APEEJAY INDUSTRIES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This writ petition is directed against order dated December 31, 1993, and order dated August 11, 1978, October 31, 1979, December 19, 1989, and the proceedings for charging interest under Section 220 of the Income-tax Act, 1961 and the order rejecting the applications for waiver and the Certificate Case No. 82 T. R.-24 of 1978-79 and 35 T. R-24 of 1979-80 for the assessment years 1973-74, 1974-75 and to direct the respondents and also to refund amount paid by the petitioner with interest.

(2.) The facts of the case are briefly stated hereunder : One Steel Rolling Mills of Hindusthan Private Limited and Apeejay Structural Private Limited were amalgamated into one company, namely, the writ petitioner herein. The subject-matter of the writ petition relates to the assessment years 1973-74 and 1974-75. Interest is sought to be realised under Section 220 of the Income-tax Act, 1901 (in short "the Act" hereinafter). So the writ petitioner herein filed an application for waiver of interest under Section 220, Sub-section (2A) of the Act. In the application it was stated that the predecessor-in-interest of the writ petitioner filed returns showing net loss of Rs. 18,40,580 on August 14, 1973. Thereafter, a revised return was filed on November 25, 1975, showing net loss of Rs. 1,62,949. The Income-tax Officer completed the assessment on a total income of Rs. 19,20,560 on March 2, 1977, by making huge intangible additions and disallowances. On appeal before the Income-tax Commissioner (Appeals) and before the Income-tax Appellate Tribunal the total income was reduced. The Income-tax Appellate Tribunal sent back the matter on certain points to the Commissioner of Income-tax (Appeals) on June 26, 1979, and the Commissioner of Income-tax (Appeals) in his turn sent back the matter to the income-tax Officer on April 14, 1986. Thus, the total income was reduced to Rs. 7,51,705 while giving effect to the appellate order under Section 251. The Assistant Commissioner of income-tax, without considering the merits of the case, imposed the demand payable of Rs. 2,93,943 and also charged interest under Section 215 of Rs. 2,04,142 and interest under Section 220, Sub-section (2A) of Rs. 6,84.158 thereby making total demand payable of Rs. 9,78,300, after adjustment of the payment of Rs. 2,03,943 on March 30, 1988, without any justified reasons.

(3.) Most of the additions could not be foreseen as aforesaid at the time of filing of the return or payment of advance tax and there was reasonable cause for non-payment of the tax. The petitioner has co-operated with the Department in all sorts of enquiry relating to the assessments or any proceedings for recovery of any dues from him and as such Clause (iii) of the section as aforesaid has been satisfied in the present case. The addition as made in the assessment proceedings by the appellate authority could not be foreseen at the time of filing of the return or even before completion of the assessment proceedings and as such the petitioner was under the bona fide belief that the petitioner had not to pay any tax in pursuance of the fact that the petitioner filed a loss return as well as the revised loss return. Therefore, the petitioner acted in good faith in making any payment of tax before and after the assessment.