SURESH B JAIN Vs. NAIR P K P

JUDGEMENT

(1.) THE petitioner had filed his return for the asst. year 1982 83 and the IAC passed an assessment order assessing him on income to the extent of Rs. 60,60,234 on which the petitioner paid an amount of Rs. 4,29,000 by way of income tax. He then preferred an appeal against the assessment order before the CIT(A). The said appeal was allowed and, therefore, the ITO revised the assessable income of the petitioner for the asst. year 1982 83 and the revised assessment order was passed computing the total income of the assessee at Rs. 21,948 on which the income tax liability was only Rs. 2,294. Accordingly, the petitioner was entitled to a refund of Rs. 4,26,706. It appears that, while forwarding the revised assessment order for the asst. year 1982 83, the ITO also simultaneously issued a notice for finalisation of the proceedings for the assessment for the year 1983 84. In the meanwhile, the petitioner, by a letter dt. 31st May, 1985, addressed to the CIT, requested that refund of Rs. 4,26,706 be granted to him forthwith and the pendency of the assessment for the year 1983 84 should not delay handing over to him of the said amount. However, the refund was not given to him and, therefore, he filed Writ Petition No. 1318 of 1985 (Suresh B. Jain vs. A. N. Shaikh (1986) 56 CTR (Bom) 47 : (1987) 165 ITR 151(Bom)) on 8th July, 1985, invoking the writ jurisdiction of this Court under Art. 226 of the Constitution. The said writ petition was heard by Pendse J. who, by his judgment and order dt. 7th March, 1986, allowed it and directed the respondents to refund the amount of Rs. 4,26,090 to the petitioner within two weeks. Feeling aggrieved by the judgment of Pendse J., the respondents preferred an appeal bearing No. 252 of 1986 (A. N. Shaikh vs. Suresh B. Jain (supra)), which was heard by a Division Bench (S. K. Desai and N. K. Parekh JJ.) who, by a judgment and order dt. 27th March, 1986, summarily dismissed the same. Ultimately, the respondents refunded to the petitioner the said excess income tax amount of Rs. 4,26,090.

(2.) IT also appears that action was taken against the petitioner under S. 132 of the IT Act, 1961 (hereinafter referred to as "the said Act"), on 13th Sept., 1982, and all his business as well as residential premises were raided as a result of which thirty drafts which were deposited by the petitioner with the Syndicate Bank, New Marine Lines Branch, Bombay, amounting to Rs. 1,24,558 were seized and also a prohibitory order under S. 132(3) of the said Act in respect of the bank account of the petitioner with the Syndicate Bank was passed whereby a balance of Rs. 22,507 remaining therein at that time was also injuncted from being withdrawn by the petitioner. The petitioner, thereafter, deposited drafts amounting to Rs. 4,06,568.52 in the said Syndicate Bank whereby the balance of the said bank account was increased to Rs. 4,29,075.09. Subsequently, an order under S. 132(5) of the said Act was passed against the petitioner whereby the concerned ITO estimated the total income of the petitioner for the asst. year 1983 84 under S. 132 at Rs. 6,26,133. The said Officer also imposed a penalty under S. 271 (1 ) of the said Act to the extent of Rs.

(3.) ,26,706 to the extent of Rs. 1,95,295 which had accrued in his favour under S. 244(lA) of the said Act. However, instead of paying to him the said amount of Rs. 1,95,295 being interest on the refund of Rs. 4,26,706, the 16th ITO, C IV Ward, Bombay, wrote a letter on 21st July, 1986 (exhibit 'K' to the petition), to the effect that it was seen from the records that an amount of Rs. 7,47,755 was outstanding against him for the asst. year 1983 84 and, therefore, it was proposed to adjust it against the interest due to him for the asst. year 1982 83 against this demand. It was further clarified that the said letter be treated as an intimation under S. 245. 4. Feeling aggrieved, the petitioner again invoked the writ jurisdiction of this Court under Art. 226 of the Constitution by filing this writ petition and prayed that the respondents be directed to forthwith refund and pay to him a sum of Rs. 1,95,295 on account of interest and they be refrained from adjusting and setting off the said amount against his outstanding tax liability for the asst. yr. 1983 84. A further prayer was made that a writ in the nature of mandamus be issued against the respondents ordering and directing them to forthwith deposit with the petitioner's bankers, viz. Syndicate Bank, New Marine Lines, Bombay, thirty drafts duly revalidated or alternatively to pay to the petitioner a sum of Rs. 1,24,558 being the value of the said drafts.