CYANAMID INDIA LIMITED Vs. K N ANANTHARAMA AYYAR

JUDGEMENT

(1.) THE petitioner is a Company incorporated under the Indian Companies Act, 1913 and carries on the business of manufacture and sale of high technology products in agro-chemicals, drugs and pharmaceuticals and animal health. The petitioner is assessed to tax under the Income-tax Act, 1961 (hereinafter referred to as the Act) and the previous year of the petitioner relevant to the assessment year 1973-74 is the period of 12 months ended on November 1972. The Company paid advance tax of Rs. 2,41,33,582/ -. The Company filed return on July 23, 1963 and the returned income was Rs. 3,92,16,460/ -. The assessment under section 143 (3) of the Act was completed by order dated March 31, 1975 and the Company was assessed on in income of Rs. 4,06,93,891/ -. The tax payable was Rs. 2,35,00,720/ -. The Income-tax, Officer, after giving credit for the advance tax and tax deducted at source determined a refund due to the Company of Rs. 6,46,140/- and granted interest under section 214 on the said amount of refund. By order dated March 30,1976, the assessment order was rectified under section 154 of the Act as certain mistakes apparent from the record were noticed. As a result of the rectification, the income of the Company was enhanced by Rs. 5,918/- and the total income was Rs. 4,06,99,809/ -. The Income-tax Officer raised the demand for income-tax of Rs. 3,419/- and the said amount was paid by the Company on August 16, 1976.

(2.) THE Company preferred an appeal to the Appellate Assistant Commissioner, Income-tax against the original order of assessment under section 143 (3) of the Act. The Company also preferred appeal against the order of rectification passed by the Income-tax Officer. By order dated October 25, 1978, the Commissioner of Income-tax (A) partly allowed both the appeals and effect was given to the orders of Commissioner of Income-tax and of the Tribunal by order dated July 30, 1979. The total income of Company was computed at Rs. 4,02,54,680/- and the total refund of Rs. 2,54,533/- was found due. The said amount of refund comprised of sum of Rs. 1,588/- being the amount due as a result of the order of the Commissioner of Income-tax and the balance amount being the amount of refund due as a result of the order of the Tribunal. The Company received the refund on September 20, 1979.

(3.) FOR the assessment year 1974-75, the Company had paid advance tax of Rs. 2,71,30,402/ -. The return was filed on June 27, 1974 and the income returned was Rs. 4,64,20,130/ -. The assessment was completed under section 143 (3) of the Act by order dated September 29, 1975 and the Company was assessed of income of Rs. 4,70,76,060/ -. The Income-tax payable was Rs. 2,71,86,424/ -. After giving credit for the advance tax paid and the tax deducted at source the Officer raised the demand of Rs. 36,441/- on the Company. The Company was entitled to refund of the tax for the assessment year 1972-73 and, therefore, the entire demand was adjusted to the said amount of refund. By order dated October 27,1976, the Income-tax Officer in exercise of powers under section 154 of the Act rectified certain mistakes which were apparent on the face of record and revised the total income to Rs. 4,70,26,320/- and the Company was called upon to pay further tax of Rs. 7,717/ -. The demand was also adjusted against the refund due to the Company for the assessment year 1962-63. The Company preferred an appeal against the order of the original assessment to Commissioner of Income-tax (A) and the appeal was partly allowed by order dated July 5, 1979. The Income-tax Officer gave effect to the order determining the refund due to the Company of Rs. 2,82,132/ -. The amount of refund was adjusted in January 1980 against the sur-tax demand for assessment year 1976-77. The amount of Rs. 2,82,132/- included the refund of excess advance tax paid of Rs. 2,60,024/ -.