MEPCO INDUSTRIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE writ appeals are filed by against the order of the learned single Judge dated 8. 12. 2000 made in W. P. Nos. 10663 and 10664 of 1998.

(2.) THE appellant herein preferred revision petitions under Section 264 of the I. T. Act before the Commissioner of Income Tax claiming relief that the electricity subsidy received by the appellant from the Government of India in a sum of Rs. 56,16,456 and Rs. 64,56,107/- for the assessment years 1993-94 and 1994-95 respectively may be treated as capital receipt. The Commissioner of Income Tax, the first respondent herein granted the relief as sought for by the appellant herein in his order dated 30. 4. 1997. However subsequent to that a rectification proceedings was sought to be taken by the Commissioner of Income Tax as there was a mistake apparent from the record. In the rectification proceedings, the Commissioner of Income Tax by placing reliance on the decision of the Supreme Court in SAHNEY STEEL AND PRESS WORKS LTD AND OTHERS VS. COMMISSIONER OF INCOME TAX (228 ITR 253) held that the power tariff subsidy was given to the assessee company after it had commenced its production and hence the subsidy received by the appellant were to be treated as revenue receipt. The order of the Commissioner of Income Tax was challenged before this Court by way of writ petition on the ground that as there was no mistake apparent from the record, the order of the Commissioner of Income Tax passed under Section 264 cannot be rectified based on the subsequent decision of the Supreme court. By order dated 8. 12. 2000, the learned single Judge rejected the plea of the assessee on the ground that the rectification proceedings were initiated on the strength of the subsequent pronouncement of the Supreme Court SAHNEY STEEL AND PRESS WORKS LTD AND OTHERS VS. COMMISSIONER OF INCOME TAX (228 ITR 253) declaring the law on the points that had been dealt with by the Commissioner in his earlier order and consequently the learned single Judge held that the order of the Commissioner could not be said to be suffering from any illegality. The said order is now put in issue before this Court in the present writ appeals.

(3.) A perusal of the order of the learned single Judge shows that the order of the Commissioner of Income Tax, the first respondent herein was upheld by this Court on the ground that when the law declared by the Apex Court in the above said decision on the points that had been dealt with the Commissioner has been followed by the Commissioner, there is no need to interfere with the order of the Commissioner under Article 226. We are in complete agreement with the view expressed by the learned single Judge. Learned counsel for the assessee however, submitted that the facts of the case dealt with by the Apex Court stand on a different footing which is based on the power subsidy scheme implemented by Andhra Pradesh Government. Hence, he prayed for reversing the order of the learned single Judge. We do not agree.