Wp/5358/1999 Of East India Petroleum Limited v. The Commissioner Of Income Tax

* THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM + Writ Petition No.5358 of 1999 %Date: 09.07.2014 East India Petroleum Limited. and …appellant. $The Commissioner of Income Tax and another. …Respondents ! Counsel for appellant: Sri K.Raji Reddy ^ Counsel for Respondents : Sri J.V.Prasad < GIST: > HEAD NOTE: ? Cases referred THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM Writ Petition No.5358 of 1999 ORDER:(Per the Hon’ble Sri Justice L.Narasimha Reddy) The petitioner is a Limited Company and is assessed toincome tax. In the assessment year 1997-98, the AssessingAuthority passed an order, dated 18.03.1998, taking the view that thesum covered by prima facie adjustment of Rs.79,86,590/-, underSection 143(1)(a) of the Income Tax Act, 1961 (for short ‘the Act’),was not proper, and accordingly, made a demand of Rs.47,10,108/-,as tax. Additional tax of Rs.6,86,847/-, under Section 143(1)(a) ofthe Act and interest of Rs.7,78,680/-, under Section 234B of the Act,was also demanded. The petitioner filed a revision under Section 264(3) of the Act,before the Commissioner of Income Tax, the 1[st] respondent herein. When the revision was pending, the Parliament introduced ‘KarVivad Samadhan Scheme, 1998’ (for short ‘the Scheme’), byamending the Act. It provided for the termination of the proceedingsat the stage of appeal, revision or writ petition, before any forum, incase the assessee offers to pay the amount stipulated under therelevant provisions of the Scheme. With a view to avail the benefit under the Scheme, thepetitioner submitted an application in the prescribed form on16.12.1998. Incidentally, the 1[st] respondent is the designatedauthority to process the application and he is the one, before whomthe revision filed by the petitioner was pending. The 1[st] respondentpassed an order, dated 01.02.1999, in the revision, rejecting theclaim of the petitioner. Few days thereafter, i.e. on 26.02.1999, herejected the application, filed under the Scheme. This writ petition is filed challenging the order, dated 26.02.1999. Heard Sri K.Raji Reddy, learned counsel for the petitioner, and Sri J.V.Prasad, learned Standing Counsel for the respondents. The petitioner felt aggrieved by the order passed by theIncome Tax Authority, imposing tax, penalty and interest on a sumcovered by prima facie adjustment. The remedy of revision underSection 264(3) of the Act, was availed before the 1[st] respondent. During the pendency of that revision, the Scheme came into force. Accordingly, an application was filed in the prescribed form. One of the conditions for extending the benefit under theScheme is that a revision, appeal or proceedings must be pendingbefore the Authorities or Tribunal, created under the Act, or HighCourt or Supreme Court. That condition stood fulfilled, on account ofthe pendnecy of the revision before the 1[st] respondent. A perusal ofthe Scheme discloses that the extension of benefit thereunder isindependent of merits, or otherwise of the claims in the appeals,revision or other proceedings. Further, once it emerges that anappeal, revision or other proceedings were pending by the time theapplication was filed, it hardly makes any difference, if suchproceedings are terminated by the concerned authority, unmindful ofthe pendency of the application. In the instant case, the 1[st] respondent was the authority todeal with the application filed under the Scheme as well as to hearthe revision. Knowing fully well that the application filed by thepetitioner is pending before him, he has chosen to take up therevision and dismissed the same through order, dated 01.02.1999. He cited the dismissal thereof as a ground for refusing to extend the In the instant case, the 1[st] respondent was the authority todeal with the application filed under the Scheme as well as to hearthe revision. Knowing fully well that the application filed by thepetitioner is pending before him, he has chosen to take up therevision and dismissed the same through order, dated 01.02.1999. He cited the dismissal thereof as a ground for refusing to extend the benefit under the Scheme. The approach of the 1[st] respondent istotally untenable, apart from being opposed to the letter and spirit ofthe Scheme. In a way, he has read certain aspects into the Scheme,which the parliament did not intend to. The mere fact that a revision,which was pending before him was dismissed, cannot constitute thebasis to deny the relief under the Scheme. We have taken similarview in W.P.No.16170 of 2000 and batch. We, therefore, allow the writ petition and set aside theimpugned order. There shall be no order as to costs. The miscellaneous petition filed in this writ petition shall alsostand disposed of. ____________________ L.NARASIMHA REDDY, J. _____________________ CHALLA KODANDA RAM, J. Date:09.07.2014GJ