COMMISSIONER OF INCOME TAX I LDH V. M/S PATIALA CARRIERS & ORS

CWP/867/2015

AI Insights

The case involves the Commissioner of Income Tax-II Ludhiana as the petitioner and M/s Patiala Carriers & another as the respondents. The petitioner challenged the order of the ITSC which calculated the total income of the respondents at 30,96,000 and directed the Assessing Authority to calculate the tax with interest accordingly. The ITSC's decision followed a lengthy hearing period from 12.09.2000 to 10.01.2014, and was influenced by a directive from the Punjab and Haryana High Court dated 03/02/1997, which called for a thorough investigation into the sources of penalty payments made by M/s Patiala Carriers. The High Court found that the ITSC had not provided adequate time for the petitioner to furnish necessary information, which was a procedural oversight.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 729276 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 13-05-2015
• Assessment Year: misc
• Other Referred Cases: C.W.P. No.19303 of 1996
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: RAJESH KATOCH
• Keywords: Income tax settlement commission; Total Income; Tax with interest; Penalty payment investigation
• Section: 245D(3)

Judgement Text

"CWP No.867 of 2015 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP No.867 of 2015 Date of decision:13.05.2015 Commissioner of Income Tax-II Ludhiana ....Petitioner Versus M/s Patiala Carriers & another ......Respondents CORAM: HON'BLE MR.JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICE HON'BLE MR.JUSTICE G.S.SANDHAWALIA Present: Mr.Rajesh Katoch, Advocate, for the petitioner. None for the respondents. **** S.J.Vazifdar, Acting Chief Justice (Oral): 1. Rule. Rule returnable and heard finally. 2. Vide order dated 19.01.2015, notice of motion was issued for 17.03.2015. Though the respondents were duly served, they were not present on 17.03.2015. They are not present today also. We, accordingly, proceed to decide the writ petition. 3. The petitioner has challenged the order of the Income Tax Settlement Commission, New Delhi (for short, the 'ITSC'), calculating the total income at `30,96,000/- and directing the Assessing Authority to calculate the tax with interest, accordingly. Certain other directions were also issued by the ITSC. 4. The hearing before the ITSC were held between 12.09.2000 to 10.01.2014. Thereafter, the ITSC addressed a letter dated 25.04.2014 (wrongly typed as 25.04.2013). However, the contents of the letter itself indicate the typographical error. The letter reads as under: “I am directed to refer to the subject mentioned above and to draw your attention to the Hon'ble Punjab and Haryana High Court's order dated 03/02/1997 in C.W.P. No.19303 of 1996 in which the SAILESH RANJAN 2015.05.15 10:12 I attest to the accuracy and integrity of this document CWP No.867 of 2015 -2- Hon'ble Court had given certain direction to the Income Tax Authorities which is reproduced below: “We direct the respondent No.2 to send complete information of the payments made by M/s Patiala Carriers (Regd.) to the concerned Income Tax Authorities and we hope that appropriate steps will be taken by the Income Tax Department for making a thorough investigation regarding the source from which M/s Patiala Carriers has made payment of amount of penalty.” 2. In view of the Hon'ble Punjab & Haryana High Court's order, you are directed to make an investigation regarding the source from which M/s Patiala Carriers has made payments of amount of penalty and also to ascertain the capacity/status of the parties who actually made payments of the penalties vide the copies of Sales Tax Department's penalty/detention orders as forwarded by the Assessing Officer to ITSC vide letter dated 10/14/2014. In this regard your report should reach this office by 15.5.2014 positively.” 5. The petitioner's grievance is that it was not granted adequate time to furnish the necessary information. The grievance is justified, for more than one reason. Firstly, it is pursuant to the orders of this Court that the information was directed to be sent to the Income Tax authorities. The Division Bench expressed the hope that appropriate steps would be taken by the Income Tax Department for conducting thorough enquiry regarding the source from which the assessee/respondents, had paid the penalty. The impugned order was passed on 28.05.2014 (Annexure P15). In the facts and circumstances of the case, the ITSC ought to have granted the petitioner adequate time to furnish the information. 6. Reliance upon Section 245D(3) of the Income Tax Act, 1961, is also well founded. The petitioner is entitled to at least 90 days to produce the information. Therefore, the observations of the ITSC, especially in paragraphs No.16 & 17 of the impugned order were not justified. 7. Accordingly, the impugned order dated 28.05.2014 (Annexure P15), passed by the ITSC, is quashed and set aside. The matter is remanded to the SAILESH RANJAN 2015.05.15 10:12 I attest to the accuracy and integrity of this document CWP No.867 of 2015 -3- ITSC, to pass a fresh order, after affording both the parties an opportunity of being heard. The information sought vide the said letter dated 25.04.2014, shall be furnished, latest by 13.08.2015. The writ petition is, accordingly, disposed of. (S.J.Vazifdar) Acting Chief Justice 13.05.2015 (G.S.Sandhawalia) sailesh Judge SAILESH RANJAN 2015.05.15 10:12 I attest to the accuracy and integrity of this document "