CIT vs. Meghalaya Steels Ltd (Supreme Court)

DATE: August 5, 2015 (Date of pronouncement)
DATE: August 18, 2015 (Date of publication)
AY: -
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S. 260A: High Courts, being Courts of Record under Article 215, have the inherent power of review. There is nothing in s. 260A(7) to restrict the applicability of the provisions of the CPC to s. 260A appeals

In an appeal under s. 260A, the Guwahati passed an order (332 ITR 91) in which it held that transport subsidies and other incentives were not eligible for relief u/s 80-IB. The assessee filed a review petition (358 ITR 551) in which it contended that the High Court had gone on to answer the questions without first framing substantial questions of law. The High Court allowed the review petition and recalled the judgement. Thereafter, it passed a judgement (CIT v. Meghalaya Steels Ltd. [2013] 356 ITR 235) in which it held that the said transport subsidies and other incentives were eligible for relief u/s 80-IB. The department argued before the Supreme Court that under section 260A (7), only those provisions of the Civil Procedure Code could be looked into for the purposes of Section 260A as were relevant to the disposal of appeals, and since the review provision contained in the Code of Civil Procedure is not so referred to, the High Court would have no jurisdiction under Section 260A to review such judgment. HELD by the Supreme Court dismissing the appeal:

High Courts being Courts of Record under Art. 215 of the Constitution of India, the power of review would in fact inhere in them. This was in fact so decided in a slightly different context while dealing with the power of review of writ petitions filed under Art.226 by a judgment reported in AIR 1963 SC 1909 5 (Shivdeo Singh & Ors. Vs. State of Punjab and Ors.). It is also clear that on a cursory reading of Section 260A (7), the said Section does not purport in any manner to curtail or restrict the application of the provisions of the Code of Civil Procedure. Section 260A(7) only states that all the provisions that would apply qua appeals in the Code of Civil Procedure would apply to appeals under Section 260A. That does not in any manner suggest either that the other provisions of the Code of Civil Procedure are necessarily excluded or that the High Court’s inherent jurisdiction is in any manner affected.

Note: This reverses CIT Vs. West Coast Paper Mills Limited 319 ITR 390 (Bom), Automobile Corporation of Goa Ltd 206 Taxman 640 (Bom) and Deepak Kumar Garg vs. CIT 327 ITR 448 (MP) where it was held that the High Court has no power of review u/s 260A and affirms D. N. Singh vs. CIT 325 ITR 349 (Patna)(FB)
One comment on “CIT vs. Meghalaya Steels Ltd (Supreme Court)
  1. what the revenue thinks of articles of constitution ? i sometimes wonder how the revenue assumes itself and the income tax act 1961 as if a schedule IX provision, it ought to know very government of India are just Art.12 set up, though Courts are too but Articles made the custodian courts of the constitution, that way very SC in Coelho v st of TN by judicial review struck down Schedule Ix THOUGH was product of First constitutional amendment of government of india.

    so Governments need to be thorough in constitutional superiority of the very constitution of india as the custodian of the constitution.

    i would add, any govt has to be within the limitation of power.

    See income tax Act 1961 is the find of the British system of indian laws then, but in fact though permitted to be used the governments failed to prune many of its provisions, though then British govt really carefully worked after 1215 magna carta signed by King John of England. so British parliament functioned very carefully unlike Indian parliament.

    if Indian parliament understood the indian constitution, it would never have attempted so many constitutional amendments, and i can confidently say here our legislators assumed so many powers after all our parliament- loksabha as also state assemblies are filled with legislators who need not be literates, as any illiterate could be a law maker, even that man remained under control of public servants but once our lawmaker takes a seat as a cabinet minister he or she thinks they are above rule of law. that is the bane of indian parliamentary democracy.

    Now see very CPC sections are definitely applicable on the indian income tax act is amply cleared in several hon SC judgements but how come our so called ‘educated ‘ indian revenue service men is ignorant as also their panel advocates, that is worrying a common man as he cannot have wherewith all to fight the revenue till hon SC, is the issue here.

    besides i would add, why hon S C did not impose penalty on the Revenue men, once bitten then the so called public servants would behave meaningfully.

    Hon SC need not give too much consideration to the panel advocates, the court need to pass strictures on the panel advocates too so that they would learn the law better, else they would be a menace to the indian society.

    At least next time let hon SC better pass serious strictures on all these worthies, though are said to be literates…’educated’ lot.

    if these kind of educated lot are given positions they would be worse disease to the indian democracy.

    I would have appreciated if the law makers were rightly guided that ever tax payer is a share holder of the governments in place and their share need be responded by necessary notional dividend and notional interest rates return… what is happening today is politicians in power and all such worthies systematically rob the nation by so many methods like the honorariums and allowances, pensions facilities what not but in fact they being social workers should not take more than a rupee as honorarium, as all the posts they hold just honorific positions only. when these worthies would learn is anybodies guess.

    whether indian democracy understand if the tax payers are paid dividends and rates of interest on the their tax payments they make you can very well say the black money generation would just disappear like dew in the morning sun.

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