RAJAMONI AMMA Vs. DY COMMISSIONER

JUDGEMENT

(1.) TO recover the tax dues of the company, Rajmohan Cashews ltd. , Quilon for the years of assessment 1977-78 to 1982-83, the first respondent initiated proceedings under S. 179 of The Income-tax Act. The notice issued in this regard was responded to by the petitioner by Ext. P 12 statement. Relevant portions of the statement containing the objections are extracted hereunder "the company had incurred heavy losses in its cashew business from the accounting year ended 30-6-1982 relevant to assessment years 1983-84 due to the large fluctuations in International Cashew Market. It may be noted that bulk of cashew kernels are marketed abroad in countries like U. S. A. , Australia and U. S. S. R. The unexpected and unprecedented financial crisis of the company had arisen consequent to the unexpected fluctuation in export sale of cashew kernels and also due to the restrictions imposed by the State Government in procurement of raw cashew-nuts by directing that only the Co-operative Marketing Federation shall procure raw cashew nuts in the State under the Monopoly Procurement scheme and fixing high purchase price. The fixation of high minimum wages and bonus to the large number of factory workers by the Government added to the plight of the company. I am also bring to your kind notice that the company had been remitting monthly installment of Rs. 1 lakh each towards Income tax from may 1985 and Rs. 50, 000/- each towards surtax from January 1986 till October 1986. Eowever since the commissioner of Income tax, Central Circle, Bangalore directed that the entire balance of tax be remitted in lump sum and refused to issue further chalans for remittance of the monthly installments, the company was not able to make subsequent remittances. The default in remittance of tax dues has arisen only from November, 1986 and due to the continuing stringent financial Conditions the company was not able to make any further tax remittance the Indian Overseas Bank, Quilon, was giving the company financial assistance against fully secured goods during the above years and the goods were sold out at the then existing price. On 31-12-1986 there was a balance of Rs. 1,19,86,028. 67 due to the bank, because of the fluctuation in international Cashew Market. Consequently the bankers refused financial facilities resulting in unexpected and unprecedented financial crisis of the company. Under the circumstances the remittance of tax dues for prior years has arisen and such circumstances were beyond the control of the company and directors. . . The Company is still negotiating with its bankers to grant additional financial facilities to start its business activities again. It is expected by the end of March. Once the Company commence its business activities it will be in a position to remit the tax arrears on installment basis. . . i request you to kindly consider the facts stated above and take a very lenient view of the matter and drop your proposal to proceed against me u/s. 179 of the act for the tax arrears of the company. The first respondent considered the objections and passed ext. P13 order entering the finding that the petitioner being a director is jointly and severally liable for the tax arrears of the company. Aggrieved by ext. P13 order, the petitioner filed Ext. P14 revision fore the second respondent. In the revision the petitioner reiterated the contentions she had raised before the first respondent. The second respondent after considering the various aspects of the case passed Ext. P15 order confirming Ext. P13 order of the first respondent.

(2.) SEEKING rectification of Ext. P15 order, the petitioner filed Ext. P16 under S. 154 of the Income-tax Act. This application stands rejected by Ext. P18. Exts. P13, P15 and P18 are under challenge.

(3.) THE questions thus arising for consideration are: (1)whether the error sought to be corrected is an error apparent from the record and (2) are the grounds urged in the O. P. sufficient to interfere with Ext. P13 and Ext. P15 orders.