Law: Income Tax Act, 1961

Section: 147153

Income-tax----Reassessment---Information that income has escaped assessment--¬Chamber of Commerce---For the assessment years 1973-74 to 1975-76 exemption under S.11 refused by Assessing Officer and upheld by Supreme Court and so attaining finality---Subsequently proceedings under S.147(b) started in respect of subscription and entrance fee which had escaped assessment---On appeal Tribunal directing A.A.C. to consider whether assessee entitled to exemption under S.11 in respect of assessment years 1973-74 to 1976-77 in view of subsequent decision of Supreme Court in (1980) 121 ITR I---Tribunal not justified in directing Appellate Assistant Commissioner to consider question of exemption under S.11 in reassessment proceedings afresh as it had become final in view of Supreme Court decision for said three years---Indian Income Tax Act, 1961, Ss. 147 & 153. The assessee was a company registered under section 25 of the Companies Act, 1956. A section 25 company is not a trading company and is in the nature of a mutual association, as its members contribute and the affairs of the company are carried on through such contributions. The assessee company was carrying out functions of what is commonly known as a Chamber of Commerce. For assessment years 1973-74, 1974-75 and 1975-76, the Assessing Officer refused the assessees claim for exemption under section 11 of the Inc me Tax Act, 1961, and this was upheld by the Supreme Court in Indian Chamber of Commerce v. CIT (1975) 101 ITR 796 and as such had become final. Thereafter, proceedings were started under section 147(b) with regard to two items relating to the assessees income for the above years, relating to subscription and entrance fees, which had escaped assessment. The legal position was then concluded by the declaration of law by the Supreme Court to the effect that these two items and others in regard to section 25 companies are taxable. The Appellate Assistant Commissioner while confirming the decision of the Income-tax Officer to reopen the assessment under section 147(b) of the Act, however, held that there was no escapement whatsoever because the assessee would be entitled to get the protection of section 11…

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