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CHEQUE BOUNS CASE

Income Tax Act, 1961 – s.271 (1)(c) – Levy of penalty under – Where assessed income is nil or loss – Permissibility of – Held: Penalty is leviable, even if no tax was payable. Judgment: Cryptic judgment – Held: Brevity without clarity is likely to enter the realm of absurdity, which is impermissible – Guidelines regarding writing of judgment – Reiterated. Writing of judgment – Guidelines issued by Supreme Court regarding manner of writing judgments – Non-adherence of – Deprecated. The question for consideration in the present appeals was whether penalty can be levied u/s.271(1)(c) of Income tax Act, where assessed income is loss, despite the fact that Explanation 4(a) was added to the Act and subsequently, further clause (a) was replaced by another clause (a) which is clarificatory in nature. Allowing the appeals, the Court HELD: 1.1. The Division Bench of High Court has decided the question of law as projected before it in the appeal preferred u/s.260(A) of the Income Tax Act, 1961, in a most casual manner. The order is not only cryptic but does not even remotely deal with the arguments which were sought to be projected by the Revenue before it. It is true that brevity is an art but brevity without clarity is likely to enter into the realm of absurdity, which is impermissible. This is what has been reflected in the impugned order. This Court, time and again, reminded the courts performing judicial functions, the manner in which judgments/orders are to be written but, those guidelines issued from time to time are not being adhered to. Therefore, the Court once again would like to reiterate few guidelines for the Courts, while writing orders and judgments to follow the same. [Paras 3, 4, 5 and 6] [751-E-H; 752-A] 1.2. The guidelines are only illustrative in nature, not exhaustive and can further be elaborated looking to the need and requirement of a given case: (i) Nothing should be written in the judgment/order, which may not be germane to the facts of the case. It should have a co-relation with the applicable law and facts. The ratio decidendi should be clearly spelt out from the judgment/order. (ii) After preparing the draft, it is necessary to go through the same to find out, if anything, essential to be mentioned, has escaped discussion. (iii) The ultimate finished judgment/order should have flow and perfect sequence of events, which would continue to generate interest in the reader. (iv) Appropriate care should be taken not to load it with all legal knowledge on the subject as citation of too many judgments creates more confusion rather than clarity. The foremost requirement is that leading judgments should be mentioned and the evolution that has taken place ever since the same were pronounced and thereafter, latest judgment in which all previous judgments have been considered, should be mentioned. While writing judgment, psychology of the reader has also to be borne in mind, for the perception on that score is imperative. (v) Language should not be rhetoric and should not reflect a contrived effort on the part of the author. (vi) After arguments are concluded, an endeavour should be made to pronounce the judgment at the earliest and in any case not beyond a period of three months. Keeping it pending for long time sends a wrong signal to the litigants and the society. (vii) It should be avoided to give instances, which are likely to cause public agitation or to a particular society. Nothing should be reflected in the same which may hurt the feelings or emotions of any individual or society. [Para 7] [752- B-H; 753-A-C] 1.3 . In the instant case, considering the important question of law and its wide repercussions, it was least expected from the Division Bench of the High Court to have dealt with the issue more seriously, keeping in mind the question of law that was being answered by it. At the High Court level, when a matter is considered on merits by a Division Bench, not only factual but even legal aspect of the matters is required to be considered at some length. [Paras 11 and 21] [754-C; 756-F] 2.1. The purpose behind Section 271(1)(c) of the Income Tax Act, 1961 is to penalise the assessee for – (a)concealing particulars of income and / or (b) furnishing inadequate particulars of such income. Whether income returned was a profit or loss, was really of no consequence. Therefore, even if no tax was payable, the penalty was still leviable. It is in that context, to be noted that even prior to the amendment it could not be read to mean that if no tax was payable by the assessee, due to filing of return, disclosing loss, the assessee was not liable to pay penalty even if the assessee had concealed and/or furnished inadequate particulars. [Para 24] [757-B-C] 2.2. Some of the High Courts had taken a contrary view, thus, Parliament in its wisdom thought it fit to clarify the position by changing the expression “any” by “if any”. Thus, this was not a substantive amendment which created imposition of penalty for the first time. The amendment by the Finance Act of the relevant year as specifically noted in the notes on clauses shows that proposed amendment was clarificatory in nature and would apply to all assessments even prior to the assessment year 2003-2004. [Para 25] [757-D-E] 2.3. Even if Assessee has disclosed NIL income and on verification of the record, it is found that certain income has been concealed or has wrongly been shown, in that case, penalty can still be levied. [Para 30] [759-D] CIT vs. Gold Coin Health (P) Ltd. (2008) 304 ITR 308 (SC), relied on. CIT vs. Elphinstone Spinning and Weaving Mills Co. Ltd. XL ITR 142, distinguished. Virtual Soft Systems Ltd. vs. CIT (2007) 289 ITR 83 SC; CIT Vs. Harprasad and Co. P. Ltd (1975) 99 ITR 118; Reliance Jute and Industries Ltd. vs. CIT (1979) 120 ITR 921, referred to. Case Law Reference: 304 ITR 308 (SC) Relied on. Para 19 CIT (2007) 289 ITR 83 SC Referred to. Para 20 (1975) 99 ITR 118 Referred to. Para 27 CIT (1979) 120 ITR 921 Referred to. Para 27 XL ITR 142 Distinguished. Para 31 CIVIL APPELLATE JURISDICTION : Civil Appeal No(s). 4278 of 2010. From the Judgment & Order dated 08.08.2006 of the High Court Gujarat at Ahmedabad in Tax Appeal No. 1905 of 2005. With C.A. No. 4279 of 2010 Mohan Parasaran, ASG, V. Shekhar, H.R. Rao, D.L. Chidanand (for B.V. Balaram Das) for the Appellant. D.N. Sawhney, Bhargava V. Desai, Rahul Gupta, Nikhil Sharma for the Respondent

REPORTABLE

Punch cartoon (1907); illustrates the unpopula...

Punch cartoon (1907); illustrates the unpopularity amongst Punch readers of a proposed 1907 income tax by the Labour Party in the United Kingdom. (Photo credit: Wikipedia)

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4278 OF 2010
[Arising out of SLP(C) No.5241 of 2007]
Joint Commissioner of Income Tax,
Surat ….Appellant

Versus

Saheli Leasing & Industries Ltd. ….Respondent

WITH

CIVIL APPEAL NO.4279 OF 2010
[Arising out of SLP(C)No.5242 of 2007]
J U D G M E N T

Deepak Verma, J.

1. Leave granted.

2. The facts of both the appeals being identical, the

facts of civil appeal arising out of S.L.P.(C)

No.5241 of 2007 are being referred to in this

judgment.

3. On a first flush, after bare perusal of the impugned

order passed in Revenue Tax Appeal No. 1904 of 2005,

decided on 8.8.2006 by Division Bench of the High

Court of Gujarat at Ahmedabad, we thought of

remanding the matter for a fresh decision on merits,
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
2
in accordance with law but, on a deeper and studied

scrutiny, we thought it apt instead of directing to

remit, it would be just and proper to consider the

matter on merits ourselves and to set at rest the

legal controversy involved in the appeal. It is

further so that Division Bench in the impugned order

has decided the question of law as projected before

it in the appeal preferred under Section 260 (A) of

the Income Tax Act, 1961, (hereinafter referred to

as ‘the Act’) in a most casual manner. The order

is not only cryptic but does not even remotely deal

with the arguments which were sought to be projected

by the Revenue before it.

4. This Court, time and again, reminded the courts

performing judicial functions, the manner in which

judgments/orders are to be written but, it is,

indeed, unfortunate that those guidelines issued

from time to time are not being adhered to.

5. No doubt, it is true that brevity is an art but

brevity without clarity likely to enter into the

realm of absurdity, which is impermissible. This is

what has been reflected in the impugned order which

we would reproduce hereinafter.

6. We, therefore, before proceeding to decide the
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
3
matter on merits, once again would like to reiterate

few guidelines for the Courts, while writing orders

and judgments to follow the same.

 

7. These guidelines are only illustrative in nature,

not exhaustive and can further be elaborated looking

to the need and requirement of a given case:-

a) It should always be kept in mind that nothing
should be written in the judgment/order, which may
not be germane to the facts of the case; It should
have a co-relation with the applicable law and
facts. The ratio decidendi should be clearly
spelt out from the judgment / order.

b) After preparing the draft, it is necessary
to go through the same to find out, if anything,
essential to be mentioned, has escaped discussion.

c) The ultimate finished judgment/order should
have sustained chronology, regard being had to the
concept that it has readable, continued interest
and one does not feel like parting or leaving it
in the midway. To elaborate, it should have flow
and perfect sequence of events, which would
continue to generate interest in the reader.

d) Appropriate care should be taken not to load
it with all legal knowledge on the subject as
citation of too many judgments creates more
confusion rather than clarity. The foremost
requirement is that leading judgments should be
mentioned and the evolution that has taken place
ever since the same were pronounced and
thereafter, latest judgment, in which all previous
judgments have been considered, should be
mentioned. While writing judgment, psychology of
the reader has also to be borne in mind, for the
perception on that score is imperative.

e) Language should not be rhetoric and should
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
4
not reflect a contrived effort on the part of the
author.

f) After arguments are concluded, an endeavour
should be made to pronounce the judgment at the
earliest and in any case not beyond a period of
three months. Keeping it pending for long time,
sends a wrong signal to the litigants and the
society.

g) It should be avoided to give instances,which
are likely to cause public agitation or to a
particular society. Nothing should be reflected
in the same which may hurt the feelings or
emotions of any individual or society.
8. Aforesaid are some of the guidelines which are

required to be kept in mind while writing judgments.

In fact, we are only reiterating what has already

been said in several judgments of this Court.

9. Aforesaid background has been given after going

through the impugned judgment of Division Bench of

the High Court. Following substantial question of

law, as contemplated under Section 260 A of the

Act, was formulated to be answered by it :

“Whether, on the facts and in the
circumstances of the case, and in law, the Income
Tax Appellate Tribunal is right in coming to the
conclusion that where assessed income is loss,
penalty cannot be levied under section 271 (1) (c)
of the Income Tax Act in spite of the fact that
Explanation 4 (a) was added in the Income Tax Act
with effect from 1.4.1976 and subsequently,
further clause (a) was replaced by another clause
(a) which is in clarificatory nature, with effect
from 1.4.2003?”
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
5

10. However, the Division Bench in its wisdom thought it

fit to dispose of the appeal as under:-

“Admitted facts are that the appellant has filed
return showing loss and the income is also
assessed as “NIL income”. When the return was
shown as loss as well as assessment of income is
also NIL, no penalty under Section 271 (1) (c) of
the Income Tax Act is attracted. No case is made
out for admission of the appeal. The appeal
stands dismissed at admission stage.

Sd/- Judge
Sd/- Judge”
11. Considering the important question of law and its wide

repercussions, it was least expected from the Division Bench

of the High Court to have dealt with the issue more

seriously, keeping in mind the question of law that was

being answered by it.

12. Feeling aggrieved, this appeal has been preferred by

Revenue before us.

Factual matrix is as under:-

13. On return being filed by the Respondent/Assessee, an

order under Section 143 (3) of the Act was passed on

27.2.1998, showing total income of Rs. NIL for assessment

year 1995-1996.

14. During the course of assessment proceedings, it was

noticed that Assessee had claimed depreciation, which was

viewed to be incorrect. Thus, an amount of Rs. 24,22,531/-
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
6
was disallowed out of depreciation. Penalty proceedings

under Section 271 (1) (c) of the Act were initiated. In

response to the show cause notice issued by the Revenue,

Assessee filed its reply denying the allegations and

contending that no penalty can be imposed on it, when

returned income was NIL.

15. Penalty was sought to be imposed in respect of an item

having an effect in reducing the loss. No appeal was filed

against the item, added to the income on account of which

the loss was reduced. Admittedly, Assessee, a leasing

company had claimed depreciation on plant and machinery @

100% on various items. The statement of depreciation filed

along with the computation of income showed the claim at

Rs.1,05,08,824/-. On enquiries being made it was revealed

that 100% depreciation was claimed along with Lease

Agreements entered into with different parties. Even

though, terms and conditions of the Lease Agreements entered

into with different parties were the same, except the names

of the parties had been changed. Even after dis-allowance

of the said depreciation, the taxable income of the Assessee

was NIL and hence, there was no tax liability. According to

Assessee, in such a case no penalty under Section 271 (1)

(c) could have been levied.

16. Deputy Commissioner of Income tax, Special Range-2,
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
7
Surat, on the basis of the discussion in the order held that

Assessee was liable to pay penalty, with reference to such

additions to income to be treated as its total income, with

reference to explanation 4 (a) to Section 271 (1) (c) of the

Act. Accordingly, the penalty was levied on concealed

income of Rs. 24,22,531/- at minimum rate of 100% of tax

sought to be evaded. Thus, a penalty of Rs. 11,14,364/- was

imposed on the Assessee.

17. Feeling aggrieved thereof, Assessee preferred an appeal

before the Commissioner of Income Tax (Appeals-II).

Considering various judgments of the Tribunal and the High

Courts, the appeal of the Assessee came to be dismissed and

penalty levied on it stood confirmed.

18. Assessee preferred further appeal before the Income-Tax

Appellate Tribunal, Ahmedabad. Tribunal, on the strength of

an earlier order passed by Special Bench of Ahmedabad

Tribunal in the case of Apsara Processors (P) Ltd. and Ors.

in ITA No. 284/Ahd./2004 dated 17.12.2004 came to the

conclusion that no penalty can be levied, if the returned

income and the assessed income is loss. Accordingly, the

orders passed by the Assessing Officer as well as

Commissioner (Appeals) were set aside and quashed and the

penalty imposed on the Assessee was deleted. It was this

order of the Tribunal which was carried further by filing
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
8
Appeal under Section 260A of the Act in the High Court,

which met the fate of dismissal by the Division Bench.

19. Shri V. Shekhar, learned senior counsel appearing for

the appellant at the outset contended that the point

projected in this appeal stands answered in favour of the

Revenue by a judgment of Bench of three learned Judges of

this Court reported in (2008) 304 ITR 308 (SC) titled CIT

Vs. Gold Coin Health (P) Ltd.

20. In Gold Coin (supra) an earlier judgment of this

Court, reported in (2007) 289 ITR 83 SC titled Virtual Soft

Systems Ltd. Vs. CIT, pronounced by two learned Judges has

been over-ruled.

21. It is pertinent to point out here that in Gold Coin

(supra), what was being challenged by the Revenue, was the

order passed by same Bench of the High Court of Gujarat at

Ahmedabad, which finds place at page 309, wherein before

proceeding to decide the matter, the three learned judges of

this Court thought it fit to reproduce the same. The

question of law as projected in Gold Coin (supra) before the

High Court and the question of law as projected in this

appeal is identical but what is being deciphered by us is

the manner in which the impugned judgment has been written

and pronounced. After all, at the High Court level, when a

matter is considered on merits by a Division Bench, not only
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
9
factual but even legal aspect of the matters is required to

be considered at some length.

22. The matter of Gold Coin (supra) was placed before three

learned judges of this Court, as correctness and propriety

of the order passed by two learned judges of this Court in

Virtual Soft Systems (supra) was doubted. Thus, to clear

the doubts, on the correct exposition of law, a three Judge

Bench was constituted which decided the matter in Gold Coin

(supra).

23. It is to be seen that purpose behind Section 271 (1)(c)

of the Act is to penalise the Assessee for –

a)concealing particulars of income and / or
b)furnishing inadequate particulars of such income.

24. Whether income returned was a profit or loss, was really

of no consequence. Therefore, even if no tax was payable,

the penalty was still leviable. It is in that context, to be

noted that even prior to the amendment it could not be read

to mean that if no tax was payable by the Assessee, due to

filing of return, disclosing loss, the Assessee was not

liable to pay penalty even if the Assessee had concealed

and/or furnished inadequate particulars.

25. Some of the High Courts had taken a contrary view,

thus, Parliament in its wisdom thought it fit to clarify the

position by changing the expression “any” by “if any”.
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
10
Thus, this was not a substantive amendment which created

imposition of penalty for the first time. The amendment by

the Finance Act of the relevant year as specifically noted

in the notes on clauses shows that proposed amendment was

clarificatory in nature and would apply to all assessments

even prior to the assessment year 2003-2004.

26. Thus, in Gold Coin (supra), after combined reading of

the recommendations of Wanchoo Committee, and Circular

No. 204 dated 24.7.1976, it was clarified that points had

been made clear with regard to Explanation 4 (a) to Section

271 (1) (c) (iii) to intend to levy penalty not only in a

case where after addition of concealed income, a loss

returned, after assessment becomes positive income, but also

in a case where addition of concealed income reduces the

returned loss and finally the assessed income is also a loss

or minus figure. Therefore, even during the period between

1.4.1976 and 1.4.2003, the position was that penalty was

still leviable in a case where addition of concealed income

reduces the returned loss.

27. In the aforesaid case, the expression “income” in the

statute appearing in Section 2 (24) of the Act has been

clarified to mean that it is an inclusive definition and

includes losses, that is, negative profit. This has been

held so on the strength of earlier judgments of this Court
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
11
in CIT Vs. Harprasad and Co. P. Ltd (1975) 99 ITR 118 and

followed in Reliance Jute and Industries Ltd. Vs. CIT (1979)

120 ITR 921. After elaborate and detailed discussion, this

Court held with reference to the charging provisions of

statute that the expression “income” should be understood to

include losses. The expression “profits and gains” refers

to positive income whereas “losses” represent negative

profit or in other words minus income.

28. Considering this aspect of the matter in greater

details, Gold Coin (supra) over-ruled the view expressed by

two learned judges in Virtual Soft Systems (supra).

29. Relevant paras 11 and 12 of Gold Coin (supra) dealing

with income and losses are reproduced herein below:-

“11. When the word “income” is read to include
losses as held in Harprasad’s case it becomes
crystal clear that even in a case where on
account of addition of concealed income the
returned loss stands reduced and even if th
final assessed income is a loss, still penalty
was leviable thereon even during the period
April 1, 1976 to April1, 2003. Even in the
Circular dated July 24, 1976, referred to
above, the position was clarified by the
Central Board of direct Taxes (in short “the
CBDT”). It is stated that in a case where on
setting off the concealed income against any
loss incurred by the Assessee under any other
head of income or brought forward from earlier
years, the total income is reduced to a figure
lower than the concealed income or even to a
minus figure the penalty would be imposable
because in such a case ‘the tax sought to be
evaded” will be tax chargeable on concealed
income as if it is “total income”.
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
12

12. Law is well-settled that the applicable
provision would be the law as it existed on the
date of the filing of the return. It is of
relevance to note that when any loss is
returned in any return it need not necessarily
be the loss of the concerned previous year. It
may also include carried forward loss which is
required to be set up against future income
under Section 72 of the Act. Therefore, the
applicable law on the date of filing of the
return cannot be confined only to the losses of
the previous accounting years.”

30. The necessary consequence thereof would be that even if

Assessee has disclosed NIL income and on verification of the

record, it is found that certain income has been concealed

or has wrongly been shown, in that case, penalty can still

be levied. The aforesaid position is no more res integra

and according to us, it stands answered in favour of the

Revenue and against the Assessee.

31. The learned senior counsel appearing for the respondent

Assessee, Mr. D.N Sawhney, contended that the observations

made in Gold Coin (supra) can at best be treated as obiter

but not as binding precedent. According to him, the

earlier judgment of the Coordinate Bench in CIT Vs.

Elphinstone Spinning and Weaving Mills Co. Ltd. XL ITR 142,

would still hold the field and applies fully to the facts of

the said case.

32. Much emphasis has been laid on the following

observations in Elphinstone (supra) reproduced hereinbelow :
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
13
“There is no doubt that if the words of a
taxing statute fail, then so much the tax.
The courts cannot, except rarely and in clear
cases, help the draftsmen by a favourable
construction. Here, the difficulty is not one
of inaccurate language only. It is really
this that a very large number of taxpayers are
within the words but some of them are not.
Whether the enactment might fail in the former
case on some other ground (as has happened in
another case decided today) is not a matter we
are dealing with at the moment. It is
sufficient to say there that the words do not
take in the modifications which the learned
counsel for the appellant suggests. The word
“additional” in the expression “additional
income-tax” must refer to a state of affairs
in which there has been a tax before. The
words “charge on the total income” are not
appropriate to describe a case in which there
is no income or there is loss. The same is
the case with the expression “profits liable
to tax” The last expression “dividends
payable out of such profits” can only apply
when there are profits and not when there are
no profits.

It is clear that the Legislature had in
mind the case of persons paying dividends
beyond a reasonable portion of their income.
A rebate was intended to be given to those who
kept within the limit and an enhanced rate was
to be imposed on those who exceeded it. The
law was calculated to reach those persons who
did the latter even if they resorted to the
device of keeping profits back in one year to
earn rebate to pay out the same profits in
the next. For this purpose, the profits of
the earlier years were deemed to be profits of
the succeeding years. So far so good. But
the Legislature failed to fit in the law in
the scheme of the Indian Income-tax Act under
which and to effectuate which the Finance Act
is passed. The Legislature used language
appropriate to income, and applied the rate to
the “total income”. Obviously, therefore, the
law must fail in those cases where there is no
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
14
total income at all, and the courts cannot be
invited to supply the omission made by the
Legislature.”

 
33. In a first glance, after considering arguments of both

sides, we thought that matter required to be referred to a

larger Bench for considering the issue involved in this

appeal but on deeper scanning of the judgments in Gold Coin

(supra) and Elphinstone (supra), we came to the conclusion

that the ratio decidendi of Gold Coin (supra) fully covers

the issue and the case of Elphinstone (supra) has no

application to the facts of the said case.

34. Both cases are distinguishable on the following broad

grounds, namely:

(i) Gold Coin Health (supra) arose under

the Income Tax Act, 1961, whereas Elphinstone(supra)

arose under the repealed Income Tax Act of 1922.

(Though this is only a distinguishing feature noticed

in 2 decisions which is not of much significance).

(ii) The question that fell for consideration in Gold

Coin (supra) was what would be the true

interpretation of Section 271 (1) (c) in the context

of amendments made therein whereas, the question in

Elphinstone (supra) was in relation to chargeability
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
15
of “additional tax” on “dividend income” earned by

Assessee under paragraph – B of First Schedule to the

Income Tax Act, 1922.

 

(iii) Elphinstone (supra) interpreted five

words occurring in para-B of First Schedule namely;

“additional”, “additional Income Tax”, “charge on

the total income”, “profits liable to tax” and

lastly, “dividends payable out of such profits”,

whereas, in Gold Coin’s case, the question arose

whether word “income” includes loss for the purpose

of imposition of penalty u/s 271 (1) (c) and if

Assessee incurs loss in any particular year then

whether penalty u/s 271 (1) (c) can still be imposed

on him. This has been categorically answered in Gold

Coin (supra) in favour of Revenue and against the

Assessee.

(iv) The object of imposing penalty is different than

that of determining Assessee’s liability to pay tax

or additional tax under any charging section. The

interpretation applied to penalty provision thus,

cannot be applied while interpreting any charging

section for payment of income tax or additional tax.

In other words, both provisions i.e. penalty and
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
16
charging have different objects and consequences.

They operate in different fields qua Assessee.

(v) The liability to pay additional tax under First

Schedule on the income earned out of dividend implies

that Assessee is first required to pay “tax” and then

additional tax on the specified income. It was

basically this issue which was examined in

Elphinstone (supra) wherein Their Lordships

considered the object for enacting first para of

schedule. This object has nothing to do with penalty

provisions.

(vi) A particular word occurring in one Section

of the Act, having a particular object cannot carry

the same meaning when used in different Section of

the same Act, which is enacted for different object.

In other words, one word occurring in different

Sections of the Act can have different meaning, if

the object of the two Sections are different and when

both operate in different fields.

(vii) Question of law involved in this appeal is

directly covered by the decision of Gold Coin (supra)

and is to be answered accordingly.

(viii) Elphinstone (supra), therefore, has no bearing

over the view taken in Gold Coin (supra) case and
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
17
even if it had been taken note of, the decision taken

therein would have been the same due to

aforementioned distinguishing feature.

 

(ix) The issue involved in Gold Coin (supra) being

entirely different than the one involved in

Elphinstone (supra), the view taken by this Court in

both the decisions are correct operating in the

respective fields, requiring no reconsideration of

the matter.

(x) In order to enable the Court to refer any case

to a larger Bench for reconsideration, it is

necessary to point out that particular provision of

law having a bearing over the issue involved was not

taken note of or there is an error apparent on its

face or that a particular earlier decision was not

noticed, which has a direct bearing or has taken a

contrary view. Such does not appear to be a case

herein. Thus, it does not need to be referred to a

larger Bench as in our considered opinion; it is

squarely covered by the judgment of this Court in

Gold Coin (supra).

35. In the light of the aforesaid discussion, we have no

doubt in our mind that the ratio of Elphinstone (supra) has
C.As. @ SLP (C) No. 5241 of 2007 etc…. (contd.)
18
no application to the facts of the case and the question of

law projected stands squarely answered in favour of the

Revenue and against the Assessee in Gold Coin (supra) as a

result thereof, appeal by Revenue stands hereby allowed.

Impugned order passed by Income Tax Appellate Tribunal and

confirmed by Division Bench are hereby set aside and

quashed. The Revenue, therefore, would be at liberty to

proceed further against the Assessee on merits in accordance

with law.

36. Appeals stand allowed as mentioned hereinabove but with

no order as to costs.

 

…………………..CJI
[K.G. Balakrishnan]
………………..
…J.
[Deepak Verma]

 

…………………..J.
[B.S. Chauhan]
New Delhi.
May 07, 2010

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