We are clearly of the opinion that in the present case, the conduct of the D.R.I. officers is not only high handed but it is in gross abuse of the powers vested in them under the Customs Act. It is apparent that the D.R.I. officers in utter disregard to the order passed by the Commissioner of Customs (A), Mumbai have forced the petitioners to pay the amount by threat and coercion which is not permissible in law. Thus, the conduct of the D.R.I. officers in the present case in collecting the amount from the petitioners towards the alleged differential duty is wholly arbitrary, illegal and contrary to law. Having terrorised the petitioners with the threat of arrest, it is not open to the D.R.I. officers to contend that the amount has been paid by the petitioners voluntarily. We strongly condemn the high handed action of the D.R.I. officers in totally flouting the norms laid down under the Customs Act in relation to reassessment proceedings and purporting to collect the amount even before reassessment. We hope that such incidents do not occur in the future

Though it is the settled position under the common law that the term “owner” means a person who has valid title legally conveyed to him after complying with the requirements of law such as Transfer of Property Act, Registration Act, etc, a different view has to be taken in the context of S. 22 of the Act having regard to the ground realities and the object of the Act, namely, “to tax the income”. Accordingly, the term “owner” means a person who is entitled to receive income from the property in his own right.” There is no requirement that there has to be a registered Deed of conveyance for a person to be treated as an owner for purposes of S. 22.

S. 149, which imposes the limitation period, requires the notice to be “issued” but not “served” within the limitation period. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the AO to proceed to reassess. Service is not a condition precedent to conferment of jurisdiction but it is a condition precedent to the making of the order of assessment;

Where an assessee has his own funds as well as borrowed funds, a presumption can be made that the advances for non-business purposes have been made out of the own funds and that the borrowed funds have not been used for this purpose. Accordingly, the disallowance of the interest on the borrowed funds is not justified.

Where an assessment is made u/s 115JA of the Act, an assessee is not liable to pay interest for non-payment/shortfall of advance tax u/ss 234B and 234C of the Act. CIT v. Kwality Biscuits Ltd 284 ITR 434 (SC) followed;

Where the ITAT decided the appeal against the assessee by relying on judgements that had not been cited by the Departmental Respresentative and without giving the assessee an opportunity to explain why those judgements had no application to the assessee’s case, the High Court set aside the order of the Tribunal for a fresh hearing.

A non-resident whose income is liable to deduction of tax at source under s. 195 is not liable to pay advance tax u/s 209 (1)(d). Consequently, there can be no liability on such assessee u/s 234B for shortfall in advance tax.

Where the ITO conducted a survey u/s 133A of the Act on the premises of the Petitioner, a practicing Chartered Accountant, and impounded books of account /documents belonging to the Petitioner and retained such books of account/documents and the Petitioner filed a Writ Petition to challenge the same, HELD, allowing the Petition:

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.

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.