Under the Right to Information Act, the Court is required to provide information as to the assets declared by the Judges.

Where the Supreme Court declined to provide information as to whether the judges had declared their assets on the ground that the Chief Justice of India and the Supreme Court of India are two distinct Public Authorities and that the Registry of the Court does not hold the information requested, HELD, rejecting the stand:

(i) The Supreme Court of India is an institution created by the Constitution and is, therefore, a Public Authority within the meaning of Section 2(h) of the Right to Information Act;

(ii) The declaration of assets by the judges cannot be said to be provided to the Chief Justice of India in his personal capacity or in a “fiduciary” capacity;

(iii) The information concerning the Judges of the Supreme Court is available with the Supreme Court and the CPIO represents the Supreme Court as a Public Authority. Under the RTI Act, he is, therefore, obliged to provide this information to a citizen making an application under the RTI Act.

Division Bench judgement that Court has no power to condone delay in excise appeals overruled

In Shruti Colorants a Division Bench held that where there was a delay in filing Appeals u/s 35G of the Central Excise Act (= s. 260A of the IT Act), the Court had no power to condone the delay by taking recourse to s. 5 of the Limitation Act.

This view is incorrect because by virtue of s. 29(2) of the Limitation Act, where a statute is silent, the provisions of s. 5 of the Limitation Act applies and the Court has power to condone delay.

Accordingly, Shruti Colorants is overruled.

See Also: CCE vs. Hongo India (Supreme Court) and Ornate Traders vs. ITO (Bombay High Court).

Arbitrary assessment orders can be struck down

Where the AO issued a show-cause notice alleging that the Appellant was not an “new undertaking” eligible for deduction u/s 10B but in the assessment order denied deduction on the different ground that the activity of the assessee did not constitute “manufacturing” without considering any of the several judgements on the issue, HELD that arbitrariness was writ large on the face of the assessment order and that the same had to be quashed by the Court by exercise of its extraordinary powers under Article 226 of the Constitution even though the assessee had alternative remedies of appeal against the said order.

Limitation period for levy of penalty

Though s. 275(1) (c) provides that the limitation for levy of penalty shall be “after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later”, in a case where the initiation of action for imposition of penalty is not in the course of some proceedings (e.g. penalty u/s 271B for failure to get accounts audited u/s 44AB and non-filing of audit report), the first part of s. 275(1)(c) would have no application and it is only the period of limitation prescribed in the second part which would apply. Since only one period of limitation would be applicable, the expression “whichever period expires later” would have to be read as that very period of limitation.

Levy of Penalty u/s 158BFA is not automatic

Where the Tribunal found that there was a bona fide surrender of undisclosed income and the question arose whether penalty u/s 158BFA (2) could be levied on the difference between the returned income and the assessed income, HELD

(a) Where the assessment was on the basis of surrender, there was no “determination” of undisclosed income by the AO u/s 158 BC (c) which is the requirement for imposition of penalty;

(b) The general proposition laid down in Sir Shadilal Sugar and General Mills Ltd 168 ITR 705 (SC) that the surrender of undisclosed income made by an assessee to buy peace did not necessarily lead to the conclusion that the amount surrendered was indeed concealed income, cannot be said to have been overruled in K.P. Madhusudhanan 251 ITR 99 (SC);

(c) Levy of penalty u/s 158 BFA (2) is discretionary and not automatic notwithstanding the use of the word “shall”.

Extension of time limit for completion of block assessment order by making new panchnamas.

HELD in the context of s. 158BE (1) (b) which imposes a time limit for making a block assessment order with reference to the date of execution of the last of the authorizations for search u/s 132 which in turn is deemed to be the date of the conclusion of search as recorded in the last panchnama drawn that:

(i) a search is essentially an invasion of the privacy of the person whose property or person is subjected to search;

(ii) normally, a search must be continuous;

(iii) if it cannot be continuous for some plausible reason, the hiatus in the search must be explained;

(iv) if no cogent or plausible reason is shown for the hiatus in the search, the second or “resumed” search would be illegal;

(v) by merely mentioning in the panchnama that a search has been temporarily suspended does not, ipso facto, continue the search. It would have to be seen as a fact as to whether the search continued or had concluded;

(vi) merely because a panchnama is drawn up on a particular date, it does not mean that a search was conducted and/or concluded on that date;

(vii) the panchnama must be a record of a search or seizure for it to qualify as the panchnama mentioned in Explanation 2(a) to section 158BE of the said Act.

See Also: CIT vs. Plastika Enterprises (Bom) where the panchnama was found to have been made only to get over the limitation issue.

The AO should not take advantage of the assessee’s ignorance of the law.

Where the assessee erroneously offered capital gains to tax and the same was accepted by the AO vide Intimation u/s 143 (1)(a) and the assessee thereafter filed an appeal against such assessment of capital gains and the same was held not maintainable by the Tribunal, HELD, reversing the order of the Tribunal that:

(1) In view of the Explanation to s. 143 (prior to its deletion w.e.f. 1.6.1999) an Intimation is deemed to be an appealable order and appeal is maintainable;

(2) The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. If particular levy is not permitted under the Act, tax cannot be levied applying the doctrine of estoppel.