SATISH CHAND SINGHAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE first petitioner, Satish Chand Singhal, is the managing director of the second petitioner, Cawnpore Chemical Works Pvt. Ltd. THE petitioners have sought a writ of mandamus against the second respondents, the Assistant Commissioner of Income-tax (Central), Circle-25, New Delhi, with a direction to grant refunds to the second petitioner, which were due to it consequent to certain orders passed in its case for certain assessment years and for which a writ petition was also filed earlier in this court. THE other complaint is that the respondents were not legally justified in adjusting the refunds due to the second petitioner against the individual demands of the first petitioner, which fell due against him because of the protective assessment orders for the assessment years 1984-85 and 1985-86 and, thus, the refunds are wrongly being withheld.

(2.) HAVING heard learned counsel for the parties, in our opinion, the writ petition is liable to be rejected summarily.

(3.) THE stand taken by the petitioners is seriously controverted by the respondents in the counter-affidavit filed on their behalf. According to the respondents, the disputed assessments are substantive and, in any case, they do not lose their character of regular assessments merely because the expression "protective" was used in the assessment orders in a different context, namely, to convey that the assessments were without prejudice to the right of the Revenue to proceed against any other person. In the counter-affidavit, the respondents have also categorically stated that the income assessed in the hands of the first petitioner has not been brought to tax in the hands of any other person. THE question whether the assessments against the first petitioner are protective or substantive, in our opinion, need not be gone into in these proceedings, inasmuch as the appeals against those assessment orders are already pending decision before the appellate authority at the instance of the first petitioner. We have no doubt that if such a plea is raised before the appellate authority, the same shall be dealt with in accordance with law. Coming to the question whether the adjustment of tax dues against the first petitioner could or could not be made against the refunds due to the second petitioner, it need not detain us long. Learned standing counsel invited our attention to the two letters which were addressed to the Commissioner of Income-tax (Central), New Delhi, one by the first petitioner and the other by the second petitioner, true copies of which have been attached with the counter-affidavit. THE first petitioner, in his letter, lodged a protest that, on the one hand, substantial refund to the tune of Rs. 9.50 lakhs plus interest was being withheld which was due to the second petitioner of which he was the (first petitioner) managing director and unsecured creditor of an amount of Rs. 20 lakhs, while on the other hand, the demand against him was being pressed for realisation. In the letter written by the second petitioner, it gave its consent for adjustment of the refunds due to the company for meeting the demands due against the first petitioner. THE letter written by the second petitioner was to the following effect :