HIGH COURT OF
Commissioner of Income-tax
v.
Best Plastics (P.) Ltd.
T. S. THAKUR AND J. M. MALIK, JJ.
IT APPEAL NO. 951 OF 2005
APRIL 5, 2006
Section 119 read with section 260A of the Income-tax Act,
1961 - Central Board of Direct Taxes - Instructions to subordinate authorities
- Assessment year 1995-96 - Assessee’s return was taken up for scrutiny in
violation of CBDT circular providing that if returned income is 30 percent more
than income of earlier assessment year, assessee’s case should not be
scrutinised under Instruction No. 1922 dated 9.3.1995 - Whether since circulars
issued by CBDT are binding on officers of department, assessment order passed
pursuant to such scrutiny was to be set aside - Held, yes
FACTS
The assessee’s
return was taken up for scrutiny in violation of the CBDT circular according to
which if the returned income is 30 per cent, more than the income of the
earlier assessment year, the case of the assessee should not be scrutinised
under Instruction No. 1922 dated 3-9-1995 which
extended the operation of the circulars to the assessment year 1995-96
also. The assessment order passed by the Assessing Officer pursuant to such scrutiny was set aside by
the Commissioner (Appeals) and the Tribunal relying upon a decision of the
Supreme Court in the case of Commissioner
of Customs v. Indian Oil Corpn. Ltd. [2004] 267 ITR 272/136 Taxman
491 held that the circulars issued by
the CBDT are binding on the officers of the department.
On revenue’s
appeal under section 260A:
HELD
No substantial
question of law arose for consideration in the light of the settled legal
position emanating from the judgment of the Supreme Court. Accordingly the appeal was to be dismissed. [
CASE REVIEW:
Commissioner
of Customs v. Indian Oil Corpn. Ltd. [2004] 267 ITR 272/136 Taxman 491 (SC)
- Followed and UCO Bank v. CIT [1999] 237 ITR 889./104 Taxman 547 (SC) -
Followed