TMI Blog2010 (11) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... COMMON ORDER All the three writ petitions are against and arising out of Income Tax Assessment orders of the petitioner's company and attachment of the properties belonging to the petitioner's company for the recovery of the income tax arrears for the period in question. While WP.29083 of 2007 is filed against the order of the first respondent/Commissioner of Income Tax, Chennai thereby refusing to condone the delay in filing the revision under Section 264 of the Act filed against the assessment order for the assessment year 1995-96, other two writ petitions are filed for lifting the order of attachment of 64,21,765 equity shares held by the petitioner company in M/s.Indowind Energy Limited and for lifting the garnishee order on the income due from TNEB in respect of two wind mills owned by the petitioner company towards the arrears of income tax due from the petitioner for the assessment years concerned. 2.As the result of WP.No.29083/2007 is likely to have bearing on the issue involved in the other two writs, all the three writ petitions are for the purpose of effective and proper adjudication of the issue involved therein, being disposed of by common order. 3.The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Customs has by order 27.1.2005 held that the disallowance of capital portion of lease rent paid by Bank of Madura was confirmed, however, the appellant shall be entitled to deduct the sub lease rent received against the disallowance of lease rent paid and total income was enhanced for all the assessment years by disallowing the interest portion of the lease rent paid. The petitioner company has filed further appeals before the Appellate Tribunal, however, the petitioner has subsequently withdrawn his appeals filed before the appellate Tribunal. The petitioner has thereafter come forward with the revision under Section 264 in respect of the assessment for the assessment year 1995-96 along with the petition to condone the delay in filing the revision and the petition to condone the delay was dismissed. As against which, the petitioner preferred W.P.No.29083 of 2007. 5.During pendency of the proceedings, as referred to above, the petitioner company has been issued with demand notices for payment of Income Tax arrears for Block Assessment Years from 1993-94 and assessment years 96-97, 97-98 and 98 to 99 periodically and the last demand notice is dated 24.11.2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be given an opportunity to contest the assessment in respect of the particular year on merits. 9.It is further contended by the learned counsel for the petitioner that the demand for tax arrears to the tune of Rs.4crores is for the block assessment years as well as the assessment years as referred to above and the petitioner has been seriously contesting his tax liability for the block assessment in Income Tax Appeals no.536/2005 and 550/2008 pending before the High court Tax Bench and in the event of his claim being accepted in the Tax Appeals as well as in the revision sought to be filed in respect of assessment year 1995-96, the same is likely to drastically reduce his tax liability and the amount already paid will be more than what is due from him and the petitioner is likely to get refund of the excess amount paid by the same. The petitioner has also in the writ petitions filed herein and in his various representations addressed to the Tax Recovery Officer and the Commissioner of Income Tax and in the revision petition sought to be filed belatedly explained in detail as to how disallowance made by the assessment officer is erroneous and as to how his claim for deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of his statement. It is nobody's case that the assessment order involving lease transactions and the capital involved in such transaction with M/s. Bank of Madura Limited, is served on the petitioner and the petitioner is only aware of the order much after the same was passed. Equally no knowledge can be attributed to the petitioner with regard to nature of the order likely to be passed for the subsequent assessment years. The petitioner has categorically stated that he was influenced to file revision only after final order in respect of assessment orders for assessment year 1996-1997 to 1998-1999 is passed and the definite case of the petitioner is that the cause of action for filing the revision petition arises only on 27.1.2005, the date on which CIT appeals were decided finally and the very object and purpose in filing the revision is to avoid inconsistency and to have confirmity and regularity with the decision in respect of the same transaction between the same parties. 12.As a matter of fact, the petitioner has also, in order to file revision petition, withdrawn his further appeals preferred by him against the order dated 27.01.2005 before the appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent finding with regard to delay, as such the impugned order dismissing the delay petition without properly and liberally exercising the discretionary power is liable to be set aside so as to enable the petitioner to get opportunity to contest the revision petition on merits. 16.It is also note worthy to mention that Section 264 of the Income Tax Act 1961 empowers the Commissioner either on his own motion or on an application made by the assessee to call for the record of any proceedings under the Act and pass such order thereon not being an order prejudicial to the assessee and this power has been conferred upon the Commissioner in order to enable him to give relief to the assessee in cases of over-assessment. The power conferred on him is wider in terms, is the observation of the Division Bench of Gujarat High Court in the cases reported in 1994 Vol 210 ITR 797 in Digvijay Cement Company Limited v. Commissioner of Income Tax and another and in Vol. 211 ITR 926 in J.J. Corporation v. Commissioner of Income tax and another, wherein it is held that the revisional power is coupled with a duty to exercise it in the interests of justice of the parties and the revisional authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the Supreme court and the Tax Appeal Benches of various High Courts are of the view that the endeavour of the revisional authority shall be to dispose of the case on merits so as to give relief, if any, to the assessee and not to refuse to extend the relief on the ground of mistake committed by the assessee or on the ground of ignorance of his right. The observations of the Hon'ble supreme Court, Division Bench of our High Court and various High Courts are, in my opinion, applicable to the facts of the present case and the same would compel this court to set aside the order impugned in W.P.No.29083 of 2007 and to condone the delay with further direction to the revisional authority to treat the revision petition filed as intime and to dispose of the same on merits after giving due opportunity to the petitioner company for being personally heard and to produce any documents to substantiate his claim. 20.In so far as the prohibitory order dated 24-11-2004 and garnishee order dated 31.3.2010 are concerned, it is seriously contended by the learned counsel for the petitioner that the order impugned herein rendered the petitioner's entire source of income to be closed which intur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of argument herein expressed no objection for adjusting the amounts lying in the bank accounts towards tax arrears. The petitioner has also no objection for prohibitory order in respect of income pertaining two windmills to be kept in force and to be collected and adjusted by the department towards the arrears till the finality is reached in the proceedings pending in respect of block assessment years and assessment year 1995-96. However, what is appealed by the petitioner before this court is that out of 64,21,765 equity shares which is the subject matter of garnishee order dated 31.3.2010 impugned in W.P.No.8751 of 2010, the number of shares to be sufficient to meet out the discharge of tax liabilities may be retained and the garnishee order in respect of the remaining shares may be released to enable the petitioner company to utilise the same for the purpose of making improvement in the business activities. It is further submitted by the petitioner that as the market value of the shares is approximately Rs.30 crores, the portion of the same is sufficient enough to discharge the entire disputed liability. 23.Such appeal made by the petitioner is seriously opposed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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