W.p.(C)/532/2015 Of Ashok Chaturvedi v. Commissioner Of Income Tax

Signed By:RAM DATTSigning Date:01.10.2024 16:36Certify that the digital and physical file havebeen compared and the digital data is as perthe physical file and no page is missing. ^ ORDER%18.03.2016 1. Despite three hearings no counter affidavit has been filed till date. With havingbeen issuedway back on 27® January2015, the Courtis not inclinedto grantfurthertimeto the Respondentfor thatpurpose. 2. The pointurgedin this writpetitionis short.By the impugnedorderdated-10 July 2014, the CommissionerofIncome Tax (Central) III ('CIT-Iir)has declined to condone the delay of around 40 months in the Petitionerfiling a revisionpetitionunder Section 264 of the Income Tax Act 1961('Act')againstorders ofassessmentdated passed under Sections 153A/143(3) of the Act for AYs 2005-06to 2008-09. 3. The Petitioneris the Chainnan cum ManagingDirector('MD') of M/sUflex Group of companies,the parent companyof which is Uflex Ltd. acompanyincorporatedunder the CompaniesAct, 1956. It is stated that hehas been the MD Uflex Ltd. since its incorporationin 1988.He wasreappointedas such for aperiodoffive years effectivefrom 1st April 2004.His remunerationwas fixed by a resolutionofthe companyat 9.48%ofthenet profitofsaid companyfor FinancialYear ('FY') 2004-05 onwards.Atthe no of the centralwas obtainedin terms of stage approval governmentSections 198, 309 and 310 of the CompaniesAct, 1956. The remunerationreceived in the sum of Rs.534.11 lakhs was reflected in the income taxreturnsfor the saidFY and it was assessedby an orderdated23'"''December,2009. 4. When the appointmentof the Petitioneras MD was renewedwith effectfrom 1st April 2009 it was realizedthat approvalofthe centralgovernmenthad to be obtained. The central government while directing that theremunerationpaidto the Petitionershouldnot exceed5% ofthe netprofitof the companydirectedthat "the companymay file a separateapplicationforwaiver of excess remuneration paid to him or recover the excess arnountfrom him" for FYs 2004-05 to 2008-09. 5. The Petitioner states that after failing through several attempts to get theMinistryof CorporateAffairs(MCA) to regularizethe excess remuneratioripaidto him by the company, he has sincerefundedRs.l 184.79lakhs to thecompanytowards the excess remunerationfor FYs 2004-05 to 2008-09 on25''^March 2014. 6. Thereafter the Petitioner filed a petition under Section 264 of the Actbefore the CIT-III seeking to revise the assessments made for AY 2005-06to AYs 2009-09 since the income earned was on accrual basis and with theexcess having been returned to the company, the Petitioner would be entitledto a refund. This application was delayed by over 40 months and thePetitioner sought to explain the delay in filing the revision petition withreference to the above facts. 7. In the impugned order the CIT-III has held that on the above facts it couldnot be said that the Assessee was prevented by sufficient cause from filingthe application under Section 264 within the time prescribed and therefore,the delay of 40 months could not be condoned. 8. Havingheard the learnedcounselfor the parties and having examinedtheimpugned order and other documents, the Court is of the view that theexplanationoffered by the Petitionerfor the delay is indeed satisfactory.Considerable time was consumed in the Petitioner attempting to get the MCA to regularise the excess payment and he ultimately refunded to thecompanytheexcessremunerationon25thMarch2014.INthecircumstances, the Court is of the view that the Petitioner's revision petitionsought to be considered on merits.9. In that view of the matter, the impugned orders dated 10th July 2014passed by the CIT-III are set aside and the revision applications for AYs2004-05 to 2008-09 are restored to the file of the CIT-III for being dealtjvithon merits.It is clarifiedthatthe Courthasnot expressedany opiniononthe merits of the said revision petitions. 10. The Petitionerwill now appearbeforethe CIT, Central-Illon 2"'' May,2016. MCA to regularise the excess payment and he ultimately refunded to thecompanytheexcessremunerationon25thMarch2014.INthecircumstances, the Court is of the view that the Petitioner's revision petitionsought to be considered on merits.9. In that view of the matter, the impugned orders dated 10th July 2014passed by the CIT-III are set aside and the revision applications for AYs2004-05 to 2008-09 are restored to the file of the CIT-III for being dealtjvithon merits.It is clarifiedthatthe Courthasnot expressedany opiniononthe merits of the said revision petitions. 10. The Petitionerwill now appearbeforethe CIT, Central-Illon 2"'' May,2016. 11. The petitionsaredisposedof in the aboveterms. A certifiedcopyof thisorder be despatched forthwith to the CIT-III. S.MURALIDHAR,J MARCH 18, 2016MK VIBHU BAKHRU, J