9911796707
TMI Blog2023 (7) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... rities held by petitioner had accrued to petitioner as on 31st March 1997 and as such was liable to tax under Section 5 of the Act. The 2nd Respondent further held that a sum of Rs. 12,73,80,111/- being interest received by petitioner in the Financial Year 1996-97 (Assessment Year 1997-98) and offered as income was in fact income of the preceding year, i.e., Assessment Year 1996-97 and was wrongly offered to tax in Assessment Year 1997-98. Accordingly 2nd Respondent brought to tax in Assessment Year 1997-98 a sum of Rs. 12,43,39,738/- (incorrectly mentioned as Rs. 12,46,39,738/-) being the difference between Rs. 25,17,79,849/- accruing in Assessment Year 1997-98 and Rs. 12,73,80,111/- offered by petitioner as income for Assessment Year 1997-98. 3. On 24th March 2000 petitioner filed an application under Section 245 C (Application for settlement of cases) of the Income Tax Act, 1961 (the Act) before the Settlement Commission in respect of Assessment Year 1997-98. The application was filed only for surrendering its claim for depreciation on certain leased assets. 4. Petitioner's application was admitted on 22nd November 2000 by 1st Respondent, viz., The Settlement Commission. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and further reliefs as this Hon'ble Court may deem fit. 5. Rule was issued on 3rd July 2007 and Ad-interim relief in terms of prayer clause (d) was granted. 6. Mr. Thakkar submitted :- (a) Since it is the order of the Settlement Commission, the law is well settled that a challenge to order of Settlement Commission when made in a petition under Article 226 of the Constitution of India the court should be concerned only with the legality of procedure followed and not with the validity of the order. But as held by the Hon'ble Apex Court in Jyotendrasinhji vs. S.I. Tripathi and Orbs 1993 Supplementary (3) SCC 389 (SC), it is also well settled that the scope of an enquiry by the court should also consider whether the order of the Commission is in conformity with the provisions of law or contrary to the provisions and that such contravention has caused prejudice to petitioner. If the order of the Commission is contrary to the provisions of law certainly the court should interfere. (b) All the interest which the Assessing Officer (AO) wanted to add was on Government of India securities. The interest received was offered in the return of income as income, but the interest accrued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in India includes all income from whatever sources derived which accrues or arises or is deemed to accrue or arise in India. 9. We do not agree with the submissions made by Mr. Suresh Kumar. 10. As held by this court in Mahindra and Mahindra Ltd. vs. Union of India through Secretary and Ors. 2022 SCC OnLine Bom 3155, the High Court, after considering the judgment of the Hon'ble Apex Court in Jyotendrasinhji (supra), has held that the law is very clear that though the order of the Commission is in the nature of a package deal and it may not be possible always to dissect its order and the assessee should not be permitted to accept what is favourable to him and reject what is not, if the Court is satisfied that the order of the Commission is contrary to the provisions of the Act, the Court should interfere. 11. We are satisfied that the order of the Commission on this aspect, i.e., interest accrued but not due is contrary to the provisions of the law. The Settlement Commission in our view has not given any reasons also. It has simply stated that it agrees with the CIT (D/R)'s view. The finding of the Commission reads as under : 4.3 Decision We would agree with the CIT (D/R)'s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Commission has not dealt as to why these judgments in case of E.D. Sassoon & Co. Ltd. (supra) and State Bank of Bikaner & Jaipur (supra) are not applicable. As held by the Bombay High Court in Credit Suisse First Boston (Cyprus) Ltd. (supra) the right to receive interest on Government securities vested in assessee only on the due date mentioned in the securities. Consequently, the interest accrued on the securities only on the due dates and cannot be said to have accrued to assessee on any date other than the dates stipulated therein. Therefore, in our view the conclusion arrived at by the Settlement Commission under this head is not in conformity with the provisions of law and certainly such a contravention would prejudice petitioner. 14. Mr. Suresh Kumar had also submitted that the judgment of the Bombay High Court in Credit Suisse First Boston (Cyprus) Ltd. (supra) was a later judgment, delivered much after the Settlement Commission passed the impugned order. Mr. Suresh Kumar also stated that the judgment of the High Court relied upon by Mr. Thakkar as also the orders passed by ITAT for subsequent Assessment Years from 1998-99 onwards were passed after the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed later on would have retrospective effect clarifying the legal position which was earlier not correctly understood. 43. Salmond in his well-known work states; "(T)he theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicata or accounts that have been settled in the meantime". (emphasis supplied) 44. It is no doubt true that after a historic decision in Golak Nath v. State of Punjab AIR 1967 SC 1643, this Court has accepted the doctrine of 'prospective overruling'. It is based on the philosophy: "The past cannot always be erased by a new judicial declaration". It may, however, be stated that this is an exception to the general rule of the doctrine of precedent. 15. Before we part, we should also note, in our view no reasons have been given by the Settlement Commission. In Jyotendrasinhji (supra) Revenue had argued that the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
