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TMI Blog2010 (11) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 petitioner is the company involving in the business of leasing and hire purchase. The petitioner entered into an agreement with Bank of Madura for the purpose of transaction of purchase and lease allowing sub lease under agreement dated 26.9.1994 for a period of five years in respect of 5 furnaces of different types with accessories to the value of Rs.4 crores stated to be located at M/s. Gujarat Suspension Limited, Baroda. The lease was for Rs.3,99,50,000/-. The petitioner has also entered into sub lease agreement with M/s. Gujarat Rodrell Engineering Products Limited, Baroda whereby the lessee leased out the same equipment to the latter company for five years. While so, the assessee filed return of income for the assessment year 1995-96 on 29.11.95 in which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 demanding payment of Rs.4,60,44,541/- under section 226(3) of I.T. Act. The third respondent has on the same day, passed Garnishee order in and under which, the third respondent has attached the income from two windmills owned by the petitioner, the maintenance and operation of the same are entrusted with M/s.Indo Wind Energy Ltd. The order of attachment is, according to the petitioner, in addition to attachment of some of the bank accounts, the details of which are furnished at para 14 of the affidavit filed in support of W.P.No.8751 of 2010. 6.In pursuance of the attachment order, the income derived from Tamil Nadu Electricity Board for the supply of energy from the two windmills owned by the petitioner are being adjusted towards arrears of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 deduction is legally valid and how he is likely to succeed in his tax appeals and in the revision. Such contention raised on the side of the petitioner will considering the ground on which the revision is filed for the assessment year 1995-96, deserve merits and acceptance and in order to enable the petitioner to have the benefit, the delay in filing the revision ought to have been, as argued herein, considered more liberally in favour of the petitioner. 10.Regarding the delay on facts, it is true that the return for the assessment year 1995-96 was made only on 29.11.1995 and the same was processed and the same was communicated to the petitioner on 17.9.96. According to the petitioner, the cause of action for filing the revision against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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. Such conduct on the part of the petitioner should have been appreciated by the Assessment Officer in proper perspective and had it been done, the Assessment Officer would have liberally considered the reason for the delay in filing the revision petition. As rightly argued by the learned counsel for the petitioner, the delay ought to have been viewed in the light of the fact that it is filed within few months during April 2005 from the order dated 27.1.2005 and withdrawal of statutory appeal and the delay is to be hence held as not lacking in bonafide. However, the authority concerned has after discussing the merits of the claim, rejected petition on the ground that the reason given for the delay smacks of mala fides. Such cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. 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 authority must act according to the rules of reason and justice. The Commissioner though suo moto empowered to exercise his revisional authority, has failed to exercise the same when called upon to do so at the instance of one of the parties, and the failure to condone the delay in my considered view amounts to refusal to exercise the jurisdiction vested upon him. 17.The same Gujarat High court in the judgment reported in 1980 Vol.122 ITR 610 in C.Parikh and Co. v. Commissioner of Income tax, Baroda, is of the view that the commissioner was not right in holding either that it was not open to him to give relief to the assessee on account of the petitioner's own mistake which it detected after the assessment was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evision 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 inturn rendered himself unable to discharge his statutory liabilities. The petitioner has by way of typed set, produced various records relating to payment so far made and the representation made to stay the recovery proceeding pending disposal of Tax Appeals and revision for the block assessment years and assessment year 1995-1996 respectively on merits. However, the authority concerned has till date not passed any order therein. Such failure on the part of the authority concerned to dispose of the petition to stay recovery of arrears one way or other is also totally erroneous and is contrary to well laid down legal proposition. 21.Be that as may, as far as the arrears of tax is concerned, ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishee 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 by the respondent by saying that the value of the shares is fluctuating and the same will be only Rs.20 crores. Whether it is Rs.30 crores or 20 crores the garnishee order attaching the entire shares owned by the petitioner in the hands of M/s. Indo Wind Engergy Ltd for the recovery of Rs.2,50,00,000/- plus interest as on 31.3.2010 is not justified and reasonable. In my considered view, in order to protect the interest of both parties, the attachment may be kept in force in respect of considerable number not less than 15 lakhs shares in addition to the income from two win ..... X X X X Extracts X X X X X X X X Extracts X X X X
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