HYDERABAD INDUSTRIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner is an assessee assessed by the Assistant Commissioner of Income-tax, Central Circle-II, Hyderabad, under the provisions of the Income-tax Act, 1961 ("the Act" for short). In respect of the various years, excess tax paid by the petitioner was refunded. THE petitioner claimed interest under section 214 and 244(1A) of the Act. Regarding the claim under section 244(1A), the assessing authority allowed interest to some extent; as to the interest under section 214, the assessing authority followed the decision of the Andhra Pradesh High Court. THE excess tax claimed to have been paid by the petitioner includes the advance tax paid. This fact is necessary to appreciate the contention raised under section 244(1A). THE petitioner filed revision petitions before the Commissioner under section 264 of the Act without any success. Hence these writ petitions.

(2.) LEARNED counsel for the Revenue raised a preliminary objection about the maintainability of these writ petitions. LEARNED counsel pointed out that the assessee is at Hyderabad and the assessment orders were made at Hyderabad and therefore the cause of action arises only at Hyderabad, and this court has not jurisdiction to entertain these writ petitions. LEARNED counsel also pointed out that revision petitions were lodged at Hyderabad and the revision petitions were heard by the commissioner at Hyderabad. There is some dispute as to whether the revision petitions were filed at Hyderabad or at Bangalore because the petitioner assets that the revision petitions were filed at Bangalore since the office of the Commissioner is located at Bangalore. This dispute is irrelevant for the purposes of these writ petitions.

(3.) UNDER the provisions of the Act an order of the assessing authority is not final. It is subject to revision or appeal and this court has held that the order of the original authorities, whether it is affirmed or modified or reversed, gets merged in the order made by the appellate or revisional authority, vide CIT v. Hindustan Aeronautics Ltd. [FB]. In the instant case, the petitioner is aggrieved by the order refusing its claim for interest. The interest to some extent was denied by the assessing authority. That order was affirmed by the Commissioner at Bangalore. If so, there can be no doubt that the effective order is the order of the Commissioner and the cause of action to challenge the said order, at least partly arose at Bangalore. In fact the Commissioner is located at Bangalore and even on that ground alone this court may have jurisdiction to entertain a writ petition against his orders. In an identical situation another assessee had filed Writ Petition No. 8234 of 1988 (Sirpur Paper Mills Ltd. v. ITO, dated November 16, 1990). The petitioner therein was aggrieved by the denial of the interest claimed under section 214 of the Act. The Commissioner had affirmed the order of the assessing authority. A preliminary objection was raised in that writ petition also. The preliminary objection was overruled stating that the Commissioner was within the territorial jurisdiction of this court and part of the cause of action arose at Bangalore. Thereafter, a writ was issued to grant the interest in the light of the decision rendered by this court in CIT v. Deepchand Kishanlal [1990] 183 ITR 299. The Revenue challenged the said order in W. A. Nos. 2546 of 1990 and 713 of 1991. The writ appeals were dismissed. The Bench pointed out that the Commissioner of Income-tax exercises his revisional jurisdiction in Bangalore and, therefore, part of the cause of action arose within the jurisdiction of this court. The Bench further affirmed the decision on the merits regarding the payment of interest by applying the earlier ruling in Deepchand Kishanlal's case . I do not find any substantial difference between the aforesaid case and the present case before me.