New Delhi, May 18 (UNI) The Supreme Court has ruled that if the accounts of a company are maintained in accordance with the requirements of the Companies Act (CA), the Income Tax Department has no jurisdiction to re-scrutinise the accounts to ascertain whether the accounts have been maintained as per the CA.
According to the Act, accounts of a company have to be scrutinised and certified by the Statutory Auditors and the same will have to be approved by the company in its annual general body meeting and after seeking approval of the general body, the accounts are to be filed with the registrar of the company, who has statutory obligations to examine and satisfy himself that the accounts of the company have been maintained as per the requirements of the CA.
A bench comprising Justices Ashok Bhan and Dalveer Bhandari, while allowing the appeals of Malayala Manorama Company Ltd against the judgement of the Kerala High Court dated November 13, 2001 in its judgement observed,'' We have heard the ld counsel for the parties at length and carefully perused the written submission filed by them. In our considered opinion the controversy involved in this case is no longer Res Integra.'' ''A three-Judge bench of this court in Apollo tires (Supra) has clearly interpretated Secton 115 J of the 1961 Act. There is no scope for any further discussion. Consequently, the appeals are allowed and the impugned order of the High Court is accordingly set aside,'' the judgement added.
Assessing Officer of the Income Tax Department had demanded Rs 27,29,420 which included a surcharge of Rs 1,29,972 from the appellant company. The order was challenged in the company law board and finally the matter reached the apex court after the company lost upto the High Court.
Section 115 J of the Finance Act was introduced from April 1, 1988 for imposing minimum tax on the companies filing zero tax returns. The sole aim of the Section was to bring certain companies within the net of income tax as the companies were manipulating their accounts in such a manner so as to attract either no tax or very little tax.
Such companies are liable to pay at least 30 per cent of its book profits as shown in its own account in the previous year.
UNI SC LPB RP KN2032