including taxes on income for a period of 15 years from the date the company started the manufacture of cement from April, 1953. The petitioners proceed to say that in spite of this agreement the Income-tax Officer assessed the company to income-tax. Aggrieved of this the petitioner-company filed a writ petition before this court whereby it challenged the assessment order on the ground that on account of the immunity of taxes conferred by the Ruler of the former Jaipur State the income-tax department had no jurisdiction to assess the company. This writ petition was, however, dismissed by this court on November 21, 1963. Against that decision, of course, the petitioner-company has obtained a certificate from this court for appealing to the Supreme Court. The company continued to file its income-tax returns and the position about the assessment of these years will be clear from the subjoined statement: Assessment year Returned figure Assessed figure Rs. Rs. 1954-55 Loss 61,24,270 Loss 22,53,457 1955-56 Profit 4,59,963 Profit 19,84,447 1956-57 Profit 12,92,958 Profit 16,88,480 1957-58 Loss 23.05,305 Loss 12,53,222 1958-59 Loss 40,44,779 Loss 31,48,707 1959-60 Loss 28,77,487 Pending. 1960-61 Loss 11,35,365 " 1961-62…

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