1,00,00,000 by March 15, 1966.
In view of this amendment, the Income tax Officer by his letter dated January 10,1966 informed the assessee that on the unpaid balance of tax arrears the respondent would be liable to pay interest at the rate of 6 per annum with effect from April 1, 1965 instead of 5 as agreed to by the Income tax officer in his previous letter.
76 to 80 of 1971 From the Judgment and orders dated the 17th October, 1968 of the Madhya Pradesh High Court in Misc.
The assessee had agreed to pay the arrears in the following manner Rs.
The writ petition before the High Court succeeded and the respondents right to exemption was upheld by the High Court.
The respondent thereafter moved the Hi h Court of Madhya Pradesh for cancelling the order of the Commissioner refusing exemption.
Soon after the request of the assessee was granted by the Income tax officer, sub s. 2 of s. 220 of the Act was amended by the Finance Act, 1965 by which the rate of interest was increased from 4 to 6 per annum.
1,20,00,000 by March 15, 1967.
As a result of the cancellation of the exemption, a huge amount of income tax became due from the respondent, and the provisional assessments made for the years 1959 60 to 1965 65 reached the aggregate amount of over Rs.
C. Sharma, P. L. Juneja and S. P. Nayar, for the appellant.
S, Chowdhury, Leila Seth and U. K. Khaitan, for respondent.
In 1947 the then Maharaja of Gwalior granted to the firm exemption from tax for a period of twelve years from the date when the firm started its factories.
1,34,76,000 by March 15, 1968.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The Income tax officer pointed out that this companyrse was necessitated in view of the amendment made by the Finance Act, 1965.
In view of these favourable terms offered by the assessee, the Income tax officer acceded to its request by his letter dated January 16, 1965.
2 and 3 of the Income tax Act, 1961.
277, 279 to 282 of 1966.
Petitions No.
The Judgment of the Court was delivered by FAZAL ALI, J. These appeals are by Income tax officer, A Ward, Indore, against the judgment of the Madhya Pradesh High Court and involve a question of law regarding the interpretation of s. 220 sub ss.
The Commissioner was approached again for granting exemption but he refused to do so.
The respondent firm carries on the business of manufacturing cloth.
In order to understand the scope and ambit of the question involved, it may be necessary to mention a few facts leading to these appeals.
Under the Part States Taxation Concessions Order, 1950 the Commissioner of Income tax of the region companycerned approved of the exemption only to the weaving division of the respondent for ten years, but deferred decision regarding the staple fibre division until the factory started functioning in 1954.
6.60 crores which was payable by the firm was actually demanded from the respondent.
Thereafter the Revenue filed an appeal to this Court which was allowed and by its order dated April 28, 1964 reported in 1964 53 T.R. 466 this Court reversed the decision of the High Court and maintained the order of the Commissioner refusing exemption.
