M/S. RELIANCE POLYPROPY LENE LTD., Mumbai V. THE JCIT SP RG. 18, Mumbai

ITA 1855/MUM/2004

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7315 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-10-2011
• Assessment Year: 1993-1994
• Appeal Filed On: 19-03-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: A V SONDE
• Keywords: Application of stay; Competent authority
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI G.E. VEERBHADRAPPA, PRESIDENT AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1853/MUM/2004 (ASSESSMENT YEAR: 1992-93) ITA NO.2128/MUM/2004 (ASSESSMENT YEAR: 1996-97) RELIANCE INDUSTRIES LIMITED, MAKER CHAMBER IV, 3RD FLOOR, 222, NARIMAN POINT, MUMBAI -400 021 ....... APPELLANT VS JT. COMMISSIONER OF INCOME-TAX, SPECIAL RANGE 18, AAYAKAR BHAVAN, ROOM NO.617, M.K. ROAD, MUMBAI -400 020 ..... RESPONDENT PAN: AACR 5055 K ITA NO.1855/MUM/2004 (ASSESSMENT YEAR: 1993-94) ITA NO.2124/MUM/2004 (ASSESSMENT YEAR: 1994-95) ITA NO.2125/MUM/2004 (ASSESSMENT YEAR: 1995-96) RELIANCE POLYETHYLENE LIMITED, (NOW MERGED WITH RELIANCE INDUSTRIES LTD.) MAKER CHAMBER IV, 3RD FLOOR, 222, NARIMAN POINT, MUMBAI -400 021 ....... APPELLANT VS JT. COMMISSIONER OF INCOME-TAX, SPECIAL RANGE 18, AAYAKAR BHAVAN, ROOM NO.617, M.K. ROAD, MUMBAI -400 020 ..... RESPONDENT PAN: AAACR 3908 B RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 2 ITA NO.1854/MUM/2004 (ASSESSMENT YEAR: 1993-94) ITA NO.2126/MUM/2004 (ASSESSMENT YEAR: 1994-95) ITA NO.2127/MUM/2004 (ASSESSMENT YEAR: 1995-96) RELIANCE POLYPROPYLENE LIMITED, (NOW MERGED WITH RELIANCE INDUSTRIES LTD.) MAKER CHAMBER IV, 3RD FLOOR, 222, NARIMAN POINT, MUMBAI -400 021 ....... APPELLANT VS JT. COMMISSIONER OF INCOME-TAX, SPECIAL RANGE 18, AAYAKAR BHAVAN, ROOM NO.617, M.K. ROAD, MUMBAI -400 020 ..... RESPONDENT PAN: AAACR 3907 Q APPELLANT BY: SHRI A.V. SONDE RESPONDENT BY: SHRI V.V. SHASTRI DATE OF HEARING: 21.11.2011 DATE OF PRONOUNCEMENT: 21.11.2011 O R D E R PER BENCH THIS BATCH OF EIGHT APPEALS ARE FILED BY THE THREE DIFFERENT ASSESSES, CHALLENGING THE RESPECTIVE IMPUGNED ORDER S OF THE LD. CIT (A)-III MUMBAI. THESE APPEALS ARE ARISING OUT OF T HE RESPECTIVE ORDERS PASSED BY THE A.O. U/S.154 OF THE I.T. ACT. SO FAR AS ASSESSEE- RELIANCE INDUSTRIES LTD. (IN SHORT RIL) IS CONCERNE D, IT HAS FILED TWO APPEALS FOR THE A.Y. 1992-93 AND 1996-97. THE ASSE SSEE-RELIANCE POLYETHYLENE LIMITED (IN SHORT RPEL) IS CONCERNED, THERE ARE THREE APPEALS FOR THE A.YS. 1993-94, 1994-95 & 1995-96. SO FAR AS THIRD ASSESSEE-RELIANCE POLYPROPYLENE LIMITED (IN SHORT R PPL) IS CONCERNED, AGAIN THERE ARE THREE APPEALS FOR THE A.YS.1993-94, 1994-95 & 1995- 96. THE ISSUES ARISING IN THESE APPEALS ARE IDENTI CAL AND ALSO INTER- RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 3 LINKED HAVING BEARING ON THE DECISION OF EACH OTHER , HENCE, THIS BATCH OF EIGHT APPEALS ARE DISPOSED OF BY THIS CONSOLIDAT ED ORDER FOR THE SAKE OF CONVENIENCE. 2. WE FIRST TAKE-UP TWO APPEALS FILED BY THE RIL FO R THE A.YS. 1991- 92 & 1996-97. THE ASSESSEE-RIL HAS TAKEN FOLLOWING GROUNDS, WHICH ARE COMMON AS WELL AS IDENTICAL IN ALL THE EIGHT AP PEALS OF THESE THREE ASSESSEES:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-III, MUMBAI (HEREINAFTER REFERRED TO AS CIT (A)) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER (HER EINAFTER REFERRED TO AS AO) IN REJECTING THE APPLICATIONS FILED U/S.154OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS ACT) BY THE APPELLANT. 2. THE CIT (A) ERRED IN CONFIRMING THE AOS ACTION OF IGNORING THE STATUTORY REQUIREMENT OF SECTION 245 OF THE ACT FOR GIVING INTIMATION IN WRITING TO THE APPELLANT AFTER THE REFUND BECAME DUE AND BEFORE SETTING OFF WITH THE OUTSTAND ING DEMAND, IF ANY, OF THE APPELLANT. 3. THE CIT (A) ERRED IN NOT FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF A.N. SHEIK H & OTHERS VS. SURESH B. JAIN (165 ITR 86), WHICH LAID DOWN THAT THE SETTING OFF THE REFUND DUE WITHOUT PRIOR I NTIMATION IN WRITING IS NOT AS PER THE PROVISION OF SECTION 2 45 OF THE ACT. 3. THE FACT PERTAINING TO THE CONTROVERSY, WHICH AR E REVEALED FROM THE RECORD AS UNDER. SO FAR AS RIL IS CONCERNED, I T HAD FILED THE APPLICATION U/S.154 OF THE I.T. ACT TO THE A.O., WH ICH WAS DISPOSED OFF RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 4 VIDE ORDER DATED 30.03.1999. IN THE APPLICATION U/ S.154 THE ASSESSEE CONTENDED THAT WHEN THE REFUNDS ARISING FROM THE AS SESSMENT ORDERS/INTIMATIONS WERE ADJUSTED AGAINST THE DEMAND S OF THE ASSESSEE AND OTHER TWO ASSESSEES, NO PROPER INTIMATION WAS GIVEN IN WRITING BY THE A.O. WHICH IS ONE OF THE IMPORTANT STATUTORY RE QUIREMENTS U/S.245 OF THE I.T. ACT. TO SUPPORT THE PLEA OF THE ASSESS EE, THE ASSESSEE RELIED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF A.N. SHEIKH & OTHERS VS. SURESH B. JAIN 165 ITR 86 AS WE LL AS THE DECISION OF THE HONBLE KOLCUTTA HIGH COURT IN THE CASE OF C IT VS. J.K. INDUSTRIES 245 ITR 457. THE ASSESSEE FURTHER STATE D THAT IN THE SAID APPLICATION THAT SETTING-OFF OF THE REFUND AGAINST THE OUTSTANDING DEMAND IS IN VIOLATION OF THE PROVISIONS OF SEC.245 OF THE I.T. ACT IS A MISTAKE APPARENT FROM THE RECORD AND HENCE, THE ORD ERS SETTING OFF THE REFUND MAY BE RECTIFIED. THE DETAILS OF REFUND ADJ USTMENTS CARRIED OUT IN THE CASE OF RIL ARE AS UNDER :- ORDER U/S.154 PASSED ON 30.06.97 FOR A.Y. 1996-97 AMT. IN ` `` ` NAME OF THE COMPANY ASST. YEAR AMOUNT RIL 1992-93 29,69,47,324 RPPL 1993-94 8,00,00.000 RPPL 1994-95 7,80,39,013 RPEL 1993-94 7,96,58,715 RPEL 1994-95 7,80,39,013 ORDER U/S.154 PASSED ON 30.06.97 FOR A.Y. 1992-93 AMT. IN ` `` ` NAME OF THE COMPANY ASST. YEAR AMOUNT RIL 1995-96 24,90,17,327 RPPL 1994-95 26,65,00,941 RPPL 1995-96 19,42,19,670 RPEL 1993-94 23,00,00,000 RPEL 1994-95 18,18,42,876 TOTAL 112,15,80,814 4. THE A.O. REJECTED THE ASSESSEES APPLICATION FIL ED U/S.154 BY GIVING THE FOLLOWING REASONS, WHICH ARE SUMMARISED BY THE LD. CIT (A) IN HIS ORDER AS UNDER:- RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 5 I) THAT THE REFUND WAS ADJUSTED AGAINST THE DEMAND AS EXPRESSLY REQUESTED BY THE APPELLANT. II) ADJUSTMENT OF REFUND AGAINST DEMAND HAS BEEN ORALL Y CONSENTED BY THE AR APPEARING ON BEHALF OF THE APPE LLANT AFTER DETAILED DISCUSSION ON SEVERAL OCCASIONS DURI NG MARCH, 96 TO MARCH, 98 AND THE APPELLANT NEVER CHALLENGED OR OBJECTED TO SUCH ADJUSTMENT. THE APPELLANT HAS ACKN OWLEDGED THE FACTS OF ADJUSTMENT OF REFUND BEFORE CIT-VI, MU MBAI IN ITS APPLICATION FOR STAY OF BALANCE DEMAND. III) THE AR IN THE COURSE OF HEARING BEFORE CIT IN THE STAY PROCEEDING HAS CLEARLY ACKNOWLEDGED THE ADJUSTMENT OF REFUND AGAINST THE OUTSTANDING DEMAND AND VARIOUS N OTING IN THE PROCEEDING BEFORE CIT ARE REPRODUCED ON PAGE 4 & 5 OF THE ORDER. THE APPELLANT HAS FURTHER ACKNOWLEDGED THE F ACTS OF ADJUSTMENT OF REFUND AGAINST THE OUTSTANDING DEMAND IN FURTHER APPLICATION OF STAY OF CCIT-III, MUMBAI. IV) ON SEVERAL OCCASION THE FACT OF ADJUSTMENT OF REFUN D AGAINST OUTSTANDING DEMAND HAS BEEN DISCUSSED BY THE JCIT, CIT AND CCIT AND THE ASSESSEE HAS DULY CONSENTED OF SUCH ADJUSTMENT. THE CONSENT OF THE APPELLANT IN ADJUSTM ENT OF SUCH DEMAND WITHOUT ANY INTIMATION IN WRITING HAS T O BE CONSTRUED AS DUE COMPLIANCE OF THE CONDITION U/S. 2 45 OF THE ACT. THE AO HAS RELIED UPON SC JUDGMENT IN THE CASE OF DHIRENDRA NATH VS. SUDHIR CHANDRA GHOSH [AIR 1964 S C 1300]. V) THE CONDITION OF PRIOR INTIMATION STIPULATED U/S. 2 45 IS PROCEDURAL IN NATURE AND ANY IRREGULARITY OR DEVIAT ION IN COMPLIANCE OF SUCH PROCEDURE CANNOT RENDER AN ACT O R WHOLE OPERATION OF THE PROVISIONS NULL AND VOID. RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 6 VI) THE BOMBAY HIGH COURT JUDGMENT IN THE CASE OF A. N. SHAIKH VS. SURESH B. JAM [165 ITR 86] IS DISTINGUISHABLE O N FACTS. VII) ALTERNATIVELY, THERE IS NO MISTAKE APPARENT FROM RE CORD WHICH COULD BE RECTIFIED BY INVOKING PROVISION OF SECTION 145 OF THE ACT. 5. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CI T (A) BUT WITHOUT SUCCESS. NOW, THE ASSESSEE-RIL IS IN APPEAL BEFORE US FOR BOTH THE ASSESSMENT YEARS I.E. 1992-93 AND 1996-97. 6. SO FAR AS THE SECOND ASSESSEE-COMPANY I.E. RELIA NCE POLYETHYLENE LIMITED (IN SHORT RPEL) IS CONCERNED, THE ASSESSEE FILED THE APPLICATION U/S.154 OF THE I.T. ACT TO THE A.O. AND FOR THE A.YS. 1993-94, 1994-95 AND 1995-96 STATING THAT THE REFUN D ADJUSTMENTS MADE AGAINST THE DEMAND OF THE ASSESSEE-APPELLANT W AS IN CONTRAVENTION OF THE PROVISIONS OF SEC.245 AND HENC E, THE ORDER PASSED FOR ADJUSTING THE OUTSTANDING DEMANDS OF THE ASSESS EE NEEDS A RECTIFICATION. THE FACTS ARE IDENTICAL IN THIS CAS E AS IN THE CASE OF RIL. THE DETAILS OF THE REFUNDS WHICH ARE ADJUSTED AGAIN ST THE DEMANDS RAISED UNDER SEC. 156 AGAINST THE ASSESSEE-APPELLAN T FOR THE VARIOUS ASSESSMENT YEARS ARE AS UNDER:- A.Y. ORDER BY WHICH REFUND IS SET OFF AMOUNT NAME OF THE CO ORDER U/S. A.Y. DT. OF ORDER (RS.) 1993-94 RPEL 143(1)(A) 1995-96 09.03.96 93,23,056 1993-94 RIL 143(1)(A) 1996-97 17.12.96 7,96,58,715 1993-94 RPEL 250 1991-92 6,27,480 1994-95 RIL 250 1992-93 12.03.98 23,00,00,000 1994-95 RIL 154 1996-97 03.06.97 7,80,39,013 1995-96 RIL 250 1992-93 12.03.98 18,18,42,876 TOTAL ` 57,94,91,140 7. THE A.O. REJECTED THE APPLICATION OF THE ASSESSE E BY GIVING REASONS WHICH ARE SUMMARISED BY THE LD. CIT (A). T HE REASONS ARE RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 7 IDENTICAL AS IN THE CASE OF RIL WHILE REJECTING ITS APPLICATION AND THE REASONS SUMMARISED BY THE LD. CIT (A) ARE ALREADY R EPRODUCED HEREINABOVE, HENCE TO AVOID THE REPETITION AND TO M AINTAIN BREVITY WE ARE NOT REPRODUCING THE SAME. 8. SO FAR AS THIRD APPELLANT-ASSESSEE IS CONCERNED I.E. RELIANCE POLYPROPYLENE LIMITED (IN SHORT RPPL), THE SAID ASS ESSEE FILED THE APPLICATION U/S.154 OF THE ACT TO THE A.O. FOR THE A.YS. 1993-94, 1994- 95 AND 1995-96 STATING THAT THE REFUND ADJUSTMENTS ARE MADE AGAINST THE OUTSTANDING DEMANDS OF THE ASSESSEE-APP ELLANT IN CONTRAVENTION OF SEC.245 OF THE I.T. ACT, AS NO PRI OR WRITTEN INTIMATION WAS GIVEN AND HENCE, THE REFUND ADJUSTMENT ORDERS (RAO) NEED RECTIFICATION. IN SHORT, ASSESSE PLEADED THAT ALL R EFUND ADJUSTMENTS SHOULD BE REVERSED. THE DETAILS OF THE REFUNDS ADJ USTED AGAINST THE DEMANDS UNDER SEC. 156 RAISED AGAINST THE ASSESSEE- APPELLANT FOR THE VARIOUS ASSESSMENT YEARS ARE AS UNDER:- A.Y. ORDER BY WHICH REFUND IS SET OFF AMOUNT NAME OF THE CO ORDER U/S. A.Y. DT. OF ORDER ( ` `` ` ) 1993-94 RPPL 143(1)(A) 1995-96 09.03.96 52,24,879 1993-94 RIL 143(1)(A) 1996-97 17.12.96 8,00,000 1994-95 RIL 250 1992-93 12.03.98 26,65,00,941 1994-95 RIL 154 1996-97 03.06.97 26,65,00,941 1995-96 RIL 250 1992-93 12.03.98 7,80,39,013 19,42,19,670 TOTAL ` 62,39,84,503 9. THE A.O. REJECTED THE PLEA OF THE ASSESSEE THAT THE REFUND ADJUSTMENTS MADE AGAINST THE VARIOUS DEMANDS OF THE ASSESSEE ARE IN CONTRAVENTION OF SEC.245. THE A.O. ALSO DISTINGUIS HED THE CASE RELIED ON BY THE ASSESSEE IN A.N. SHEIKH VS. SURESH B. JAI N (SUPRA). AS NOTED BY THE A.O,. ALL THE REFUNDS ADJUSTMENTS WERE MAD E AGAINST THE OUTSTANDING DEMANDS OF THESE ASSESSES, INTER PER SE , AS PER THE REQUEST MADE BY THE ASSESSEE ONLY. THE A.O. DISMIS SED THE APPLICATION FILED BY THE ASSESSEE BY CONSOLIDATED O RDER U/S.154 OF THE RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 8 I.T. ACT DATED 30.3.1994. THE ASSESSEE CHALLENGED THE ORDER OF THE A.O. BEFORE THE LD. CIT (A) BUT WITHOUT SUCCESS. A LL THESE ASSESSES HAVE FILED THE APPEALS CHALLENGING RESPECTIVE IMPUG NED ORDERS OF THE LD. CIT (A) BEFORE US. 10. SOME OF THE FACTS, WHICH ARE RELEVANT TO THE CO NTROVERSIAL ISSUES ARE REQUIRED TO BE BROUGHT ON RECORD. THE ASSESSEE RIPL AND RPPL WERE MERGED WITH THE RIL W.E.F. 1.1.1995 AS PER TH E ORDER PASSED BY THE HONBLE HIGH COURT OF BOMBAY IN WRIT PETITIONS NOS.4952 TO 4957 OF 1994. THE GOVT. OF INDIA DECLARED KAR VIVAD SAM ADHAN SCHEME (IN SHORT KVSS) IN THE FINANCE (NO.2) ACT, 1998. AS PE R THE SAID SCHEME THE GOVT. OFFERED CERTAIN CONCESSIONS TO THE ASSESS EES ON COMPLIANCE OF CERTAIN CONDITIONS. THE ASSESSEE RIL FILED THE APPLICATIONS TO THE COMMISSIONER OF INCOME TAX (CIT) TO GET RELIEF UNDE R KVSS BUT BOTH THE APPLICATIONS WERE REJECTED ON 25.02.1999 BY THE CIT, WHO WAS THE COMPETENT AUTHORITY. THE ASSESSEE-RIL QUESTIONED T HE LEGALITY AND VALIDITY OF THOSE ORDERS BY FILING THE WRIT PETITIO N IN THE HONBLE HIGH COURT OF BOMBAY BEING WP NO.772 OF 1999. THE SAID WRIT PETITION IS STILL PENDING BEFORE THE HONBLE HIGH COURT. IN TH E SAID PETITION, THE ASSESSEE HAS TAKEN A PLEA THAT THE A.O. ILLEGALLY P ASSED THE ORDERS AND ADJUSTED THE REFUNDS AGAINST THE DEMANDS IN THE GRO SS VIOLATION OF THE PROVISIONS OF SEC.245 OF THE ACT. IT IS FURTHER PL EADED THAT, IN FACT, THERE WAS OUTSTANDING DEMAND AGAINST THE ASSESSEE B UT DUE TO ILLEGAL ADJUSTMENT CARRIED OUT BY THE A.O. IN CONTRAVENTION OF PROVISIONS OF SEC.245, THE ASSESSEE COULD NOT GET THE BENEFIT OF THE KVSS SCHEME. THE ASSESSEE HAS ALSO GIVEN THE DETAILS IN THE WRIT PETITION IN RESPECT OF THE REFUND ADJUSTMENTS MADE BY THE A.O. 11. THE ASSESSEES PLEADINGS IN THE WRIT PETITION ARE AS UNDER : THE PETITIONER FURTHER SUBMITS THAT RESPONDENT NO. 1 HAS ACTED ILLEGALLY AND HAS ERRED IN APPARENTLY HOLDING THAT RPEL AND RPPL ARE NOT ELIGIBLE FOR THE BENEFIT OF THE KVSS AS THE Y ARE NOT IN RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 9 ARREARS OF TAXES, INASMUCH AS THE TAX ARREARS HAVE BEEN SET OFF BY AN ADJUSTMENT AGAINST AMOUNTS PAYABLE BY THE REV ENUE TO THE PETITIONER! RPEL / RPPL. THE PETITIONER SUBMITS THAT THE ACTION OF RESPONDENT NO.1 OF APPARENTLY RELYING UPON THE S ET OFF, BY RESPONDENT NO.2, OF AMOUNTS DUE TO THE PETITIONER! RPELI RPPL AGAINST DEMANDS DUE FROM RPEL/RPPL, IN ORDER TO REJ ECT THE KVSS DECLARATIONS OF RPEL AND RPPL IS ILLEGAL AND V ITIATED BY THE FOLLOWING ERRORS OF LAW APPARENT ON THE FACE OF THE RECORD: (I) RESPONDENT NO.1 HAS, CONTRARY TO THE LAW LAID DOWN BY THIS HONBLE COURT, IGNORED THE -FACT THAT THE ADJUSTMEN T OF AMOUNTS DUE TO AN ASSESSEE AGAINST DEMANDS RAISED AGAINST A N ASSESSEE WITHOUT ANY PRIOR INTIMATION TO THE ASSESSEE, OF EI THER THE FACTUM OR THE MANNER OF SUCH ADJUSTMENT, IS ILLEGAL AND NO N EST. HENCE, ADJUSTMENTS MADE BY RESPONDENT NO.2, OF AMOUNTS DU E TO THE PETITIONER, RPEL AND RPPL AGAINST DEMANDS DUE FROM RPEL AND RPPL, WITHOUT PRIOR INTIMATION AS REQUIRED BY SECTI ON 245 OF THE ACT, IS ILLEGAL, WITHOUT JURISDICTION AND NON-EST A RID HAVE TO BE IGNORED AND CANNOT BE REPLIED YOUR HOLD THAT NO ARR EARS ARE DUE FROM RPEL OR RPPL SO AS TO DISQUALIFY THEM FROM THE BENEFITS OF THE KVSS. (II) WITHOUT PREJUDICE TO (I) ABOVE, THE PETITIONER FURTHER SUBMITS THAT SECTION 245 OF THE ACT ONLY PERMITS AD JUSTMENT OF REFUNDS. THE PETITIONER SAYS THAT THE TERM REFUN D CAN APPLY ONLY TO THE RETURN OF AN AMOUNT WHICH AN ASSESSEE H AD EARLIER PAID TO THE DEPARTMENT AND CANNOT APPLY TO INTEREST WHICH IS DETERMINED AS PAYABLE BY THE DEPARTMENT TO AN ASSES SEE, BECAUSE SUCH INTEREST CANNOT BE REGARDED AS FALLING WITHIN THE CONNOTATION OF THE WORD REFUND. THE PETITIONER TH EREFORE SAYS THAT THE ADJUSTMENT, BY RESPONDENT NO.2, OF INTERES T DUE BY THE DEPARTMENT TO THE PETITIONER / RPEL I RPPL AGAINST THE DEMANDS RAISED AGAINST RPLL AND RPPL, IS ILLEGAL, INVALID, IMPERMISSIBLE, WITHOUT JURISDICTION AND NON-EST AND HAVE TO BE IGN ORED AND CANNOT BE RELIED UPON TO HOLD THAT RPEL AND RPPL AR E NOT IN RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 10 ARREARS OF TAXES AND/OR TO HOLD THAT NO TAX REMAINS UNPAID BY THEM. (III) THE PETITIONER FURTHER SUBMITS THAT IN ANY EVENT THE ACTION OF RESPONDENT NO.2, IN THE CASE OF RPEL AND RPPL INTER ALIA FOR THE ASSESSMENT YEARS 1993-94 AND 1995-96, OF RECOVERING THE DEMANDS DUE FROM RPEL AND RPPL, BY W AY OF ADJUSTMENT CUT OF AMOUNTS DUE TO THE PETITIONER! RP ELI RPPL EVEN PRIOR TO THE EXPIRY OF THE PERIOD OF 35 DAYS SPECIF IED UPON RPEL AND RPPL. IS PATENTLY ILLEGAL, WITHOUT N JURISDICTI ON AND NON-EST AND HAS TO BE IGNORED BY RESPONDENT NO.1 IN DETERMI NING WHETHER RPEL AND RPPL ARE IN ARREARS OF TAXES OR IN TEREST AND/OR IN DETERMINING WHETHER TAX OR INTEREST REMAINS UNPA ID BY THEM. THE PETITIONER FURTHER SUBMITS THAT SECTION 25 OF T HE ACT ONLY PERMITS ADJUSTMENT OF REFUNDS DUE TO AN ASSESSEE AG AINST THE TAX DUES OF THAT ASSESSEE AND DOES NOT PERMIT THE ADJUS TMENT OF REFUNDS DUE TO AN ASSESSEE AGAINST THE DEMANDS RAIS ED AGAINST ANOTHER ASSESSEE. THE PETITIONER THEREFORE SAYS THA T THE ACTION OF RESPONDENT NO.2 OF ADJUSTING AMOUNTS DUE TO THE PET ITIONER, FOR THE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS PRI OR TO THE AMALGAMATION OF RPEL AND RPPI WITH THE PETITIONER, AGAINST DEMANDS DUE FROM RPEL ARID RPPL, IS ILLEGAL, WITHOU T JURISDICTION, ERRONEOUS AND NON-EST AND MUST BE IGNORED BY RESPON DENT NO.1 IN DETERMINING WHETHER RPEL OR RPPL ARE IN ARREARS OF TAXES OR INTEREST AND/OR IN DETERMINING WHETHER TAX OR INTER EST REMAINS UNPAID BY THEM. THIS IS PARTICULARLY BECAUSE ASSESS MENTS HAVE BEEN MADE UPON THE PETITIONER AND RPEL AND RPPL ON THE BASIS OF THEIR BEING SEPARATE AND DISTINCT ENTITIES FOR S UCH PERIODS. 12. IN SUM AND SUBSTANCE, THE ASSESSEE HAS CHALLENG ED:- (I) THE REFUND ADJUSTMENTS MADE BY THE A.O. MAKING THE OUTSTANDING DEMAND TO NIL; AND (II) DISMISSAL OF THE APPLICATIONS UNDER KVSS BY TH E LD. CIT, MUMBAI. RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 11 13. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUB MITS THAT THE ONE OF THE CORE ISSUE IN THE WRIT PETITION AS WELL AS IN THESE APPEALS IS COMMON I.E. WHETHER THE A.O. HAS CARRIED OUT THE RE FUND ADJUSTMENTS AGAINST THE OUTSTANDING DEMAND, IN THE CONTRAVENTIO N OF PROVISIONS OF SEC.245 OF THE ACT. HE SUBMITS THAT THERE IS ONE M ORE ISSUE BEFORE THE HONBLE HIGH COURT IN THE WRIT PETITION I.E. IN RES PECT OF DISMISSAL OF APPLICATIONS FILED BY THE ASSESSEE UNDER THE KVSS. IN OUR OPINION, AS THE ISSUE OF LEGALITY AND VALIDITY OF THE REFUND AD JUSTMENTS MADE BY THE A.O. IS ALSO BEFORE THE HONBLE HIGH COURT FOR ADJUDICATION WHICH WILL HAVE BEARING ON THE SECOND PLEA OF THE ASSESSE E I.E. DISMISSAL OF THE APPLICATIONS UNDER THE KVSS, IT IS ADVISABLE TO WAIT TILL THE DECISION OF THE HONBLE HIGH COURT IN THE WRIT PETI TION FILED BY THE ASSESSE-RIL. IT IS NOT DISPUTED BEFORE US THAT SAM E ISSUE IS ARISING, ON IDENTICAL SET OF FACTS IN ALL APPEALS BEFORE US, WH ETHER THE A.O. HAS MADE THE REFUND ADJUSTMENTS IN CONTRAVENTION OF THE PROVISIONS OF SEC.245 OF THE ACT. IN OUR HUMBLE OPINION, WHEN TH E ISSUE IS PENDING BEFORE THE HONBLE HIGH COURT, WE CANNOT PROCEED TO DECIDE THIS ISSUE. WE, THEREFORE, WITH THE CONSENT OF BOTH THE PARTIES RESTORE THE ISSUE OF LEGALITY AND VALIDITY OF REFUND ADJUSTMENTS CARRIED OUT BY THE A.O. IN ALL THESE APPEALS; TO THE FILE OF THE A.O. TO DECID E THE SAME AFTER A DECISION OF HONBLE HIGH COURT OF BOMBAY IN WRIT PE TITION FILED BY THE ASSESSEE BEING WRIT PETITION NO.772 OF 1999 (WHICH IS THE ONLY WRIT PETITION WHICH IS BROUGHT TO THE NOTICE OF THE BENC H). BOTH THE PARTIES HAVE NO OBJECTION TO RESTORE ALL THESE APPEALS TO T HE FILE OF THE A.O. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE LD. CI T (A) AND RESTORE THE ISSUE OF LEGALITY AND VALIDITY OF THE REFUND ADJUST MENTS MADE AGAINST THE OUTSTANDING DEMANDS, TO THE FILE OF THE A.O. TO DISPOSE OF THE SAME AFTER THE DECISION OF THE HONBLE HIGH COURT IN THE WRIT PETITION FILED BY THE ASSESSEE. RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 12 14. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST OF NOVEM BER, 2011. SD/- SD/- ( G.E. VEERBHADRAPPA ) PRESIDENT ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE : 21ST NOVEMBER, 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -III, MUMBAI. 4) THE CIT-3, MUMBAI. 5) THE D.R. A BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 13 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 21.11.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 21.11.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER RELIANCE INDUSTRIES LIMITED RELIANCE POLYETHYLENE LIMITED RELIANCE POLYPROPYLENE LIMITED ITA NO.1853/MUM/2004 & 7 OTHERS 14