TMI Blog2016 (6) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... When we find from the facts that the petitioner has no basis for contending that the income of ₹ 4,94,20,595/- of royalty cannot be in law taxed for the assessment year 1996-1997, merely because the Assistant Commissioner of Rajkot passed an order which in plain terms baffles us and on closer scrutiny is not what the Tribunal ever directed, we would certainly not be persuaded to grant relief to the petitioner for sum of ₹ 4,94,20,595/- with interest which even otherwise is not due to it. - SPECIAL CIVIL APPLICATION NO. 17105 of 2015 - - - Dated:- 8-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR PRANAV G DESAI, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged an order dated 7.7.2015 passed by the respondent refusing to grant refund to the petitioner for a sum of ₹ 3,76,74,095/-. The petitioner has prayed for consequential direction for payment of such sum with interest. 2. Brief facts are as under. For the assessment year 1996-1997, the petitioner company had filed the return of income. The Assessing Officer fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 1997-98 will get carried forward and adjusted against the income for A.Y. 1998-99 and consequently, there will be a refund for A.Y. 1998-99 also. Both these refunds will be more in amount than the demand for A.Y. 1996-97. The demand for A.Y. 1996-97 may please be adjusted against this demand and the balance refund be granted to the assessee at the earliest with interest. 6. It appears that on the basis of the said communication of the petitioner dated 21.4.2002, the department also gave relief to the petitioner for subsequent assessment year 1997-1998. by deleting the protective assessment for the said year. 7. On 30.5.2005, the Tribunal decided the petitioner's appeal for the assessment year 1996-1997 in the following manner : We have heard the rival contentions. We find that assessee has entered into agreement with M/s Ajanta Electronics Pvt. Ltd. this agreement authorizes to use the trade name of AJANTA . According to this agreement, AEP has to pay royalty @ ₹ 15/- per clock to the assessee. The amount was to be paid annually within one month from the end of the financial year. The assessee has offered this amount for taxation in the subsequent year a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve assessment made in the assessment year 1997-1998. The department had acted on such request and granted the benefit in subsequent year. The assessee now cannot resile from such position and claim deletion of income also for the assessment year 1996-1997. 10. We have heard learned counsel for the parties and perused the documents on record. From the record, it clearly emerges that the issue of taxing the assessee for royalty income of ₹ 4,94,20,595/- was decided by the Assessing Officer through reassessment proceedings. Such income was taxed on substantive basis in the assessment year 1996-1997 and on protective basis in the year 1997-1998. Resultantly, tax demand of ₹ 3,76,74,095/- was raised. CIT(Appeals) confirmed the decision of the Assessing Officer upon which the assessee approached the Tribunal. During the pendency of the appeal before the Tribunal, the assessee approached the department by writing letter dated 21.4.2002 and requested that since the income is being substantially taxed for the assessment year 19961-997, the effect of protective assessment for the assessment year 19971-998 be deleted and appropriate adjustments may be made. He pointed out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reduced by an amount of ₹ 4,94,20,595/- being amount of royalty receipt which has already been taxed on substantive basis in the A Y 9697. It was also requested that the consequent refunds for A Y 1997-98 1998-99 should be adjusted against the demand for A Y 1996-97. The computation for giving such credits was also filed alongwith the said letter Accordingly on the basis of this letter the A0 vide order dated 29.04.2002, giving effect to order of the CIT(A) for A Y 1997-98 reduced an amount of ₹ 4,94,20,595/- from the assessed income and loss of ₹ 3,86,71,485/- was determined. The loss of ₹ 3,86,71,485/- determined for A.Y. 96-97 was allowed to be c/f which again was reduced from the income of the assessee in order u/s. 154 for A.Y. 98-99 passed on 03.05.2002 This exercise resulted into refund for A Y 97-98 at ₹ 1,28,65,358/- and ₹ 2,71,06,999/- for A Y 97-98. These refunds were adjusted against the demand for A Y 96-97 as requested by you. 12. We may recall before the Tribunal, the petitioner did not succeed on the issue of taxability of the royalty income. In fact, the Tribunal proceeded on the basis that the petitioner had offered suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 999 against the tax demand of ₹ 3,76,74,095/- . Under no circumstances, the assessee can resile from such position and now claim that the entire amount of ₹ 4,94,20,595/- should be deleted from the income also for the assessment year 1996-1997. Quite apart from the principle of estoppal acting against the petitioner, one must realise that the petitioner is in a writ petition which is entirely a discretionary remedy. When we find from the facts that the petitioner has no basis for contending that the income of ₹ 4,94,20,595/- of royalty cannot be in law taxed for the assessment year 1996-1997, merely because the Assistant Commissioner of Rajkot passed an order which in plain terms baffles us and on closer scrutiny is not what the Tribunal ever directed, we would certainly not be persuaded to grant relief to the petitioner for sum of ₹ 4,94,20,595/- with interest which even otherwise is not due to it. 14. Before closing we would request the department to inquire the circumstances under which Shri Mahesh Sharma, the then Assistant Commissioner of Income-tax, Central Circle1, Rajkot, passed the said order dated 3.8.2005 and take such steps departmentally or o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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