SMT RINKU CHAKRABORTHY V. THE DEPUTY COMMISSIONER OF INCOME TAX

WP/40052/2018

AI Insights

Smt. Rinku Chakraborthy filed a writ petition against the Deputy Commissioner of Income Tax, challenging the dismissal of her Miscellaneous Petition by the Income Tax Appellate Tribunal, Bengaluru. The Tribunal had earlier dismissed her main appeal regarding the taxation of loans and advances as 'Deemed Dividend' under Explanation-2 to Section 2(22) of the Income Tax Act, 1961, for the assessment year 1995-96. The High Court found that the Tribunal's dismissal of the Miscellaneous Petition was discretionary and not subject to writ jurisdiction, advising the petitioner to seek redress under Section 260A of the Act.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 755072 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-09-2018
• Assessment Year: misc
• Other Referred Cases: CIT vs. Damodaran
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: VANI
• Keywords: Deemed dividend; Income Tax; Limitation; Miscellaneous petition; Writ petition
• Section: 260A; 2(22); 226; 227

Judgement Text

" 1/5 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2018 BEFORE THE HON’BLE Dr.JUSTICE VINEET KOTHARI W.P.No.40052/2018 (T-IT) BETWEEN SMT. RINKU CHAKRABORTHY W/O SRI DEBASISH CHAKRAVARTY AGED ABOUT 58 YEARS R/AT. NOW AT No.1702, AMBROSIA BUILDING HIRANANDANI GARDEN POWAI MUMBAI-100076, MAHARASHTRA. ...PETITIONER (By Mrs. VANI H, ADV.,) AND THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(1) CENTRAL REVENUE BUILDING QUEENS ROAD, BANGALORE-560001. ...RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 31-08-2018 PASSED IN MP No.256/2018 ARISING OUT OF ITA NO.1474/BANG/2004 RELATING OT ASSESSMENT YEAR 1995-96, BY THE APPELLATE TRIBUNAL VIDE ANNEXURE-J AND CONDONE THE DELAY & ETC., THIS PETITION COMING ON FOR PRLY. HEARING THIS DAY, THE COURT MADE THE FOLLOWING: Date of Order 24-09-2018 W.P.No.40052/2018 Smt. Rinku Chakraborthy Vs. The Deputy Commissioner of Income Tax 2/5 ORDER Mrs. Vani H, Adv. for Petitioner. The petitioner/assessee-Smt.Rinku Chakraborthy has filed this writ petition in this Court on 07.09.2018 aggrieved by the order dated 31.08.2018 passed by the Income Tax Appellate Tribunal (for short ‘Tribunal) ‘B’ Bench, Bengaluru, dismissing M.P.No.256/Bang/2018 arising out of ITA No.1474/Bang/2004 for the A.Y.1995-96 (Smt.Rinku Chakraborthy –vs- The Deputy Commissioner of Income Tax). The Miscellaneous petition filed by the Assessee was rejected as barred by limitation. 2. The Tribunal had dismissed the main Appeal filed by the Assessee vide earlier order dated 13.09.2017 and a copy of which is placed on record as Annexure-F. The Tribunal had upheld the order of the learned Commissioner of Income Tax (Appeals) upholding the applicability of Explanation-2 to Section 2(22) of the Income Tax Act, 1961 (for short ‘Act’) holding that the loans and advances made to the Directors of the Company Date of Order 24-09-2018 W.P.No.40052/2018 Smt. Rinku Chakraborthy Vs. The Deputy Commissioner of Income Tax 3/5 were taxable as ‘Deemed Dividend’ under the said provisions of the Act. The relevant extract of the Tribunal’s original appeal Order dated 13.09.2017 is quoted below for ready reference: “4. We have considered the rival submissions. In our considered opinion, in view of the provisions of the Explanation – 2 to section 2 (22) and also in view of this fact that the loan was admittedly paid on 28-03-1995, the profit of the current year up to 28-03-1995 has to be considered as accumulated profit. Since the accumulated profit as on 31-03-1994 was Rs. 632,415/- and on 31-03-1995 Rs.58,51,672/-, the accumulated profit up to 28-03-1995 cannot be less than 30.30 Lacs being Rs.6.60 lacs multiplied by 5 if it is considered that the profit of the current year is arising evenly through out the year because there is no material brought on record by the assessee that the profit after 28-03-1995 was excessive as compared to prior period of the current year. In this view of the matter, there appears to be no infirmity in the order of CIT (A). 5. Now, we examine the applicability of the tribunal order cited by the learned AR of the assessee since the judgment of Hon’ble apex Court cited by him is no applicable because of change in law. We find that the tribunal in Para 31 of this order has followed the same judgment of Hon’ble apex Court rendered in Date of Order 24-09-2018 W.P.No.40052/2018 Smt. Rinku Chakraborthy Vs. The Deputy Commissioner of Income Tax 4/5 the case of CIT vs. Damodaran (Supra) which is as per 1922 Act and we have already seen that because of change in law in the 1961 Act, this judgment of Hon’ble apex Court is not applicable and for the same reason, this tribunal order is also not applicable because this tribunal order is by following the same judgment of Hon’ble apex Court.” 3. The assessee, however, did not chose to file any appeal before the High Court prescribed under the provisions of Section 260A of the Act raising the substantial questions of law, if any, arising from the order of the said Tribunal. The Assessee, however, chose to file belatedly only a Miscellaneous Petition purportedly seeking certain corrections in the order passed by the Tribunal dismissing the main appeal filed by the Assessee. The Miscellaneous Petition was barred by limitation and accordingly rejected. The assessee, therefore, has preferred this writ petition in this Court. 4. Having heard the learned counsel for the petitioner-assessee, this Court is satisfied that the writ jurisdiction against the order passed by the learned Tribunal Date of Order 24-09-2018 W.P.No.40052/2018 Smt. Rinku Chakraborthy Vs. The Deputy Commissioner of Income Tax 5/5 dismissing the Miscellaneous Petition as time barred is not available to the petitioner as it is a discretionary order. The petitioner-assessee ought to have and could have very well preferred an appeal under Section 260A of the Act before the High Court, if at all she was dissatisfied with the order of the Tribunal dismissing her appeal and if any substantial question of law arose in the matter. 5. Therefore, the present writ petition filed by the petitioner/assessee is misconceived and the same is liable to be dismissed and it is accordingly dismissed. No costs. 6. However, the petitioner/assessee is at liberty to file an appeal under Section 260A of the Act in accordance with law. Copy of this order be sent to the Respondent forthwith. Sd/- JUDGE TL "