Calcutta High Court
Bank Of Tokyo Mitsubishi Ltd. vs Commissioner Of Income-Tax And Ors. on 10 August, 1999
Equivalent citations: [1999]240ITR331(CAL)
JUDGMENT Ajay Nath Ray, J.
1. The writ application is concerned with the Kar Vivad Samadhan Scheme, 1998, declaration made in time by the assessee for the assessment year 1993-94.
2. For the assessment year 1991-92, the assessee was assessed to a refund order. For the year 1992-93, whether there is any refund order or not there is at least no tax liability. For the assessment year 1993-94, there was assessed liability for the reason of which the assessee filed the declaration and sought for payment of the proportionate amount as per the Kar Vivad Samadhan Scheme for settlement of the disputes which were then pending before the Tribunal.
3. The impugned order of the designated authority dated the January 25, 1999, sought to dismiss and reject the declaration filed by the assessee-writ petitioner.
4. The reason appearing on the face of that impugned order of rejection is that there was no tax arrear to be compounded or settled as per the Kar Vivad Samadhan Scheme in regard to the assessment year 1993-94.
5. Correspondence ensued thereafter and the reason why the designated authority rejected the declaration of the writ petitioner is clarified in his letter dated March 30/31, 1999.
6. It is stated there that the dues of the assessment year 1993-94 were adjusted against the credit of the assessee by way of the refundable amount for the assessment year 1991-92 and, therefore, no tax arrear for the assessment year 1993-94 remained to be paid or settled. It is further stated in that letter that this position as to the adjustment as between the assessment years 1991-92 and 1993-94 was known to the assessee and the assessee's letters dated February 19, 1998 and March 19, 1998, were referred to in this regard.
7. From these letters dated February 19, 1998 and March 19, 1998, it appears that in both those documents the assessee was corresponding in regard to the assessment year 1994-95.
8. The assessee has also paid Rs. 6 crores or so in regard to the assessment year 1994-95 and the disputes in regard thereto are still pending.
9. The assessee was moving for stay under Sub-section (6) of Section 220 of the Act for that assessment year, i.e., 1994-95.
10. To make the case of the assessee appear strong and deserving the assessee mentioned in the context of the said assessment year 1994-95 that the assessee's position with regard to previous assessment years was not bad ; this was the meaning sought to be conveyed when the assessee wrote that "the net refund of earlier assessment years, viz., 1991-92 to 1993-94, which is Rs. 80,04,748, which may kindly be granted to us or may be adjusted against the demand, if any, for the assessment year under consideration".
11. According to the communication of the designated authority, this portion of the assessee's letter and the records available to the designated authority showed that the writ petitioner was aware of the adjustments made in regard to the assessment years 1991-92 to 1993-94 some time in December, 1997, leaving a balance of about Rs. 80,00,000 in favour of the assessee.
12. The short facts recited above will show that the designated authority, with respect, made a patent error. He confused the request of the assessee with an adjustment already made.
13. The adjustment of the refundable amount against tax dues can be made and must be made in accordance with Section 245 of the Income-tax Act. Under Section 245 a prior intimation in that regard must originate from the Revenue. Only thereafter the Revenue has jurisdiction to make the set-off.
14. In this case nothing originated from the Revenue. The sum of Rs. 80,00,000 and odd was mentioned in the assessee's letter as a result of arithmetical computations made on their own. The assessee no doubt made a request for such adjustment in regard to the assessment years 1991-92 to 1993-94, but the making of such a request by the assessee is an act not contemplated under Section 245. The set-off is to be made by the Revenue and the Revenue alone after following the law and observing the mandate of Section 245 and perhaps, after observing the rules of natural justice.
15. In this case the request of the assessee for adjustment was treated by the designated authority as a matter of completing the adjustment by itself and even as an acquiescence to such adjustment. When the intiation of the adjustment was not made by the Revenue at all, the assessee had nothing to acquiesce in.
16. In these circumstances, the writ application succeeds. It is declared that the declaration of the assessee was properly filed but improperly rejected. The impugned order of rejection by the designated authority is set aside and cancelled and is to be treated as replaced by an order accepting the declaration directing the assessee to pay to the designated authority a sum of Rs. 52,59,742 within a period of four weeks from date hereof. Upon such payment the due certificates shall be issued to the writ petitioner within eight weeks from date hereof. It is made clear that on the wiping off of the liability for the assessment year 1993-94, the revival of the credit for the . assessment years 1991-92, and 1992-93 would have to be prosecuted by the writ petitioner separately in other proceedings for obtaining those refunds with interest unless the Revenue automatically makes those payments. Thus prayer (a)(ii) is not granted and is declared to be the subject of future proceedings of parties in accordance with law. In addition to the above, there shall be rule absolute in terms of prayers (a)(i), (a)(iii), (b) and (c) of the writ petition.
17. The matter had to be disposed of without affidavits, as the writ petition is the only pleading before the court no other affidavits being filed as per taken directions.
18. All parties and all others concerned to act on a signed xerox copy of this dictated order on the usual undertakings.