Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act 1961 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Income Tax Act, 1961 - s. 226(3) - Interpretation of - Assessee defaulter of payment of income tax - UTI holding units under the Scheme on assessee's behalf - Income Tax Department issuing notice to UTI raising demand on account of income tax penalty by assessee - UTI selling units below par without assessee's consent and making part payment - High Court holding units to be redeemed at par - Correctness of - Held: UTI could not have tranferred the amount, in absence of any right of option of repurchase of units having been exercised by assessee - s. 226(3)(vi) cannot be interpreted to mean that UTI was fully authorised to dispose of the units on its own - UTI could hold the amount only when assessee had exercised his option - More so, assessee made sincere efforts to pay tax - Thus, assessee to be restituted with the dividend declared on the amount.Respondent-assessee invested Rs.65 lakhs in Monthly Income Plan of Unit Trust of India under Capital Gains Scheme in 1998 to seek exemption under section 54AE of the Income Tax Act, 1961. The capital invested in the scheme was protected on maturity. The face value of the units was Rs.10/- and the units were not to be redeemed below par. Respondent defaulted in payment of income tax. Income Tax Officer issued notice to the appellant-Unit Trust of India under section 226(3) of the Act raising a demand of Rs.48,08,000/- from the amount held by UTI for or on account of assessee, regarding the income tax penalty imposed on the respondent. Appellant calculated the unit price at the rate of Rs.6.93 per unit and paid Rs.43,69,083.30 to the Department. Though the units were transferred, their value had not become due to the assessee on the date on which such notice was given. Respondent filed writ petition challenging the action of the appellant in resorting to sale of the units without his consent. High Court held that the respondent was entitled to the redemption value of the units at the rate of Rs.10/- per unit after five years. Hence the present appeals. Appellant-UTI contended that the respondent being a defaulter and the appellant having been holding the units on its behalf, the High Court erred in passing the impugned judgment; that the units were transferable on the day on which the payments were made and keeping in view the purported tenor of the notice in terms whereof the appellant was to be treated as assessee-in-default, it had no other option but to make payment. |
Judge | Hon'ble Mr. Justice S.B. Sinha |
Neutral Citation | 2007 INSC 1040 |
Petitioner | Administrator Trust Of India |
Respondent | B.m. Malani And Ors. |
SCR | [2007] 10 S.C.R. 1138 |
Judgement Date | 2007-10-11 |
Case Number | 4792 |
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