PILLANI INVESTMENT CORPORATION LTD. v. I.T.O. AWARD, CALCUTTA & ANR.
Citation: [1972] 2 S.C.R. 502; 1971 INSC 323
Court: Supreme Court of India
Bench: S.M. SIKRI , G.K. MITTER, P. JAGANMOHAN REDDY, I.D. DUA
Judgment date:
Case summary
1971 INSC 323. Supreme Court of India judgment dated 1971-11-23. PILLANI INVESTMENT CORPORATION LTD. v. I.T.O. AWARD, CALCUTTA & ANR. Read the judgment and...
Judgment text
'502 PILLANI INVESTMENT CORPORATION LTD. v. I. T. O. 'A' WARD, CALCUTTA & ANR. November 23, 1971 {S .. M. S! KRI,, C. J. , P. JAGANMOHAN REDDY, I.. D. DUA AND G. K. MITTER, JJ. ] Income-tax Act, 19'22, ss. 23A and 34(3)-S. 34(3) whether app/i- . cable to an order un t be said that the earlier decision was clearly erroneous. He drew our attention to the judgment of a Bench of seven Judges 2 in Keshav Mills v. Commissioner of Income-tax, Bombay( ) where Gajendragadkar, C. J. , speaking for the Court observed at page 921 : • "When this Court decides questions of law, its decisions are, under art. 141, binding on all courts '\\ithin the territory of Tndia, and so, it must be the constant endeavour and concern of this Court to introduce and maintain an element of certainty and continuity in the interpretation of law in the country.
Frequent exer-cise by t\lis Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the Court to be more reasonable, I> may incidentally tend to make law uncertain and introduce confusion which must be consistently avoid-ed. This is not to say that if on a subsequent occasion, the Court is satisfied that its earlier decision was clearly erroneous, it should hesitate to correct the error; but before a pervious decision is pronounced to be plainly erroneous, the Court must be satisfied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified. " Gajendragadkar, C. J.
, pointed out, among other considerations, the following considerations to be borne in mind : "On the earlier occasion, did some patent aspects of the question remain unnoticed, or was the attention of the Court not drawn to aoy relevant and material statutory provision, or was any previous decision of this Court bearing on the point not noticed ? " These observations are binding on us and, therefore we must consider the arguments of Mr. Chagla in the light of these observations. We may first point out that this point is not likely to arise under the Income-tax Act, 1961, as s. 106 thereof specifically provides a period of limitation regarding orders under s. 104, which is equivalent to s. 23A of the Income-tax Act, 1922. Mr. Chagla was not able to show us that any vital point was not considered. . He has not been able to convince us that the judgment (I) 63 I. T. R. 66J. (2) [1965] 2 S. C. R. 908, 921. PJLLANI INVESTMENT CORP. V. I. T. O. (Sikri, C. J. ) 505 is clearly erroneous.
Accordingly we must decline to review the case. We may, however, add that one point which was not noticed by this Court in M. M. Parikh's(') case or in the judgment of the High Court of Gujarat, appealed from in that case (Nava- 11agar & Industries Ltd. v. Income-tax Officer, Specia' lnvestiga· 1 tion Circle, Ahmedabad)( ) tends to show that the case was correctly decided. It seems to us that the words :·after the expiry of four years from the end of the year in which the income, profits or gains were first assessable" in s. 34 ( 3) are not really apposite to cover the order made under s. 23A, as it stood before its amendment by the Finance Act II of 1957.
Section 34 (3), without the proviso, at the relevant time read as follows : "34(3) No order of assessment or re-assessment, other than an order of assessment under section 23 to which clause ( c) of sub-section (I) of section 28 applies or an order of assessment or re-assessment in cases falling within clause (a) of sub-section (IA) of this section shall be made after the expiry of four years from the end of the year in which the income, profits or gains were first assessable. " In our view an order under s. 23A does not assess income, profits or gains as such but what it does is to levy super tax on a certain poruon of the undistributed profits and gains. The section gives indications how this amount is arrived at and it is not necessary to deal with those matters.
Further, this order is made following the expiry of the previous year as the Income-tax Officer has to take into consideration the dividend distributed within 12 months following the expiry of the previous year the profits and gains of which are being considered. In other words ·the taxable event is non-distribution of some part of profits, which have already been assessed. They were not only first assessable but assessed. It would be odd to start the beginning of the limitation period from the time when the profits were actually first assessed. Mr. Setalvad, on behalf of one of the interveners, said that the judgment of this Court in M. M. Parikh's(1) case has been interpreted in some cases to mean that the order under s. 23A is not even an order of assessment for the purposes of rectification and for other purposes. We are not concerned with that question in this case and we do not express any opinion on that point. In the result the appeal fails and is dismissed.
There will be no order as to costs. G. C. Appeal dismissed. I) 631. T. R. 663. (2) 54 l. T. R. 271.
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