M/S SATYAM COMPUTER SERVICES LIMITED, HYDERABAD V. THE COMMR OF INCOME TAX (CENTRAL), HYD AND ANOTHER

WP/17526/2011

AI Insights

The case revolves around a series of writ petitions filed by Tech Mahindra Limited, formerly Satyam Computer Services Limited, challenging the income tax assessments made by the Income Tax Department for several assessment years. The petitions argued that the assessments were based on fictitious income and did not reflect the actual financial transactions of the company. The High Court examined the legal provisions under the Income Tax Act, 1961, and the constitutional arguments presented, leading to the conclusion that the assessments were not only incorrect but also violated fundamental rights under the Constitution. The court's decision emphasized the need for a fair and just assessment process, free from arbitrary actions by tax authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 752510 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 31-01-2025
• Assessment Year: misc
• Other Referred Cases: State of Kerala and Others vs. Kurian Abraham (P) Ltd. and another, Corporation Bank vs. Saraswati Abharansata and Another, Satyam Computer Services Limited vs. Central Board of Direct Taxes and Others, Satyam Computer Services Limited vs. Union of India, Tech Mahindra Limited vs. Central Board of Direct Taxes, Tech Mahindra Limited vs. Commissioner of Income Tax, Tech Mahindra Limited vs. Additional Commissioner of Income Tax, Tech Mahindra Limited vs. Deputy Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD; B SAPNA REDDY; A RAMAKRISHNA REDDY; AJAY KUMAR KULKARNI; B NARASIMHA SHARMA
• Assessee Lawyers: ARVIND DATAR; JEHANGIR MISTRI; K VIVEK REDDY
• Keywords: Assessment Order; Fraud; Income Tax; Mandamus; Provisional attachment; Reassessment; Special Audit
• Section: 147; 148; 119; 201; 154; 142(2A); 158BFA; 234C; 234D; 271C; 265; 210; 273; 234F; 271; 226; 2348; 155; 2344; 300A; 271CA; 211

Judgement Text

"[ 337s ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE THIRTY FIRST DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI Writ Petition No.23255 of 2011; Writ Petition No.17518 of 2011; Writ Petition No.17526 of 2011 Writ Petition No.19622 of 2011 Writ Petition No.3906 o12012; and Writ Petition No.9667 of 2013 wRIT PETITION NO:23255 OF 2011 Between: M/s. Satvam Comouter Services Limited, Now known as Tech .Mahindra Limited, witr its Ceoistered'Office at Gatewav Buildinq, Apollo Bunder Mumbai- 400 001 and Jtio frivindrts office at Mahindra Satyam lniocity, Unit 12._Plot 35/36, Hi-Tech.City tavori, S,i*eV No.64, Madhapur Hyderabad --SOo OAt, Represented by its Vice President Mr.Santosh Kumar Nair cause Title is amended as per court order dated 16.12.2023 Vide l.A. No.4 of 2013 ( WP.MP.No.35162 o12013 ) .,.PETITIONER AND 1 Central Board of Direct Taxes, Department of Revenue' Ministry of Finance' Government of lndia The Commissioner of lncome Tax' Ayakar Bhavan' Basheerbagh' Hyderabad #:,ls:;,1,.\"8il\" iBT$::\"i:\"r\",\",1 r'i\"?ffi. \"x' c e ntra I Ra ns e-3' Aava ka r U;,E:lgr:*l'\"n1,\"\":#rffi:L?:L?: I nco me rax' Mumbai' 3'd Froor' citv I r' m:;'\"iltzl i)\"#J',i[8i\"r11\"3,1'r??i court order dated 16l2'2o23 Vide rA ...RESPONDENTS 2 3 4 2 Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate Writ, Direction or Order, in the nature of Mand amus (i) Quashing the order dated 1 1.07.2011 bearing No 295/1/2009-lT (lNV.l)(Part) passed by Respondent No.1 as arbitrary, illegal, violative of S.119of lncomeTaxAct, 1961 andArt. 14, 19(1)(g),265and3O0A of the Constitution of lndia (ii) declare the Assessment Order for AY 2003-04 to Ay 2006-07 as illegal, void ab initio, and violative of Article 265 of the Constitution of lndia. (iii) direct the Respondent No.liRespondent No.3 to re-quantify/re-compute the income by conducting a fresh and proper assessment for Ay 2003- 04 to AY 2008-09 read together based on the revised financial statements of petitioner for the year ending 3.1st March 200g wherein the irregularities in the financial statements pertaining to Ay 2003-04 to AY 2008-09 have been duly adjusted as prior period adjustments. (iv) permit the petitioner to file revised returns for the Ay 2007-0g and Ay 2008-09 based on the audit financiar statements for the said years read together with the audited financiar statements for the year ending 3.rst March, 2009 prepared pursuant to the orders of the Company Law Board and thereafter conduct a proper assessment excluding the fictitious sales and fictitious interest income. (v) (v,) decrare that the revised audited financiar statements of the petitioner which have been approved by the sharehorders for the year ended March 31, 2009, wherein the irregularities in the past financial statements have been rectified as prior period .adjustments, be the basis of conducting assessment proceedings and any other proceeding under the tncome Tax Act, 1961 for the Ay 2OO3_04 to Ay 2008-09. direct Respondents not to proceed with recovery of tax ti, the income is computed / recomputed (iv) above pursuant to the reliefs sought in (ii), (iii) and dec,are the Assessment iresar, void \"0\",;'\"; oll\": ror AY 2002-03 t rndia _ viorative \"r An,\";;;;1,,0 o, 2006-07 as the Constitution of (vii) 3 (viii) ,,Dectare the Dra for Ay 2002_03rft Assessment Order passed by the Respondent No. 3 orArticre ,.. \",;:\"j\"1:,li;lrJl,ii.llgar, void ab initio and viorative (ix) \"Declare the retl 2oo2_03,\",,,\"n\"',\"J,,1j:1:iffJl::ljJ\"rfi ,\",#:ffi il: can be placed on (x) direct the *\".o\"\"jli,\"il;Lil::::,,iluuo,,n\" the income by co n ducti ns a f res h a nd, ;: j[::;1irlJ.ff;j: 03 based on the report of the Forensic Accountant dated 25.1 1.2016. (prayer is amended as per Court Order dated 16.12.2[23vide l.A.No.2 of 2017 in W.p.No.232 SS of 2011) (xi) Dectare the Draft A Assessins oo,\"\". \"\"-t\"^::T:::o\"\"t passed bv the Respondent No'3 - n t o and vio,ative ;H lX,J;ll li\"i\"Il;llii,:,;;:*\",, ,o,0 ,o (xii) Decrare the returns fired by the petitioner for the Assessment years Ay 2005_04 to Ay 2008 (xiii) And pass such othe as illegal' vitiated by fraud and viod ab initio. in the circumstr..\".r;rr:;.\"as this Hon,ble Court deems fit and proper (Additional Prayer is Amended as per court order dated 31 .01.202s vide t.A.No.4 of 2011(W.p.M.p.No.3 2354 of 2011) inW.p.No.23255 of 2011) Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all assessment proceedings for Assessment years 2oo3-04 to 2008-09 pending disposal of the Writ petition. 1.A. NO: 10F 201 1 MP. NO:28460 oF201 1) r.A. NOi 2OF 2011 P. NO:28461 oF 2011) Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to 4 grant stay of all recovery of tax for AY 2003-04 to AY 2008-09 pending disposal the pendency of this Writ Petition' l.A. NO: 3 OF 2011(WPMP' NO: 28462 OF 20111 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit tir\"o in.rpiort'ortne petition, the High court may be pleased to grant stay of operation o\"tn\"'rnP'nn\"d Ord:l^d^a:ed 11'o7'2011 passed by the 1\"t Respondent for the ntt\"\"t'\"nt Years 2003-04 d 2008-09 and direct the Respondents not to proceed with the encashment of the bank guarantee during ing that in the circumstances stated Petition under Section 151 CPC pray the High Court maY be Pleased to in the affidavit filed in support of the petition' nk Guarantee finished by Petitioner direct the Respondents not to encash the Ba nch Pending disPosat of the Writ on Bank of Baroda' Khairtabad Bra .A. NO:6 oF2011 MP. NOi 3810 10F drawn Petition l.A. NO:2 oF2012(wPMP NO: 36621 OF 2012 Between: 20'l1) lncome Tax, Central Range-3' Aayakar PETITIONERS 1 centrar Board _of Direct Taxes, Department of Revenue, Ministry of Finance, Government ot ln0la' The Commissioner of lncome Tax (Central)' Ayakar Bhavan' Basheerbagh' 2 Hyderabad ' I[:,f,l:,:\"JLi\"B?T'T'i'J3::jo:l AND M/s. Satyam Computer Services Limited ..(a C'o-Iq'nu incorporated under the #s*ffi #;ilr;;si#'gEltllf %lt'ffi -\"sflis,':'$:3r'ii,?iHil iivEEiibrE'- bob-,te I iiepreJentea oy its Assistant'Vice President. ...RESPONDENI of the Writ Petition' 5 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the respondent hereinMrit petitioner to extend the bank guarantee for Rs.617 Crores. l.A. NO: 1 OF 2013(WVMP. NO: 1722OF 20131 Petition under Section 151 CPC praying that in the circumstances stated in the aftidavit tiled in support of the petition, the High Court may be pleased to vacate the order dated 31-01-2012 in WPMP No. 28460 of 2011 in WP No. 23255 of 2011. l.A. NO: 2 OF 2013(WVMP. NO: 1723 OF 2013) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the order dated 31-01-2012 in WPMP No. 2846'1 of 2011 in WP No. 23255 ot 2011. l.A. NO: 3 OF 2013 (WPMP. NO: 12006 0F 2013) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the respondent hereinMrit petitioner to extend the bank guarantee for Rs. 617 Crores. l.A. NO: 5 OF 2013 (WPMP. NO: 38813 OF 2013) l.A. NO: 6 0F 201 3(WPMP. NO:38815 OF 2013) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition' the High Court may be pleased to Petition under Section 151 CPC praying that in the circumstances stated intheaffidavitfiledinsupportofthepetition,theHighcourtmaybepleasedto direct the Writ petitioner to extend the Bank guarantee for Rs' 617 Crores in favour of the Deputy Commissioner of lncome-tax' Circle 2(3)' Mumbai' 6 modify the order dated 31-01-2012 in WPMP No. 28460 of 2011 in W.P. No. 23255 of 2011. Counsel for the Petitioner: SRI ARVIND DATAR, SRI JEHANGIR MISTRI & SRI K. VIVEK REDDY, SENIOR COUNSEL FOR SRI K. PRATIK REDDY Counsel for the Respondents: SRI J.V. PRASAD, SENIOR S.C. FOR INCOME TAX M/s. B. SAPNA REDDY, SRI A. RAMA KRISHNA REDDY AND SRI AJAY KUMAR KULKARNI FOR SRI B. NARASIMHA SHARMA, ADDITIONAL SOLICITOR GENERAL OF INDIA WRIT PETITION NO: 17518 OF 2011 Between: M./9 Salyam Computer Services Limited, Now known as Tech Mahindra Limited, with its Registered Office at Gateway Building, Apollo Bunder Mumbai-400 00,l and also having its office^at Mahindra Satyam lnfocity, Unit 12, Plot 35/36, Hi-Tech City t-^ayo.uJ, 9yrye_V No.64.,-Madh^apur Hyderabad - 500 081, Represented by its Vice President Mr.Santosh Kumar Nair 9.9!Eg fitle is amended as per Court Order dated 16.12.2023 Vide l.A. No.3 of 2013 ( WP.MP.No.351 58 of 2013 in W.p.No.i 751B of 201 1 ) ...PETITIONER AND ' Il:\".\"r\"d:fissioner of lncome Tax (cenkal), Avakar Bhavan, Basheerbagh, 2. The Additionar Commis5i6nsp of lncome Tax, Central Range_3, Aayakar Bhavan, 8t'' Ftoor, Basneerbagh, Hviilri'oii.'-^, \" .,.RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit fired therewith, rhe High court may be pleased to issue an appropriate writ, direction or order, to a) set aside the order issued by Respondent No. 2 Assessing Officer directing the petitioner company to get its accounts audited by a Special Auditor tor AY 2007-08 under S. 142(2A)of the rncome Tax Act, .t961 vide 7 F. No. CR-3i Hyd I 1 42(2A)l 2007-08 dated 23-1 2-20 1 O and any co nsequential proceedings; b) Alternatively and without prejudice, declare the terms and reference of the Special Audit given by Respondent No.2 Assessing Officer vide F.No. Addl.ClT/CR-3/AACCS8639QllT12007-08 daled 31-12-2010 as illegal, arbitrary and in violation of provisions of the lncome Tax Act, 1961. c) declare the Order dated 17.02.2011 issued by Respondent No.2 Assessing Officer rejecting the petitioner's plea to include the verification of fictitious income in terms of reference for Special Audit for AY 2007-08 as illegal, without jurisdiction and violation of the Provisions of lncome Tax Act, and the rules made there under d) and pass such other orders as this Hon'ble Court deems fit and proper in the circumstances of the case. (Additional Prayer is Amended as per Court Order dated 31.01.2025 vide l.A.No.4 of 2011(W.P.M.P.No.22207 of 2011) in W.P.No.1751B of 2011) l.A. NO: 1 OF 2011(WPMP. NO: 21073 OF 2011) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of operation of the impugned Order directing the Petitioner Company to get its accounts audited by a Special Auditor for AY 2007-08 under S.142(24) of the lncome Tax Act, 1961 vide F.No. CR-3/Hyd.l142(2A)12007-08 dated 23-12-2010 and all consequential proceedings pending disposal of this writ Petition. l.A. NO: 2 OF 2011(WPMP. NO: 21 074 0 F 20111 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grantstayofoperationoftheimpugnedorderdirectingthePetitionerCompanyto getitsaccountsauditedbyaSpecialAuditorforAY200T-08underS.142(2A)of the lncome Tax Act, 1961 vide F.No. cR-3/Hyd/142(2A)/2007-08 dated 23-12-2010 and all consequential proceedings, pending disposal of this Writ Petition. 6 l.A. NO: 3 OF 2011(WPMP. NO: 22206OF 2A11 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to take on record the aforesaid additional grounds in WP No. 17518 of 2O11. l.A. NO: 1 OF 2013(WVMP. NO: 2046 OF 2013) Between: 1. The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad. 2. The Additional Commissioner of lncome Tax, Central Range-3, Aayakar Bhavan, Basheerbagh, Hyderabad. AND ...PETITIONERS M/s. Satyam Computer Services Limited (a Company incorporated under the provisions of Companies Act, 1956) having its registered office at Mahindra Satyam lnfocity, Unit 12, Plot 35/36, Hi-Tech City Layout, Survey No.64, Madhapur Hyderabad - 500 081, Rep. by its Assistant Vice President. ...RESPONDENT Petition under Section '151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the order dated 31-01-2012 in WPMp No. 21073 ol 2O11 in W.p. No. 1751 8 of 201 1 . I.A. NO: 2 OF 201 3(WVMP. NO: 2074 0F 20131 Petition under Section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to vacate the order dated 31-01-2012 in WpMp No 17518 of 2011. 21074 of 2011 in W.p. No. l.A. NO: 4 OF 2O13(WPMP. NO:3881 4 0F 2013) Petition under section '151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to modify the order dated g1-01-2012 in wpMp No. 21073 0f 2011 in w.p. No. 17518 of 2011. 9 Counsel for the Petitioner: SRI ARVIND DATAR, SRI JEHANGIR MISTRI & SRI K. VIVEK REDDY, SENIOR COUNSEL FOR SRI K. PRATIK REDDY Gounsel for the Respondents: SRI J.V. PRASAD, SENIOR S.C. FOR INCOME TAX M/s. B. SAPNA REDDY, SRI A. RAMA KRISHNA REDDY AND SRI AJAY KUMAR KULKARNI FOR SRI B. NARASIMHA SHARMA, ADDITIONAL SOLICITOR GENERAL OF INDIA WRIT PETITION NO: 17526 OF 20'11 Between: M/s. Satyam Computer Services Limited, Now known as Tech Mahindra Limited, with its Fieoistered'Office at Gatewav Buildinq, Apollo Bunder, Mumbai-400 001 and Jtio fravind its office at tvlahindra Satvam lnfbcitv, Unit 12, Plot 35/36, Hi-Tech City Layout, SJrvey No.64, Madhapur Hyderabad -500 081, Represented by its Vice President Mr.Santosh Kumar Nair (Cause Title is amended as per Court Order dated: 16.12.2023 Vide l.A. No.2 of )ot s (wp.tvtp.No.3s159 ot 2013) in w.P.No.17526 ot 2011) ..,PETITIONER AND 1. The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad. 2. The Additional Commissioner of lncome Tax, Central Range-3, Aayakar Bhavan Btn Floor Basheerbagh, Hyderabad. ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ of Mandamus or order to a) Set-aside the order issued by Respondent No.2 Assessing Officer directing the Assessee company to get its accounts audited by a special Audit under s.142(2A) of the lncome Tax Act, 1961 dated 23-12-2o10 vide F.No.CR.3/Hydl142(2A)t2oo2-03asillegal,arbitraryandinviolationofS. 142(2A) of the lncome Tax, act, 196'l and all consequential proceedings' t0 b) Alternatively and without prejudice, set aside the terms and reference of the Special audit given by Respondent 2 Assessing Officer Vide F.No.Addl.ClT/CR-3/AACCS8639Q/lT/2002-03 dated 31 -1 2-201 O. c) declare the Order dated 17-02-2011 issued by Respondent No.2 Assessing Officer rejecting the petitioner's plea to include the verification of fictitious income in terms of reference for Special Audit for AY 2002-03 as illegal, without jurisdiction and violation of the Provisions of lncome Tax Act and the rules made there under. d) And pass such other orders as this Hon'ble Court deems fit and proper in the circumstances of the case. (Additional Prayer is Amended as per Court Order dated 31 .01 .2025 vide l.A.No.2 of 2O11 (W.P.M.P.No.22208of 20'1 1)inW.P.No.17526of 2011) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to Suspend the operation of the Order issued by Respondent No.2 directing the Assessee Company to get its accounts audited by a Special Audit Under Sec. 142(2A) dated 23-12-2010 vide F.No. CR-3/Hyil1a2(2A)12002-03 and all consequential proceedings pending disposal of the main Writ Petition. l.A. NO: 3 OF 2011(WPMP. NO:22209 OF 2011) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to take on record the aforesaid additional grounds in WP No. 17526 of 2011. l.A. NO: 'l OF 2012twPMP. NO: 16898 0F 2012 ) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to permit the completion of the proceedings, pending before the Dispute Resolution Panel, for the Assessment Year 2002-03, pending disposal of the Writ petition. l.A. NO: 1 OF 2011(WPMP. NO: 21082 OF 2011) il l.A. NO: 1 OF 2013(WVMP. NO: 2025 OE2Q13) Between: '1 . The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad. 2. The Additional Commissioner of lncome Tax, Central Range-3, Aayakar Bhavan, Basheerbagh, Hyderabad. ...PETITIONERS AND M/s. Satyam Computer Services Limited (a Company incorporated under the orovisions of Compinies Act, '1956) havinq its registered office at Mahindra Satyam infocity, Unit 12, Plot 35/36, Hi-Tech City Layout, Survey No.64, Madhapur Hyderabad, Rep. by its Assistant Vice President. ...RESPONDENT Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to vacate the order dated 31-01-2012 in WPMP. No. 21082 of 2011 in W P No 17526 of 2O11. l.A. NO: 3 OF 2013(WPMP. NO:3 9002 0F 2013) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to modify the order dated 31-01-2012 in WPMP No. 21082 of 2O11 in WP No' 17526 of 2011. Counsel for the Petitioner: SRI ARVIND DATAR, SRI JEHANGIR MISTRI & SRI K. VIVEK REDDY, SENIOR COUNSEL FOR SRI K. PRATIK REDDY SRI S. RAVI Counsel for the ResPondents: snr.r'v' iilsAD' sENloR s'c' FoR lNcoME rAx M/s' B' SAPNA REDDY' SRll-\"ryAMA KRISHNA REDDY AND SRI AJAY KUMAR KULKARNI FOR iELh'H,1i'JBl,ffiBt.Hi' RAL o F I N D I A Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue an appropriate Writ, Direction or Order, a' declare the impugned Notice dated 24.03.2009 and any consequentiar order passed by the Respondent No. 3 reopening the assessment proceedings under Section 147 and 148 for the Assessment year 2OOZ_03, as illegal, arbitrary and lack of jurisdiction and in vioration of section 147 of the rncome Tax Act, 1g61. 12 Between: LA. NO: 10F 2011 M P. NO: 23729 0F2011) I.A. No: 20F 2013(WP MP. NO: 35160 0F 2013) M/s.. Satyam Computer Services Limited, (a company incorporated under the provisions - of Companies Act, 1956), havin! its Regidtered Office at Mahindra 9rty\"q lnfocity,-Unit 12. Ptot 35/36, Hi-Tech City Layou-t, Survey No. 64, Madhapur, Hyderabad 500 081, represented by its Assistani Vic6 president- AND ...PET|T|ONER Petition under section 151 cPC praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to suspend the impugned Notice dated 24.03.2009 and any consequentiar order passed by the Respondent No. 3 reopening the ass section 14t and 148 torthe Assessment year r..r:.t;:J:,[:::::[::J:17 lack of jurisdiction and in vioration of section 147 0f therncome Tax Act, 1g61. tr petition under Section 1Sl CpC praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to permit petitioner to continue the Writ petition in fl-re name of Tech Mahindra WRIT PETITION NO: 19622 OF 201'l 1. The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad 2. The Additional Commissioner oJ lncome Tax, Central Range 3, Aayakar Bhavan, 8tn Ftoor. Basheerbagh,-Hvoeiddio --' - 3. Dy. Commissioner of lncome Tax, Central Circle - l, Basheerbagh, Hyderabad ..,RESPONDENTS l3 Limited by substituting the name of the Petitioner Satyam Computer Services Limited with Tech Mahindra Limited. l.A. NO: 1 OF 2013(WVMP. NO: 2047 OF 2013 Between: 1. The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad 2. The Additional Commissioner of lncome Tax, Central Range 3, Ayakar Bhavan, Basheerbagh, Hyderabad. 3. The Deputy Commissioner of lncome Tax, Central Circle, Basheerbagh, Hyderabad. ...PETITIONERS AND ...RESPONDENT Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the order dated 31-01-2012 in WPMP No. 23729 of 2011 in WP No 19622 of 2O11. l.A. NO: 3 OF 2013(WPMP. NO:39001 OF 2013) Petition under section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to modify the order dated 31-01-2012 in wPMP No. 23729 of 2011 in w.P. No. 19622 of 2011. M/s. Satyam Computer Services Limited, (a Company incorporated under the orovisioni of Comoinies Act, 1956), havinq its registered office at l rlahindra Satyam infocitv, Unit 12, Plot 35/36, Hi-Tech eity Layout, Survey No.64, Madhapur, Hyderlbad, rep. by its Assistant Vice President CounselforthePetitioner:SRIARVINDDATAR,SRIJEHANGIRMISTRI& SRI K. VIVEK REDDY, SENIOR COUNSEL FOR SRI CUDDAPAH NANDA GOPAL Counsel for the ResPondents: SRI J.V. PRASAD, SENIOR S.C. FOR INCOME TAX M/S. B. SAPNA REDDY, SRI A. RAMA KRISHNA REDDY AND SRI AJAY KUMAR KULKARNI M/s. Satyam Computer Services Limited Now known as Tech Mahindra Limited with its Registered Office at Gateway Building Apollo Bunder Mumbai - 400 001 and also having its office at Mahindra Satyam lnfocity Unit 12 Plot 35/36 Hi-Tech citv Lavout Survey.No.64 Madhapur Hyderabad 500 081 Represented by its Vice presideni Mr Santosh Kumar Nair 14 FOR SRI B. NARASIMHA SHARMA, ADDITIONAL SOLICITOR GENERAL OF INDIA WRIT PETITION NO: 3906 OF 2012 Between: ...PETITIONER AND 1 . The Additional Commissioner of lncome Tax, Central Range - 3, Hyderabad 2. The Commissioner of lncome Tax, (Central), Hyderabad. ..RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, Direction or order, one in the nature of writ of Certiorari & Mandamus (i) quash the impugned order under s.2B1B of the lncome tax Act .rg61 passed bv Respondent No.1 (F.No. Addr. crr/cR-3/scsl/2ol 1-12 dated 30.0i .2012) (Annexure p_1). (ii) quash the 03.02.20i2 order passed by the Respondent No..t under S.2Bl of the Income Tax Act, .196i (F.No. Addt.C|ICR-3/SCSL/201.1- 1 2 dated 03.02.2012) pursuant to the impugned Order (Annexure p-g) (iii) direct that the Respondents shail not pass any further orders with respect to assessment and recovery for Ay 2002-03 to 2008-0g ti, the writ petitions W.p.Nos. 11518 ot 2011,17526 oI 2011,23255 of 2011 and 19622 of 2O11 are finally heard and disposed of. (Caqsg Title is amended as per Court Order dated: 16J22023 Vide l.A. No.1 of 2013 WP MP.No.35161 of 2013 in W.P.No.3906 ot 2012) l.A. NO: 3 OF 2012(WPM P. NO: 4911 OF 20121 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of the impugned Order bearing F.No. Addl. CIT/CR-3/SCSL|2011-12 dated 3O.O'l .2012 (Annexure P-l ) issued by Respondent No.'1 under Section 28l B of the lncome Tax Act, 1961 , during the pendency of this Writ Petition. l.A. NO: 6 OF 2012(WPMP. NO:37285 0F 2012) Between: 1. The Additional Commissioner of lncome Tax, Central Range - 3, Hyderabad. 2. The Commissioner of lncome Tax, (Central), Hyderabad. ...PETITIONERS AND M/s. Satyam Computer Services Limited, (a Company incorporated und-er the provisioni of Compinies Act, 1956), having iti registered office at Mahindra Satyam infocity, Unit 12, Plot No.35/36, Hi-Tech City Layout, Survey No.64, Madhapur, Hyderibad - 500 081 , Represented by its Assistant Vice President ...RESPONDENT Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to permit the petitioner herein, to lift the attachment, in respect of the property at Sl.No. '13 of Annexure-B, Part-A appended to the impugned proceedings dated 3o-o1-2012 (\"No.3, 1\"t Main,60 Ft. Road, lll Block 4th stage, Basaveswaranagar, Bangalore). l.A. NO: 1OF 2014tWPMP. NO: 45601 OF 2014 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to modify the order dated 27-03-2012 in WPMP.No.491'l ol 2012 in W P'No 3906 of 2012. counselforthePetitioner:SRIARVINDDATAR,SRIJEHANGIRMISTR|& SRI K. VIVEK REDDY, SENIOR COUNSEL FOR SRI K, PRATIK REDDY l5 t6 Counsel for the Respondents; SRI J.V. PRASAD, SENIOR S.C. FOR INCOME TAX t tl/s. B. SAPNA REDDY, SRI A. RAMA KRISHNA REDDY AND SRI AJAY KUMAR KULKARNI [:oR SRI B. NARASIMHA SHARMA, ADDITIONAL SOLICITOR GENERAL OF INDIA WRIT PETITION NO: 9667 OF 2013 Between: M/s. Satyam Computer Services Limited, Now known as Tech Mahindra Limited, with its Registered Office at Gateway Building, Apollo Bunder, Mumbai - 400 001 and also having its office at Mahindra Satyam lnfocity, Unit '12, Plot 35/36, Hi - Tech City Layout, Survey No. 64, Madhapur, Hyderabad - 500 08't, Represented by its Vice President Mr. Santosh Kumar Nair (Cause Title is amended as per Court Order dated 16.12.2023, Vide l.A.No.3 of 2013 WP.MP.No.35167 of 201 3) in W.P.No.9667 of 2013). ...PETITIONER AND 1. The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad 2. The Additional Commissioner of lncome Tax, Central Range - 3, Room 803, Aayakar Bhavan, 8th Floor, Basheerbagh, Hyderabad. 3. Union of lndia, Ministry of Finance, Department of Revenue, New Delhi. Represented by its Secretary ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, Direction or order more in lhe nature of Certiorari and Mandamus, a. quash the Order bearing 2009-10 dated 18.02.2013 No. F. No.Add l.ClT/CR-3/AACCS8639O/1 42(2Ay t] b. direct the Respondent No.2 Assessing Officer not to take any further steps in the assessment proceedings for the AY 2009-10 pending the resolution of WP No. 23255 of 2011 pending before the Hon'ble High Court of Andhra Pradesh. c. call for the records of the Respondent No.1 l.A. NO: 1 OF 2013(WPMP. NO:120s0 0F 2013) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of operation of the impugned Order dated 18.02.2013 passed by the 2nd Respondent during the pendency of this Writ Petition. l.A. NO: 2OF 2013(WPMP. NO: 120sl oF 2013) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to restrain the Respondent No. 2 Assessing Officer from taking any further steps in the assessment procedure for AY 2009-'10 pending the disposal of this Writ Petition. l.A. NO: 1OF 2014(WPMP. NO:46569 OF 2014) Between: 1. The Commissioner of lncome Tax (Central), Ayakar Bhavan, Basheerbagh, Hyderabad. 2. The Additional Commissioner of lncome Tax, Central Range-3, Ayakar Bhavan, Basheerbagh, Hyderabad. AND ...PETITIONERS 1. M/s. Satyam Computer Services Limited, (a Company incorp-o-rated under the provisioris of Conipanies Act, 1956), having its registered office at Mahindra Satyam lnfocitv, Unit 12, Plot 35/36, Hi-Tech City Layout, Survey No.64' Madhapur, Hyd-erabad, rep. by its Assistant Vice President 2. Union of lndia, Ministry of Finance, Department of Revenue, New Delhi' Represented by its Secretary .,.RESPONDENTS 18 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to modify the order dated 02-04-2013 in W.P.M.P.No.12O51 ot 2013 in W.P. No. 9667 of 20'13. Counsel for the Petitioner: SRI ARVIND DATAR, SRI JEHANGIR MISTRI & SRI K. VIVEK REDDY, SENIOR COUNSEL FOR SRI K. PRATIK REDDY Counsel for the Respondents No.1 & 2: SRI J.V. PRASAD, SENIOR S.C. FOR INCOME TAX M/s. B. SAPNA REDDY, SRI A. RAMA KRISHNA REDDY AND SRI AJAY KUMAR KULKARNI FOR SRI B. NARASIMHA SHARMA, ADDITIONAL SOLICITOR GENERAL OF INDIA Counsel forthe Respondent No.3: SRI cADl PRAVEEN KUMAR, DEPUTY SOLICITOR GENERAL OF INDIA The Court made the following: COMMON ORDER Page 4 of 68 PSK,J & NTR,J et? 23253 20 1l&batch THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI Writ Petition No.23255 of 2OlL; Writ Petition No.17518 of2011; Writ Petition No.39O6 of 2Ol2 & Writ Petition No.9667 of 2O13 COMMON ORDER: (Per the Hon'ble Sri Justice P. Sam KoshV) Since the issue in the present writ petitions is one and the same, they are being disposed of by this Common Order. 2. Heard Mr. Arvind Datar, Mr. Jehangir Mistri and Mr. Vivek Reddy, learned Senior Counsels appearing on behalf of Mr. K.Pratik Reddy and Cuddapah Nanda Gopal, learned counsel for the petitioners; Mr. B.Narasimha Sharma, learned Additional Solicitor General of India, assisted by Ms. Bokaro Sapna Reddy, Mr. A'Rama Krishna Reddy, and Mr. Ajay Kumar Kulkarni, learned counsel for the respondents. 3. These are six Writ Petitions filed by the same assessee, the lead case being Writ Petition No.23255 of 2011 whereby the primary challenge is to the order dated 1.1.o7.2OI1 passed by respondent No.1 rejecting the application seeking permission for assessment of rea'l and actual income after condoning the delay under Section 119 of the Writ Petition No.17526 of 2O11: lVrit Petition No.19622 of 20111 Page 5 of 68 PSK,J & NTR,J wp_ 23255_2O 11&batch Income Tax Act, 196 1 and the relief sought for was consequential direction to the Income Tax Department. 4. Writ Petition No.17518 of 2011, Writ Petition No.17526 of 2Ol1 and Writ Petition No.9667 of 2013 are Writ Petitions challenging the appointment of special auditor on terms which specifically included the verification of fictitious sales and income from the terms of reference for three assessment years i.e. Assessment Year 2OO2-O3, Assessment Year 2007-O8 and Assessment Yea-r 2OO9-10. Writ Petition No.16722 of 2O 1 I is a Writ Petition challenging the proceedings under Section 147 seeking to reopen the assessment of the petitioner for the Assessment Year 2OO2-O3 and adopting the stald of reassessment proceedings were only to reexamine the claims of cleduction under Section 1OA while ignoring existence of fictitious sales included in the petitioner's assessed income for the Assessment Year 2O02-03. S. Lastly, Writ Petition No.3906 of 2Ol2 is a Writ petition challenging the provisional attachment order dated 30.01.2012 und.er section 2818 of the Income Tax Act. By efflux of time, the rigor of the order of provisional attachment does not survive any further. As such, the order of provisiona-l attachment does not survive any longer and hence the said writ Petition i.e. writ petition No.39o6 of 2012 has literally become infructuous. vt- I Page 6 of 58 PSK,J & N'TR,J srp 23255 2O1l&batch 6. So far as the other four Writ Petitions are concerned' i'e' Writ Petition No.17518 of 2011, Writ Petition No'17526 of 2011' Writ Petition No.9667 of 2OI3 and Writ Petition No'19622 of 2Oll are concerned,ifthemainWritPetitioni'e'WritPetitionNo'23255of2011 which in this batch has been taken up as the lead case stands decided in favour of the petitioner, there would not be a necessity for deciding the aloresaid four writ Petitions and as a consequence those writ Petitions also would stand disposed of' 7. For convenience, the facts in Writ Petition No'23255 of 2011 are discussed hereunder. 8. Writ Petition No.23255 of 2Ol1 is filed by the petitioner under Article 226 of the Constitution of India praying the Court for the following reliefs, viz., (i) to quash the order dated 11'O7 '2022 bearing No.295l1/2009-IT(INV'I)(Part), passed by the respondent No.1 as arbitrar5r, illegat, violative of Section 119 of the Income Tax Act, 1961 and Articles la, 19(1)(9)' 265 and 3OO-A of the Constitution of India; (ii) to declare the Assessment Orders for the Assessment Year 2003-04 to essesirient Year 2006-07 as illegal' void' ab Page 7 of 68 PSK,J & NT&J wp 23255_20l l&batch initio, and violative of Article 265 of the Constitution of India; (iii) to direct the respondent No.1 / respondent No.3 to re- qualtifv / re-compute the income by conducting a fresh and proper assessment for the Assessment Year 2003-04 to Assessment Year 2008-09 read together based on the revised financial statements of petitioner for the year ending 3l\"t March, 2009 wherein the irregularities in the financial statements pertaining to Assessment Year 2OO3- 04 to Assessment Year 2OO8-09 have been duly adjusted as prior period adjustments; (iv) to permit the petitioner to file revised returns for the Assessment Year 2OO7 -O8 and Assessment Year 2008-09 based on the audited financial statements for the said years read together with the audited financial statements for the year ending 3l't March, 20O9 prepared pursuant to the orders of the Company Law Board and thereaJter conduct a proper assessment excluding the fictitious sales and fictitious interest income; ,1 Page 8 of 68 PSK,J & NTR,J sp-23255-2O11&batch (v) to declare the revised auditpd fi11apcial gtatements of the petitioner which have been approved by the shareholders for the year ended March, 31, 2OO9' wherein the irregularities in the past financial statements have been rectifled as prior period adjustments, be the basis of conducting assessment proceedings and any other proceeding under the Income Tax Act' 196l for the Assessment Year 2003-04 to Assessment Year 2OO8-09; (vi) to direct the respondents not to proceed with recovery of tax till the income is computed / recomputed pursuant to the reliefs sought in (ii), (iii) and (iv) above; (vii) to declare the Assessment Orders for the Assessment Year 2OO2-O3toAssessmentYear2006-0Tasillegal'void'o;b initio, and violative of Article 265 of the Constitution of India; (viii) to declare the Draft Assessment Order passed by the respondent No.3 for the Assessment Year 2002-03 dated 18.08.2011 as illegal, void, ab initio' ard violative of Article 265 of the Constitution of India;-'-'' Paee 9 of 58 PSIK,J & ITT&J ep_23255_2011&batch (ix) to declare the returns filed by the petitioner for the Assessment Years 2OO2-03 as illegal, vitiated by fraud and uoid ab initio and no reliance can be placed on the said assessment proceedings; and (x) to direct the respondent No.1 / respondent No.3 to re- quantify / re-compute the income by conducting a fresh and proper assessment for the Assessment Year 2OO2-O3 based on the report of the Forensic Accountant dated 25.rr.2016. 9. It has been pleaded that the petitioner Satyam Computer Services Limited, was an Indian Information Technologr (lT) serr.ices Company headquartered in Hyderabad. Initially incorporated in the year 1987 and converted from Private Ltd. to public Ltd. On 16.06.2Ol1 with its main objective of business in software consultancy, design and programming of electronic information systems etc., it came out with IpO in 1992. The petitioner Company has brought a-n IT revolution in India and grew to earn revenues of over $2 Billion by 2008, employing 52,OOO IT professionals worldwide. Unfortunately, it became embrofled in India's biggest corporate scandal in Januar5r, 2OO9 when its founder, Mr. Byrr4ju Ramalinga Raju, admitted to falsifyin/corporate accounts and confessed to Page 10 of 68 PSK,J & NTR,J wp 23255-2O 11&batch forging sa-les and interest income repo*-:- amount to. Rs'S'O4O crores' teading to collapse in stock prices' The said confession was made by the petitioner Company on O7.01'2009 and on the same day the Government of India (for short, 'the GOI) intervened by filing a petition before the Company Law Board (for short, 'the CLB) to suspend the existing Board and take over the company's a-ffairs' The intervention by the Government was aimed to protect the interests of over 53'OOO employees and nearly 3 lakh shareholders, and also to protect the reputation of India's I.T. and corporate sector which had been severely tarnished by the scandal. 10.Videorderdatedo9.01.2oo9;theCLBapprovedthe Government's application and suspended the existing Board' and appointed six eminent persons as Government of India's nominees on the Board. Since then, the GOI actively managed the company from 09.01.2009 to 16.04.2009. 11. On 17.02.2009, in the light of petitioner Company's severe financial distress, the GOI frled an application seeking induction of a strategic investor into Satyam ' In that context' the GOI raised a 600 crore loan to alleviate the company's fina-ncial hardship' Thereafter' on 19.02.009, the cLB permitted the GoI to conduct a bidding process Page 11 of 68 PSIU & IYTR,J , wp 23255_2O11&batch under the supervision of a former retired Chief Justice of India to induct strategic investors to run the company's operations. L2. With the intervention of the GOI, and the subsequent orders passed by the CLB, a retired Chief Justice of India, viz., Justice S.P. Bharucha oversaw the bidding process and M/s. Tech Mahindra was inducted into the petitioner Company as the successful bidder and major sha-reholder of the petitioner Company. On 16.04.2009, the CLB directed the successful bidder to infuse an amount of Rs.2,9O8 crores into the petitioner Company through share capital and loans. The CLB also extended the time to file returns / documents with various statutory authorities till 31.12.2009 and directed that no State or Central Government agencies should initiate any Civil, Criminal, Punitive or coercive actions against the petitioner Company. 13. Thereafter, M/s.Tech Mahindra participated in a competitive bidding process and offered to pay a share price of Rs.58/- which was approved by a retired Chief Justice of India and the CLB. The price paid by M/s. Tech Mahindra had no bearing on the subject matter of these petitions. Subsequently, the petitioner Company filed an application before the cLB requesting an additional time for preparation of financial statements and submission before the appropriate authorities. This included requests for compliance under .-' / Page 12 of 68 PSK,J & NTR,J wp 23255-2O11&batch the Indian Companies Act and all other applicable laws' including taxationlaws.TheGolfrleditsresponseandstatedthatithadno objection to these requests. 14. Taking into account the GOI affidavit, the CLB allowed the application by extending the time of filing balance sheet' Profit & Loss Accountandanylilingrequiredunderotherapplicablelaws,including taxation laws, to a date within thirty (30) days from the date of the Annual General Meeting. 15. In the aftermath of the GOI's intervention and the CLB orders' various governmental agencies, including the Central Bureau of Investigation (CBD, Serious Fraud Investigation Office (SFIO)' Securities and Exchange Board of India (SEBI)' Enforcement Directorate (ED), Income Tax Department and Reserve Bank of India were assembled to investigate into the fraud perpetrated by the former management of the petitioner Company' The lindings arrived at by thesaidagenciescorroboratedthefraudulentactivitiesoftheformer Chairman and Man,glng Director of the petitioner Company' viz'' Mr. Byrraju Ramalinga Raju, who was held responsible for causing signifrcant financial loss to the company' The reports also emphasized that the Board of ttre petitioner Company was not aware of the true financial condition of the company' Page 13 of 58 PS&J & r{T&J l,p_ 23255-2O I l&batcb 16. On 20.09.2O09, the CBI has filed a charge-sheet against Mr. Byrraju Ramalinga Raju, the key accused in the Sat5ram case, framing various charges under various sections of the Indian Pena_l Code (lPC) including under Section 120-8 r/w Section 409, Section 420, Section 467, Section 468, Section 471 a;,ld Section 477-A of the IPC. L7. On 26.10.2010, the Hon'ble Supreme Court had reversed the decision of the High Court of Andhra Pradesh to grant bail to the accused and directing the accused to surrender by 10.11.2010. The Hon'ble Supreme Court further directed the Trial Court to conduct trial on a day-to-day basis and conclude itby 31.07.2011; arrd if the trial is not concluded, the accused were allowed to file an application for bail. It further stated that the Trial Court should remain uninfluenced by any observations made by either the High Court or the Supreme Court. 18. A Special court was constituted pursuant to a direction issued on administrative side to hear the cBI charge-sheet. The Hon,ble Supreme court directed that the learned Judge hearing the cBI case in the Satyam scam shall not be transfered till the trial is concluded and trial shall be conducted on day-to-day basis. Page 14 of 68 PSK,J & NTR,J wp-23255 2()11&batch 19. The CBI frled three reports before -the Special Court and the gist of the report as per the cBI was : (i) the promoters dishonestly creditedadditiona-ltaxliabilitiesandmadetaxpaymentsonfictitious income and further made the company, i'e', Satyam, suffer a loss to the tune of {. 126 crores which went detrimental to the interest of the company;and(ii)theCBlalsoinitsreportheldthattheremaining members of the Board were not aware of the true financial condition of the company. 2C,. Based on the evidence that was brought before the Special Court hearing the CBI case after this six year long trial, the CBI Court found that : (i) the Company become a victim of fraud; (ii) the Board was not aware of the true financial status of the company; (iii) based on inflated and non-existent profits the Board was made to sign fraudulent returns which 1ed to payment of extra / higher tax; (iv) the court found the former chairman and Managing Director, Mr. B' Ramalinga Raju, to be the person who has committed criminal breach of trust with the Company; and (v) the former Chairman and Managing Director in fact was responsible for making dishonest tax payment on fictitious income and disabled the company from raising its lawful claim for refunds amounting to 1'126'57 crores' I Page 15 of 68 PSK,J & NTR,J wp 23255 2o1l&batch 21. Meanwhile, the Serious Fraud Investigation Office (for short, 'SFIOJ conducted an elaborate investigation into the a-ffairs of M/s. Satyam Computers. In the course of the investigation, the SFIO found that : (i) because of the action of the accused Mr. B. Ramalinga Raju, the companv had to pay excess tax and in the process he has caused loss to the company to the tune of <. 186.91 crores; and (ii) the SFIO reiterated that it was not aware of the true financial status of the company. 22. There was yet another criminal prosecution initiated at the behest of Enforcement Directorate (for short, 'ED). The ED initially issued provisional attachment order attaching the fixed deposits of the petitioner Company to the tune of 1.822 crores. The provisional attachment order was challenged before this High Court by way of WPMP.No.47572 of 2Ol2 in Writ Petition No.37487 of 2Ol2 to grant stay of the impugned Provisional Attachment Order, v2., PAO No.4/2012 dated 18.10.2012 in E,ClRlOlIHZO/2009 issued by respondent No.1 and all consequential proceedings during the pendency of the said Writ Petition. Vide order dated ll.l2.2Ol2, the learned Single Judge granted stay of the above impugned provisional Attachment Order. ' rt,:r. ). t.a.n ..: .. Page 16 of 68 PSK,J & NTR,J wp 23255-2O11&batch 23,. Thereafter, the ED challenged the order of the learned Single Judge by way of Writ Appeal No.133 of 2013 under Clause 15 of the Letters Patent, aggrieved by the order of the learned Single Judge' dated 11.12.2012, passed in W.P.M.P'No'47572 of 2Ol2 in Writ petition No.37487 of 2012. However, the Division Bench of this court, uide order dated 31.12.2014, dismissed the said writ appeal' In the course of deciding the same, the Division Bench held as was decided in the earlier set of litigations referred to in the preceding paragraphs, highlights of which are as follows : (i) the petitioner-Company' in spite of the clear evidence of the income being highly inflated and the Company being a victim of fraud, was made to pay dividends when the petitionerCompany\"Satyam\"wasinfactincurringsubstantialloss, and this resulted in al extra tax burden of <'39'86 crores for the Financial Year 2OO7 -O8 alone; (ii) the petitioner Company was made to pay income tax on inflated and non-existent profit and aiso on fictitiousincometothetuneof<.126.57crores;(iii)thebenefitsof illegat flow of funds went into the coffers of the Income Tax Department as a result of the illegal excess payment of tax based on fictitious and non-existent income; (iv) the Division Bench also went to the extent of holding that these excess pa1rments of receipt of tax by the Income Tax Department should actually be treated as proceeds of I Page 17 of 68 PSK,J & NTR,J wp 23255_2O11&batch crime as the accused promoters not only got enrolled themselves but also shared the gains with the Income Tax Department; (v) that for the period between 2OO2 03 to 2008-09, the petitioner Company was made to pay 1. 166.80 crores towards dividends whereas the division of dividends itself for the said period was totally illegal; and (vi) the Division Bench further observed that the payments made to the Income Tax Dcpartment indicated that the petitioner Company became the victim of fraud and was actually made to believe. 24. The aforesaid judgment of the Division Bench in Writ Appeal No.133 of 2013. dated 31.12.2014, was subjected to challenge by the ED before the Honble Supreme Court uide S.L.P.(Criminal) Diary No.30975 of 20 19. After due consideration of the entire factual matrix of the case, the Hon'ble Supreme Court dismissed the said S.L.P. preferred by the ED and affirmed the judgment of the Division Bench, dated 3 1 . 12 .2O L4 , pzrssed in Writ Appeal No. I 33 of 20 13. 25. Later, the ED again filed a criminal complaint against the petitioner company before the XXI Additional chief Metropolitan Magistrate-cum-Special Sessions Judge, Hyderabad under Section 3 of the Prevention of Money Laundering Act, 2oo2 and the said court took cognizance ol the case uide Sessions case No.l of 2014, decided on 25.04.201 4. Aggrieved, the petitioner Company chaJlenged the ./ ':,. Page 18 of 68 PSK,J & I{TR,J wp 23255 2o1l&batch proceedings of the Sessions Court by filing Writ Petition No'17525 of 2014 before this Court- Vide ordet dated 22'12'2014 passed in Writ PetitionNo.lT525of2Ol4,aSingleJudgeofthisCourtallowedthe said writ petition and quashed the criminal complaint lodged before the above Sessions Court. While allowing the said Writ Petition' the learnedSingleJudgehasinverycleartermsheldthat:(i)itwasthe Government of India which had keenly and actively intervened ensuring revival of the petitioner-company; (ii) the petitioner Company hadnoknowledgeoftheallegedmoneylaunderingactivitiesnorwas the petitioner Company involved in the commission of the offence either directly or indirectly; (iii) the petitioner Company was a successorcompany,andhavingsucceededafterparticipatingina transpa-rent tender proceedings and the tender proceedings being supervised by none other than by one of the retired Chief Justice of India, that too much after the commission of the alleged offence; and (iv) since the petitioner was a successor company it could not have been fastened with greater liability or for that matter could not have been prosecuted for any illegalities committed by the persons who were at the helm of affairs of petitioner Company at the time of commission of the offence. Page 19 of 58 PSK,J & NTR,J wp 23255 2oll&bateh 26. The learned Single Judge went on to hold that for the offences committed by the person at the helm of allairs of the petitioner Company at the relevant point of time cannot be saddled upon or attributed upon to the petitioner-company. However, the order of the learned Single Judge in Writ Petition No.17525 of 2014, dated 22.12.2014, was subjected to challenge before the Honble Supreme Court uid.e S.L.P.(Criminal) No.34143 of 2OI7. 27. The Hon'ble Supreme Court uid\"e order dated 08.12.2017 dismissed the said S.L.P. validating the order passed by the learned Single Judge in Writ Petition No.17525 of 2014, dated 22.12.2014, insofar as quashing of the complaint lodged under Prevention of Money Laundering Act, 2OO2 is concerned. Meanwhile, the SFIO liled a criminal complaint before the Special Economic Offences, viz., C.C.Nos.394 and 400 of 2OOt9 on the file of the learned Special Judge for Economic Offences, Hyderabad : C.C.No.394 of 2O09 was registered for violation of provisions of Section 309 of the Companies Act, 1956 (for short the ActJ i.e., failure of respondent No.1 Company to obtain the opinion of the Central Government before pa;rment of remuneration to one of its Directors. C.C.No.4OO of 2009 was registered for violation of provisions of Section 220(1) read with Section 162 of the Act, alleging violation of Secfof 309 of the Page 20 of 68 PSK,J & I{TR,J trp-23255-2O11&batch Companies Act, 2013. In due course of time' the matter travelled to the High Court which in turn remitted the matter to the Company Law Board (for short, 'the CLBJ for fresh reconsideration highlighting the fact that the company has already been found to be a victim of fraud and that too it was played by the previous management' ald not by the petitioner. After remand, the Company Law Board' Clnenr.at\" uide order dated 16.10.2012, in Company Application Nos'233 and 234l62LAlCB/2O|O, allowed the application fiIed by the petitioner Company for compounding of the offence' Thereafter' aggrieved by the said order, the SFIO subjected the above order to challenge before the High Court by way of hling Company Appeal Nos'4 and 5 of 2Ol4' Vide order dated 23'O6.2014 in Company Appeal Nos'4 and 5 of 2Ol4' a learned Single Judge of this Court dismissed the said appeals holdingthat..\"Itulould.thereforebetlllwltginequitabletosubjectthe reuamped comqanA to need-less criminal prosecutions u-then it has gracefutlg d.ecided to put a quietus to the ueing problem of prosecution' It uould be a trauesty of justice, if the Compang' afier its reuamp is subj e cte d to P ers e cution.' 28. From the a-foresaid given factual matrix of the case' it stands settled by a series of decisions by the High Court under various provisions of law all of which have also been a-ffirmed by the Hon''ble Page 21 of 68 PSK,J & NT&J wp_23255 201l&batch Supreme Court confirming certain facts like financial embezzlement or fraud by the petitioner Company, which was primarily run by its then Chairman-cum-Managing Director, Mr. B. Rama-linga Raju, who was the key accused. It is also by now well accepted by all the Courts that Board of the petitioner Company was, in fact, riot made known of the actual financial status of the company. It also stood established and confrrmed by a series of judgments by the High Court that excess tax has been paid by M/s. Satyam Computer Services Limited based on non-existent profits shown in the returns filed by the said compzrny. It was also held in a series of litigation that it was the former Chairman ald Managing Director, viz., Mr. B. Ramalinga Raju, who had made dishonest tax payments based on fictitious income and disabled the company from raising its lawful claim of refunds. 29. Based on the said finding fact in a series of litigation by the Court with its approval by the Hon'ble Supreme Court, learned counsel for the petitioners contended that the stand of the Income Tax Department amounts to frustrating the concerted and extra-ordinar5r efforts made by the Government of India in the revival of the petitioner-company. It was also the contention of the leamed counsel for the petitioners that there is a series of finding of fact of there being fictitious income reflected in the return submitted by M/s. Satyam ./ Page 22 of 68 \",p-,\"rs$6'rf&i:*il Computers. yet, the Income Tax Department inexplicably seeks to deny the stand taken by the learned counsel for the petitioners insofar that excess tax has been paid. The Income Tax Department also, in spite of all these admitted factual matrix of the case, was denying deduction that M/s' Sat5ram computers was entitled to under Section 10(a) on its actual / real income. At the same time, the Income Tax Department also seeks fictitious income. to levy lncome tax on non_existent and 30. The Government of India (GOI) appointed Board of Satyam Computer Services Limited (the Company or SCSL), therefore sought the permission from the Company Law Board (CLB): i. An extension of the timeline from the CLB to prepare the financial statements for the Financial year 2O0g_O9, which wi, provide a true and fair view of the affairs of the company as on 3l.t March, 2009; ii. The impact of errors, omissions, irregularities and misstatements which are brought out by the Government appointed investigating agencies - CBI, SFIO arrd the forensic accountants (KPMG) appointed by the Government appointed Board to be reflected as \"Prior period Item\" as per applicable I Page 23 of 68 PSK,J & NTR,J wp-23255-2O11&batch standards in the accounts for the Financial Year accounting 2OO8-08; and 111 31. 2009 accol'l asa audit The accounts would be audited by Deloitte Haskin & Sales (Deloitte), the statutory auditors' and be presented to the Annual General Meeting for approval within an extended time' The cLB approved the company,s prayer (order in c'A'No'527 of and C.A.No'330 of 2009) and the Companv prepared the nts for the Financial Year 2OO8-09 reflecting the impact of fraud Prior Period ltem' The accounts were audited by Deloitte (the report , 'as dated 29ft September' 2010)' The shareholders adopted the audited accounts in the AGM held on 21\"t December' 2010. g2. As the Income Tax Act provides a year wise assessment of income, it wa.s considered prudent to compute the profit & loss accounts a;rd balance sheet for the Financial Year 2OOL-O2 to 2007-O8 year wise bv splitting \"prior period item\" and \"Opening Balance Difference' as reported in the audited accounts for the Financial Year 2008-09 based on the report of the forensic accountant' 33. The Company engaged B K Khare & Co., Chartered AccountantS who are Tax Auditors of Tech Mahindra Ltd. (which acquired SCSL) to ) Page 24 of 58 PSK,J & NTR,J wp-23255-2O11&batch perform 'Agreed Procedures\" (AUP) in accordance with the Stands on Related Services (SRS 4400) \"Engagements to Perform Agreed Upon Procedtrresregardingfinancialinformation\"issuedbythelnstituteof the Chartered Accountants of India' The AUP was carried out to provide corrected profit /loss and balance sheet for the Financial Year 2OO7-O2 to 2OO7-O8 as the audited accounts would have presented if the re-audit were to be allowed under the Companies Act (As stated earlier, the Companies Act 1956 did not contain a provision for re- audit. The provision was introduced in the Companies Act' 2013 w'e'f' ls April, 2016). g4. The procedure agreed to be followed, which is fully described in the AUP Reports, is briefly mentioned below: a) The Company started with the published financial statements audited by Price Waterhouse (PwC)' PwC had issued a letter stating that these accounts should not be relied upon after the discovery of accounts fraud. i. The company adjusted each item of the profit & loss account and the balance sheet based on the report of the forensic accountants for each of the above financial years' B K Khare & Co. checked the above procedure and issued ll reports for each of the yea-rs i.e. Financial Years 2OO|-O2 to 2007-oB 111. By followir-rg the procedures described above, SCSL computed revised Prolit & Loss ald Balance Sheet for the Financial Year 2OO1-02 to 2OO7-O8, mirroring the audited accounts if re-audit were possible. 35. The company has also obtained revised Form 56F certilicates giving the correct quantilication of deduction to be claimed under Section 10A/10AA of the Act. The certificates have been issued by BSR and Associates and BSR & Co., a reputed firm of Chartered Accountants. 36. All this would enable Income Tax Authorities to assess the correct income of SCSL - post adjustment of fictitious income, considering the revised deduction under Sectio n roA / Section loAA basis certificate evidencing genuine exports and granting credit for genuine FTC. 37' The petitioner company approached the GBDT to take into account the actuar income. The petitioner company submitted all the returns filed by the former management and thgztonsequent Page 25 of 68 PSK,J & NT&J sp,.23255-2O11&batch Paee 26 of 68 PSK,J & I'ITR,J wp-23255-2O11&batch assessment orders were based on the inflated income arld therefore were inter alia vitiated bY fraud' 38. onl0.03.2oll,theCBDTrefusedtograntreliefontheground that: a) The CBDT did not have jurisdiction to intervene once after an assessment attained frnality since there was no provision in the law to reoPen such assessments; b) Reconstruction of financials suffer from severe infirmities and the same cannot be relied upon to reach aly conclusion as to its real incomes for the relevant years; and c) The fate of criminal cases against the accused is yet to attain Iinality so as to hold them actually or vicariously liable for the affairs of the comPanY. 39. when the GBDT refused to grant the said relief, the petitioner approached the High Court of Andhra Pradesh by filing Writ Petition No.7718 of 2011 and subsequently the Honble Supreme Court' After taking into account the SFIO findings on the existence of fictitious income and in view of the peculiar facts and circumstances of the case, the Hon'ble Supreme Court directed the CBDT to consider the petitioner's case for re-quantification / re-assessment (Satyam Page 27 ot 68 PSK,J & NT&J ,/- wp 23255 2O1l&batch Computer Services Limited vs. Central Board of Direct Taxes and Othersl) 40. Pursuant to the aforesaid direction given by the Hon'ble Supreme Court, the petitioner Company approached the CBDT with yet another comprehensive petition seeking for invocation of the powers urder Section 119(1) of the Income Tax Act. Through the said petition, the petitioner Company had sought for re-scrutiny of the accounts or in other words, the re-quantification / re-computation of the incomes for the assessment years 2003-04 to 2OO8-O9 which also included the reopened assessment years. Such a request was made with an intention of correcting the fraudulent and fictitious income assessment made during all these periods and which stands established from the orders passed by various judicial and quasi- judicial authorities. 4L. It is these petitions which have been rejected uide the impugned order dated 11-o7.2ot1 by the GBDT which has led to filing of the main case i.e. writ Petition No.23255 of 2olr. The cBDT held that: a) For each assessment year, assessment / reassessment proceedings are pending before the AO. Therefore, the petitioner Company can agitate the issues before the AO. '120111 t5 supr\"r\" court cases 522 Page 28 of 68 PSK,J & NTR,J wp-23255-2O11&batch b)ThepowerunderSectionllgisnotavailabletothepetitioner; c) The relief under Section 119(2)(b) is also not available to the petitioner Company since it has not been proved by the Department or the CBI and ED that the petitioner Company has suffered genuine hardshiP; d) SFIO report cannot be relied upon; e) There is no conclusive evidence that can be drawn from the lorensic investigation report; and f) The criminal prosecution is pending' Therefore, the CBI reports calnot be relied uPon. 42.AfterrejectionoftheaforesaidpetitionunderSectionll9(1)of the Income Tax Act, the respondent authorities issued assessment ordersfortheyear2oo2-o3andassessmentyear2ooT-oS.Itisthese orderswhichwerechallengedinWritPetitionsuideWntPetition No. 1726 of 201'1 for the assessment year 2OO2-O3' Writ Petition No.lT568of2ollfortheassessmentyear2ooT.os,writPetition No.19622 of 2011 against the order of reopening of assessment for tlle assessment year 2OO2-O3 and Writ Petition No'3906 of 2011 against the order of attachment of assets for the assessment year 2OO2-O3 to 2008,09. Page 29 of 68 PSK,J & r{TR,J wp 23255_201l&batch 43. According to the petitioner Compaly, it had approached the CBDT to take a holistic view of the matter and ensure that the Income Tax department acted in concert with the other authorities of the Government of India and in accordalce with law. The reason why the petitioner Company had approached the CBDT was lor appropriate instructions, di rections as it may deem fir for the proper administration of th e Act and thereby direct the assessments (fraudulently obtained / made by virtue of assessing non-existent income) be corrected so as to ensure that only actual / real income of the petitioner Company be charged to tax in accordance with the lau, and the mandate of Article 265 of the Constitution of India. 44. The contention of the petitioner Company a_lso was that the requirement for re scrutiny or re-quantification was enabling the Tax Department to actually determine and fresh assessment be made considering the re-stated accounts prepared by B K Khare & Co. Chartered Accountants pursuant to the CLB order dated 16.10.2019 following \"Agreed Upon Procedures (AUp)\" in accordance with the \"Standards of Related Services (sRS 44oo)\". The concerned chartered Accountants hrm carried out the audit by providing corrected proht & Loss and Balance sheet for the assessment year 2oor-o2 to 2ooz-og. Page 30 of 68 PSK,J 66 NTR,J wp 23255-201l&batch 45. It was contended by the petitioner ttrat there is no evidence of fictitious income even though there was a finding of the SFIO to that effect at that time. It was further contended that until the criminal Court comes to a finding it could not accept the plea of fraud ' It was further contended that GBDT has in exercise of its jurisdiction rejected the report of SFIO as being \"far-fetched\" and aPart from this serious impropriety it is also impermissible for one Department of Government of India not to follow the report of another Department' 46. It was a-iso the contention of the petitioner that CBDT has erroneously stated that there was no evidence of fictitious income and this statement alone is sufficient to quash the order' When the Union of India took emergency steps to superside the Board the later appointed a retired Chief Justice to conduct the bid process and prayed for forensic and fresh audit, the CBDT was in serious error in giving a finding that there was no bogus income' 47. It was the contention of the learned Senior Counsel for the petitioner that from the decisions that have been taken by the High Court referred to in the earlier paragraphs, it stalds undisputed so far as the existence of fraud which came to light on the letter issued by the former Chairman, Mr. Ramalinga Raju' It was also an undisputed fact that, on account of the inflated income the petitioner has suffered Page 31 of 68 PSK,J 6. I{T&J wp_23255 20ll&batch genuine hardship for the subsequent assessment yea_rs. The hardship grew because of denial of deductions on : (a) genuine export income; (b) foreigr tax credit; and (c) genuine expenditure which the company had made and incurred during regula-r course of business during the said period of time when inflated incomes were'Shown in the books of account. 48. It was also the contention of the learned Senior Counsel for the petitioner that once vvhen the aforesaid facts stood undisputed or goes un-denied, the petitioner Company becomes a victim of fraud. The entire assessment made during the said period stands vitiated by fraud, and deductions on lictitious income and deductions on genuine income and genuine expenditure stood disallowed. 49. Another contention which the learned Senior Counsel for the petitioner harped upon was that on the very same set of facts for the Assessment Year 2OO9-10 and 2010-11, the Income Tax Department, taking into consideration the observations of the Company Law Board for the said assessment year permitted the petitioner to file revised returns with delay, and therefore, there was no reason whatsoever why the Income Tax Department shotrld reject the permission sought by the petitioner for revision of the assessment made for the previous period so as to present the actual returns. In fact, the Income Tax .,/ / Page 32.of 68 PSK,J & NTR,J wp-23255,2O1l&batch Department had acknowledged tlre genuine hardship suffered by the petitioner for the Assessment period 2O09- l O and 20I 0- I I and invoked the provisions of Section II9(2) of the Incorne Tax Act. 50. Learned Senior Counsel appearing on behalf of the petitioner strongly contended that the fact that the Income Tax Department accepts the hardship suffered by the petitioner for the Assessment Years 2OO9-10 and 2OlO-11 and at the same time refused to accept the same contention for the earlier period is nothing but an arbitrary act on the part of the Income Tax Department and also reflects that the Income Tax Department has taken a selective cognizalce of the fraud. According to the learned counsel for the petitioner, the issue of existence of lictitious income has by now been accepted in a series of litigation under the various statutes both under civil law jurisdiction as also under the Criminal law jurisdiction; and even then the Income Tax Department refuses to accept the application Iiled by the petitioner under Section 119(2) of the Income Tax Act. It was the further contention of the learned Senior counsel for.the petitioner that the grounds which have been relied upon by the Income Tax Department do not have force to sustain, as all the cases which were initiated against the petitioner subsequent to the letter dated 07.OI.2OO9 addressed by the Ex-Chairman, Mr. Rarnalinga Raju, were l i. I t. Page 33 of 68 PSK,J & ITITR,J wp 23255-2011&batch all decided in favour of the petitioner Company holding them to be not responsible for any of the allegations, charges and contentions leveled against them. Hence, in the light of the cases getting dropped, it stands proved and admitted so far as the fictitious income and the statement of account all at the hands of the erstwhile Chairman of the petitioner-CompanJr, who himself was to be blamed for all the illegalities and which simultaneously proves that the petitioner Compaly was paying income tax for a considerable period till now on fictitious and non-existing income. According to the learned Senior Counsel appearing for the petitioner, it was on these set of facts that they have moved a petition before the respondent-Authorities for re- assessment of their income based upon the actual business tralsactions that have transpired during the relevant point of time. 51. According to the learned Senior Counsel appearing for the petitioner, it was only with an intention of putting the records straight in respect of the actual income tax expenditure of the company during the relevant assessment years rather than fictitious income, expenditure and the tax paid on the said fictitious income and expenditure. According to him, they are more concerned about the actual returns being rectified based on the actual business transactions and that they are not very particular about refund of any --'-t / r) i Page 34 of 68 PSX,J & NTR'J wp 23255-2O 11&batch excess income tax that they have paid on the fictitious income and expenditure that stood reflected in the statement of accounts and on which the income tax was Paid. 5,2. per contra, the learned Additional solicitor-General, appearing for the Income Tax Department, contended that when petitioner has filed the application under Section 119 of the Income Tax Act before the Central Board of Direct Tax (C'B'D'T') there were lot of proceedings pending consideration before different Forums including cases initiated by the Central Bureau of Investigation (C'B'I')' Enforcement Directorate (E.D.), etc. Therefore, in the teeth of pending proceedings, it was not possible for the Income Tax Department to have accepted the application of petitioner' He further contended that allowing the prayer made by the petitioner under Section 119 would amount to digging up otd graves and in the process unsettle a1l that is settled. It was also his contention that even otherwise, the relief sought for by the petitioner was not firstly permissible nor does Section 119 of the Income Tax Act provide for such a power upon the Income Tax authorities or the C.B.D.T., in particular' It was also the contention of the learned Additional Solicitor General, appearing for the respondents, that the application of the petitioner for reassessment of the Income Tax returns of the company could not be Page 35 of 68 PSK,J & NTR,J wp_23255_2O11&batch permitted at that point of time for the reason that a petition filed under Section 26apl to the Commissioner for the Assessment Years 2OO3-O4 to 2006-07 stood rejected on 22.07.2010 against which the petitioner Company has rightly preferred an appeal and pending the appeal, the prayer sought for by the petition-br for re'v'ising of the returns was not permissible. 53. The learned Additional Solicitor General further referred to the ea-rlier stand of the petitioner Company while re-opening the Assessment for the year 2OO2-O3 onwards where the petitioner Company has taken a stand requesting the Income Tax Department to treat the return earlier frled for the respective years as valid rettrrns for re-assessment, and after taking such a stand the petitioner Company could not have repeated the prayer for a further re-assessment. 54. The learned Additional Solicitor-General referred to proviso to Clause (1) of Section 119 of the Income Tax Act contending that the proviso itself does not permit the C.B.D.T. to issue instructions requiring the Income Tax authority to act in a particular manner so far as assessment is concerned. In the teeth of the said proviso, according to the learned Additional Solicitor-General, the Income Tax Department was justified in rejecting the prayer of the petitioner_ Company, more particularly, when the applications and requests are */ ./ Page 36 of 68 PSK,J & TR'J wp 23255-20 ll&batch made at an inordinately belated stage by which time the accounts submittedbythepetitionerCompanyhaveattained{inalitybyeffluxof time. He, however, submitted that realizing the genuine hardship that the petitioner Company was put to; their claims for the Assessment Years 2009-10 and 2OlO-11 have been accepted' However' for the period for which there was no strong, cogent reasons available with them, the Income Tax Department could not have permitted the request so made. 55. The learned Additionat Solicitor ' General contended that the claims raised by the petitioner of the assessment orders being vitiated by fraud is factually and illegally incorrect and is also in contravention tothemateria]onrecord.AccordingtothelearnedAdditionalSolicitor General, the term \"fraud\" has been distinctly defined under the provisions of the Indian Penal Code, 1860, and the ingredients required to make out a case of fraud is missing from the pleadings' According to the learned Additional Solicitor General' the case of the petitioner is only in respect of inflated hgures of fictitious income as is reflected from the letter dated 07 'OI'2OO} issued by the then Chairmal, Mr. Ramalinga Raju. 56. It was contended by the learned Additional Solicitor General that the petitioner company had taken over the company by ptrtipipating I I I l Page 37 of 68 PSK,J &, r{T&J ,'-, wp-23255_2O11&batch in the bid knowing fully well all the contents of the letter of the then Chairman of M/s. Satyam Computer Seryices Limited and when they had participated in the bid were declared successful they were conscious of the consequences that they were likely to face, and therefore, the contention of the petitioner of they being sufferer of unprecedented fraud in the course of taking over the petitioner Company is totaJly incorrect. 57. The learned Additional Solicitor General reiterated the contention of the claim of the petitioner to declare the assessment orders which has by efflux of time attained finality as null and void to be impermissible under the Income Tax Act and further submitted that such a relief as sought for could not had been granted by the GBDT as it is beyond its scope and powers. The learned Additional solicitor General also submitted the prayer of the petitioner to recail the assessment orders and to condone the delay in the course of passing of the recalling order ald further prayer of the petitioner to permit them to file revised return are all beyond the scope of the statute i.e. the lncome Tax Act, particularly when each of these reliefs sought for are specificarly governed by specified provisions under the Income Tax law and it does not permit for granting such a relief at this s ''g # Page 38 of 68 belated stage. Moreover, there is no provisron assessment orders under the Income Tax Act' PSK,J & NTR,J sp-23255-2O11&batch for recalling of the 58. According to the learned Additional Solicitor General' the provisions for submission of revised return is one which is envisaged under Section 139(5) of the lncome Tax Act and it provides for the specific provisions in respect of the same and no such case has been made out bY the Petitioner. 59. It was also the contention of the learned Additional Solicitor General that for certain assessment years the Assessing Officer has already initiated proceedings under Section 154 and orders have also been passed which are subject matter of appeal f-tled on behalf of the petitioner and therefore no such direction can be sought by the petitioner, nor can such a relief be granted by the CBDT' According the learned Additional Solicitor General, the revision of the assessment order by a Commissioner is permissible strictly in accordance with the provisions of Section 264 whlidn is itself a self- contained provision and the CBDT as such does not have the power to issueanysuchdirectionfortheCommissionereitheroffactsoron lart'. I Page 39 of 68 PSK,J & I{TR,J wp,23255 20 11&batch 60. Relying upon the entire submissions made, it was summed-up by the learned Additional Solicitor General that the entire claim of the petitioner under no stretch of imagrnation can be brought within the purview of a direction which could be issued for proper administration of the statute. Further, it was also contended that the prayers raised by the petitioner also is specifrcally barred or is prohibited to be issued considering the twin conditions as is reflected in the proviso to Section 119(1) of the Income Tax Act. 61. Thus, for all the aforesaid submissions, the learned Additional Solicitor General prayed for dismissa-l of these writ petitions. 62. Upon hearing the Counsel representing the petitioner Company in all these bunch of writ petitions and also considering the contentions put forth by the learned Additional Solicitor General on behalf of the respondents, the entire factual matrix as has been narrated by the petitioner is 1) in respect of the financiat position of M/s. Satyam Computer Services Limited is not in dispute so far as the entit'e controversy starting from the open letter that was issued by the then Chairman Mr. Ramalinga Raju 2) in respect of inflated and fictitious figures reflected in the books of accounts showing fictitious sales and income and interest income 3) in respect of the Gonqpany having paid income tax on this inflated figures based upon the Page 40 of 68 PSK,J & NTR,J wp 23255 2Oll&batch fictitious sales and interest income 4) in respect of the prosecution initiated against the petitioner Company having been quashed by the High Court under more than a couple of jurisdictions, all of which have already been reflected in the preceding paragraphs 5) in respect of tl-e Income Tax Department permitting' the submission of the revised return for the assessment year 2009- 10 and 2O 10- 1 1 ' 63. Based upon these admitted factual matrix, the points for consideration in these bunch of writ petitions would be:- lf Whether the respondents were justified in rejecting the application put forth by the petitioner before the CBDT under Section 119(1) of the Income Tax Act? 2) Whether such relief as has been sought by the petitioner can be granted invoking the extraordinary writ jurisdiction conferred upon the High Court under Articl e 226 of the Constitution of India? 64. Before referring to the various judicial precedents in the course of testing the veracity of the order passed by CBDT dated 1l'O7 '2O1'l' it would be relevant to refer to the provision of Section 119(2)(b) of the Page 41 of 68 PSiK,J & NTR,J wp 23255 _2o1l&batch Income Tax Act, 1961. For ready reference. the same is reproduced herein under, viz., \"(2) Without prejudice to tlrc generalitg of the foregoing pouer,- (a) ...... ..... . . (b) the Board mag, if it ansiders it necessary or expedient so to do, for the purpose of proper and elficient management of the utork of assessment and coll-ection of reuenue, issue, from time to time (utlrcther bg utag of relaxation of ang of the proui.sions of sectian_s tlsP, i75S, 115WD, 115W8, 115WF, 115WG, llswH, 115WJ, 115WK, 139, 143, 144, 147, 148, 154, 155, 158BFA, sub-section (1A) of section 2O1, sections 21O, 211, 2344, 2348, 234C, 234D, 95[234F,] 27OA, 271, 271C, 271CA (and 273 or oth.erttise), general or speciaL orders in respect of ang class of incomes or finge benefits or class of cases, setting forth directtons or instructions (not beirry prejudicial to assessees./ as to the guidelines, pinciples or procedures to be folloued bg other income-tax authorities in the utork relating ,o assessment or collection of reuenue or the initiation of proceedings for the imposition of penalties and any such order mag, if tlrc Board is of opinion that it is necessary in the public interest so to do, be publi\"shed ttnd circulated in tle prescribed manner for general infonnation:\" 65. The Honble Supreme Court in the recent past dealing with the powers vested upon the CBDT has laid down certain judicial precedents, which are as under, viz., 65.1 In the case of State of Kerala and Others vs. kurian Abraham (P) Ltd. and another2, the Hon'ble Supreme Court held in paragraph Nos.23 and 25 as under, d2., 'l(20081 Supreme Court Cases 582 Page 42 of 58 PSK,J & NTR,J wp-23255 201l&batch '23. Policy deci,sions hnue to be taken bg tLe Gouernmert' Howeuer, tLLe Gouernment has to taork through its senior ofrtcers in the matter of dilfrcutties which the business mng face' particularlg in matters of tax administration' TLrat i-s uhere the -role of the Board of Reuente comes into plog' The said Board takes administratiue decisions, which includes the authority to grant adminbtratiue reliefs. T-lli-s is the underlying reason for \"mpo*eing tle Board to issue orders, instructions and directions to the officers under it. 25. One more aspect needs to be mentioned' Proui-sions of Section 3(1-A) are similar to the prouisions of Section 119(1) of the Iname Tox Act, 1961 (tle 1961 Act) inasmuch as both the section's haue used the expression \"for tlrc proper ad'mini'strotion of this Act\" ' According to l,atD of Income Tax bg Kanga and Palkhiuola' the Board i.s entrusted utith the pou-rcr to giue effect to the proui-sions of the Act and. to prouide \"fair and just administration\" in the matter of imposition and collection of tax' This is where it becomes the tncttmbent dutg of the Board to grant odmini'stratiue relief in appropriate coses. In such exercise, incidentallg the Board hns to cnnsider the eJfect of tlrc items enumerated in the entry ' Therefore, it is not open to the State Gouenrment to contend that the Board in thi.s case had entered into an area uthich is earmorked. for tle legi-slature/ exectttiue' In our uieut' the said ciranlar grants admini.stratiue relief to the business' It uas entitled to do so. Ttrcrefore, it cannot be said tlwt the Boord had acted begond its authonty in issuirLg the said ciranlar' One more reasonneedstobestated.Wheneuersuchbindingcircularsare issued bg the Board granting ad'ministratiue relief(s) business atranges its affairs relying on such circulars' Tlerefore' as long as thi circular remains in force, it k not open to the subordinate officers to contend that tlrc ciranlar is erroneous and not binding on them-\" 65.2 The Hon'ble Supreme Court in the case of CorPoration Bank vs' saraswati Abharansata and Another3 held at paragraph Nos. 19 and 20 as under, viz., 3 (20091 1 Supreme court Cases 540 Page 43 of 58 PSK,J & l{T&J vp 23255 2Oll&batch '79. Article 265 of the Constitution of India maruTates that no tox. shall be leuied or collected except bg autlaitg of laut. In term.s of the said proubiory therefore, all acts relating to the imposition of tox prouiding, inter alia, for the point at uhich the tox i.s to be collected, the rate of tax as abo its reauery must be carried out stictlg in accordance uith lau. 20. If the substantiue prouision of a stadtte prouides for refund, the State ordinailg bg a subordinate legi\"slotion could not haue laid dotln that ttrc tax paid euen bg mistake uould not be refunded. If a tox has been paid in excess of the tox specified, saue ond except th.e cases inwluing tlte principle of \"unjust enichment\", excess tax reali.sed must be refunded. The State, furtLLermore b bound to act redsonablg tnuing regard to the equalitg clause contained in Article 14 of the Constitution of Indio.\" 65.3 A similar view was also taken ea_rlier in the case of Union of India and Aaother vs. Azadi Bachao Andolan and Another4 where a circular was issued by CBDT under Section 119 of the Income Tax Act, 196 1. It'*,as challenged inter alia on the ground that it was ultra uires the provisions of Section 19(1). The argument was rejected by the Supreme Court holding that: \"47- It urus contended successfully before the High Court tlnt the circtr lar is ultra uires th.e prouisions of Section 1 1 9 . Sub- section (1) of Section 119 is deliberatelg uorded.in a general manner so that CBDT is enabled to issue appropriate orders, instructions or directions to the subordinate authoities,o^s it mag dec:m fit for the proper administration of this Act'. As long as tLrc circulor emanates from CBDT and contains orders, instructions or directtot* pertaining to proper admini.stration of the Act, it is relatable to the source of pouer under Section 119 AIR 2OO4 SUPREME COURI 1107 Page 44 of 68 PSK,J & NTR'J wp 23255 20 1l&batch inespectiue of its nomenclature. Aport from sub-section (1)' sttb- section (2) of Section 119 also enablbs CBDT 'for the purpose of proper and efficient management of the tuork of assessmenl and collection of reuenue, fo issze appropiate orders, general or special, in respect of ang class of income or closs of cases, setting forth directions or instructions (not being prejudicial to th-e assessees) as to the guidelines, pinciptes or procedures .to' be follouLed bg other Income Tax AutLwities in the utork relating to @ssessment or allection of reuenue or the initiation of proceedings for tlrc imposition of penalties'' In our uieu, tle High Court.uas not justified in reoding the ciranlar as not amplying utith th.e proui'sions of Section 1 19' The circular falls uell utithin the parameters of the pou'ers exerci.sable bg CBDT under Section 1 19 of the Act'\" 65.4 Again in the case of Commissioner of fncome Tax vs' Punalur Paper Mills Ltd.,s in paragraph No'3 it ri'as held as under' viz'' \"The Board of Reuerute is competent to iss;.;\"e circulars under Section 119 of the Income Tax Act' Tle circwlars so issued haue got the force of lau. All officers of the Department are bound bg ihe said ciranlars. The beneuolent circulars i'ssued by tlrc Board ore in the nature of administratiue relief' Theg reallg \"supplant\" the lanu. The ciratlar can afford administratiue relief euen begond the releuant tems of tle statute' It can deuiate from the prouisions of the Act.' 65.5 In the case of Bombay Mercantile Co-op Bank Ltd' vs' Central Board of Direct Taxes, Mintstry of Finance and Others6' the High Court of Bombay held. at paragraph Nos'7 and 8 as under' viz'' t [rggg] tzo trR gz (rrn) 5 2o1o scc onLine Bom 1387 Page 45 of 68 PSK,J & NT&J wp,23255 20l l&batch '7. As enn be seen from tle reading of the said proui,sion the Board is uested wtth the pouer to admit ang application after the expiry1 of tte perbd specified bg or under thi\"s Act if suJficient grounds are made out. In our uieu), therefore, the said reason mentioned bg the petitioner in its application, deserues to be accepted. The otlqer reasons cited for condonation of delag, therefore, need not be gone into a-s the petitioner in our uieu, LDould be entitled to condonation of delag on the satd ground alone. 8. It is utell settled tlnt in matters of condonation of delag a highly pedantic approach slnuld. be escheuted and o justice- oiented approach should be adopted and a partA sLrculd not be made to sulfer on account of teclvicalities.\" 65.6 In the c:tse of Ex-Capt. Harish Uppal vs. Union of India and Aaotherz, the Hor-r'ble Supreme Court held in paragraph No.3O AS under, viz., \"3O. No bodg or autlnrity, statutory or not, uested uith potuers can abstain from exerci,sing the pouers when an occasion utarranting such exercise arises. Euery pou_ter uested in a public outhoitu is coupled uith a dutg to exercise it, uhen a sihtation call.s for such exercise. The authoifu cannot refuse to act at its utiLl or pleasure. It must be remembered tlnt if such omisslon continues, particularlg u.then tlere i.s an apparent threat to the admini.stration of justice and fundamental ights of citizens i.e. the litigatirtg public, courts utill alwags haue autlnitg to compel or enforce the exercise of the pouer bg the statutory autlnitA. The courts u)ould then be ampelled to issue directians as are necessory to compel the authoritg to do tuhat it stauld. haue done on its oLUn.\" 65.7 The High Court of Karnataka in the case of Dr. (Smt.f Sujatha Ramesh vs. Central Board of Direct Taxes, New Delhi8 held at paragraph Nos.12 and 13 as under, viz., '1zOO:1 z 5upre*u court Cases 45 PSK,J & NTR,J wp-23255-2Ol l&batch \"12. The uide poroers of the Central Board of Direct Taxes or other higher authaities of the Departinent to ttthom such pou.ters can be delegoted under Section 119 of tLrc Act, Date of Order 24- 1O-2017 W.P.No.54672/ 2O15 Dr.(Smt.)Sujatha Ramesh Vs. Central Board of Direct Taxes and anotlrcr. need not alu-tags take onlg a pro reuerlue approach in such matters. TLteir approach in such cases slnuld be equitious, balancing and judicious ttLhich should reflect the appltcation of mind to the facts of the case and before denging the genuine claim of th'e assessee on the grounds of mere delag in making such claim, something more than the user of innocuous terms as emploAed in the present case, should be forthcoming. Technicallg, stictlg and literallg speaking, the Board might be justified in denging the exemption from capital gains tax bg rejecting such condonation application, but an assessee, utho substantiallg soti-sfies the condition for auailing such exemption should not be denied the same, merelg on the bor of Limitation, especiatlg, uhen the legi-sloture has confetred uide cliscretionory pouers to condone such delag on the highest executiue outlnitg of the Central Board of Direct Toxes under'the Act. 13. The general and tuide pouers giuen to the Board in this regard, \"if it considers it desirable or expedient so Date of Order 24 - 1 O-2O 1 7 W.P. No. 54672 / 2 O 1 5 Dr. (Smt.)Sujathn Ramesh Vs' Central Boord of Direct Taxes and another. to do for auoiding genuine hardship in ang case.....\", not onlg giues wide potuers to the Board, but confers upon it a obligation to consider facts releuant for condonation of delag as uell as the meit of tLrc claim simultaneouslg. If the ctoim of exemptinn or oth-er clai'm on meits is eminentlg a fit cose for making such claim, it should not normallg be dekated on th,e bar of limitation, partiallarlA, when the delag or the time peiod for ruhich condonation is sought is not abnonnallg large. It uill of course depend upon the facts of the each case, uh,ere such a time peiod or the meit of the claim d.eserues such exercise of discretion in fauour of the assessee under Section 119 (2)(b) of the Act or not and therefore, no stroight jacket forrnula or gaidelines can be laid doun in this regard' Hotueuer, such orders passed bg tlrc Central Boord of Direct Taxes being a quasi-judicial order is alu.tags open to judicial reuieu.t by the higher constifrttional courts. If the good conscience of the Courts is pricked, euen though such orders rejecting the '120171 87 ta*mann.com 228 Karnataka Page 46 of 68 Page 47 of 68 PSK,J & I{TR,J wp_23255 2O11&batch claims on the bar of limitation maA appear to be pimo facie tenoble, tte Courts rLaA exerci.se Date of Order 24-1O-2017 W.P.No.54672/ 2015 Dr.(Smt.)Sujatha Ramesh Vs. Central Board of Direct Taxes and anotller. their juisdiction to set aside such orders and allout the cloim.s on merits, setting aside tte bar of limitation.'' 66. Dea-ling $'ith the relevarcy of collecting tax on the real income and tJle actual expenses incurred on the raid not to be collected under any circumstances on inflated or unrealistic entries made in the books of accounts, the Hon'lcle Supreme Court laying down certain precedents has held as under 66.1 In the case of Deputy Commissioner of Income Tax vs T. Jayachandrane, the Hon'ble Supreme Court in paragraph Nos.16, 18 and 19 held as under, viz., \"16. The conduct of the respondent in the transaction in question cannot be tertned to be stictlg tttithin the normal course of business and th.e irregulaities can be noticed from the manner in uhich th.e whoLe transactions utere conducted. Houteuer, the som.e cannot be the basis for Lnlding the respondert Liable for tax u.'ith regord to the sum in question and tuhat is required to be seen is uhether there accrued ang real income to the respondent or not. 18. We do not find any J'orce in the contention of the appellant herein os the High Court has not held that the findings of the ciminal court are binding on the Reuerute AutLLoities. Rather the High t)ourt uas of th.e uieu that the findings arnued at bg the ciminal court can be taken into considerahon uhile deciding the question as to the relationship betuueen the parties to the case. When the findings are arriued at bg a ciminal court '120181 6 Supreme court cases 189 Page 48 of 68 PSK,J & NTR,J wp-23255-2O11&batch 66.2 lnthe case of Godhra Etectricity Co' Ltd' vs' Commissioner of Income Tax, Gujarat-Il, Ahmedabadro the Hon'ble Supreme Court in paragraph Nos. 13, 14 and 22held as under' viz'' on the euidence and the mateial placed on record tlen in the absence of angthing shown to the contrary' tltere seem's to be no reosorl os io uthy this duly proued euid'ene slnuld not be relied upon bg tLe Court- 19.'he income that lu;ts actually accrued to the respondent is taxable. WTnt income hos reolly occrued is to be decided' not bg reference to phgsicat receipt of iname, but bg the receipt of income in reaLitg.\" \" 73. Under the Act income charged to tox is the income that is receiued. or i's deemed to be receiued in India in the preuious geor releuant to th'e gear for ruhich assessment is made or on th\" inao^. that accrues or arises or is deemed to accrue or rrnse in India during such gear' The computation of such income i,s to be made in arcord'ance rtLith the methad of accounting regularlg emploged bA the assessee' It mau be either the- cash sAstem ulrcre entries are made on the basis of actuol receipts aid acanl outgoings or disbursements or it mag be the mercantile sgstem uLere enties are made on accntol basis, i.e., accrual of the ight to receiue paAment and the accntal of the liabititA to disburse or paA' In CIT u' Slnorji Vollobhdis ond\" Co. [(1962) 46 ITR 144 (SC)] it has been laid doun: (ITR P. 148) o..- Income tax is a leug on income' No doubt' the Income Tax Act takes into account trt-to points of time at uthich the liobilitg to tax is ottracted, ttiz', the accrual of the iname or its reieipt; but the substance of the matter is th'e income' If income does not result at all, there cannot be a tax' euen though in book-keeping, on entry b T?!t about a 'hgpZtneticol inciame', tlthich does not mateialise'\" 'o 1199714 Supr\"me court cases 530 l Page 49 of 58 PS|K,J & ITTR,J wp 23255 2O1l&batch t) 74, This pinciple b applicable uhetler the accounts are maintained on cash sgstem or un-d.er the merutntile sAstem. If the accounts are maintained under the mercantile system uthat tns to be seen is utleth.er irrcome can be said to haue reallg accrued to the assessee companA. In H.M. Kashiparekh & Co. Ltd. u. CIT l(1960) 39 ITR 706 (Bom)l tlLe Bombag High Cour.t ttnd said: \"... Euen so, (the failure to produce account losses) ue shaLl proceed on the footirlg that, the assessee compang hauing follotued the mercantile sAstem of account, tttere must haue been entries made in its books in the accounting yeor in resper:t of the amount to commbsion. In our judgment, ue tuould not be justifted in attaching ang partianlar importance in this cose to the fact thnt tLE compang folLou,,ed m.ercantile sgstem of account. That utould not haue ang portia)lar bearing in applging the pinciple of real income in tLe facts of this case.\" 22. The question uhether there u.tos real accntal of income to fhe assessee companA in respect of the enhanced charges for supplg of eLectrbitg hr.s to be consid.ered bg taking the probabilitA or improbabilitg of realisation in a reali.stic monner. If the matter i-s considered in this light, it i.s not possible to hold that there uas reol accrual of income fo fhe assessee companA in respect of the enhanced charges for supplg of electricitg which ut<,re added by thi Income Tax Olficer uhile passing the assessment orders in respect of the assessment gears under considertfiion. The Appellate Assislanf Commi.ssioner u.tas rtght in deleting the said addition made bg the Income Tax Olficer and the Tibunal lnd ightlg held tLvat the clai.m at the increased. rates as made bg the assessee compang on the bosi.s of uthich necessary entries utere made represented onlA hgpotheticol incom,e and the impugned amounts as brought to tax bg the Incom.e Tax Olficer did not represent th.e incnme uthich had reallg accrued to tle ossessee compang during the releuant preuious gears. nE High Court, in our opiniory was in effor in upsetting th.e said uieut of the Tibunal.\" Page 50 of 68 PSK,J & NTR,J wp 23255 2oll&batch 66.3 The Hon'ble Supreme Court in the case of Commissioner of Income Tax, West Bengal II vs. Birla Gwalior (Pl Ltd'rr held as under, vtz-, \"8. ...Hence, the mere foct that the assessee Compang uas mointaining its accounts on the basis of the mercantile system cannot leod to the conclusion that the cnmmisiion tad accrued to it by th.e end of th-e releuant accounting gear. .. .-.it u.tos the real income of tLrc assessee Compang for tle accounting gear thot tuas liable to tox ond that the real income could not be arriued at without taking into accnunt tte amount forgone bg the assessee. In ascertaining the reol inmme the fact that th.e assessee foltorted the mercantile sgstem of accounting did rot haue ang beaing-..\" 66.4 The Hon'ble Supreme Court in the case of Commissioner of Income-tax vs. Shoorii Vallabhdas &'Co.rz held as under: \"Income-tax is a leug on income. No doubl tle Income-tax Act tokes into account trt-to points of time at uhich the liobilitg to tox is ottracted, uiz., tlrc accruol of th'e income or its receipt; but the substonce of the matter is the income lf incomes does not result at all, there connot be a tax, euen though in book' keeping, an entry i,s made about a \"hypothetical income\", tuhich does not materialize. Where income has, in fact, been receiued and b subsequentlg giuen up in such circumstances that it remains the incom.e of the receipient, euen though giuen up, the tax may be pagable. Where, loueuer, the income con be said not to haue resulted at all, there is obuiouslg neitller accntal nor receipt of irrcome, euen though an entry to that effect might' in certain circum.stances, haue been made in the books of account' A mere book-keeping entry cannot be incom-e, unless income h;rrs actuollg resulted, ond. in the present cose, bg the ctnnge of the terms the income tuhich arcrued ttLos receiued ansisted of the lesser amounts and not the larger-\" \" 119741 3 Suprem\" court cases 196 \" (tgoz) +o trR ra+ (sc) Page 51 of 58 PSK,J & T{TR,J wp_23255_2O11&batch 66.5 In the czrse of S.D.S. Mongia vs. Central Board of Direct Taxesr3, the High Court of Delhi held in paragraph No.6 as under, v z. , \"6. Stnce the extraordinary jurisdiction of this Court l'r-s been inuoked, th.e constraints tllot mag Laue been Jblt bg ttle Commissioner in deciding lhe assesse's reuision application under section 264 u;ould not impinge on the potuers of tlrc Court under article 226 of the Constitution to (Drrect an injustice that has occurred albeit becttuse of the petitioners/ assessee himself. Article 265 of the Constitution mandates that no person shnll be toxed without the authoritg of lana. Since in the present case tltere is no authoitg to tox the annuities receiued by the petitioner, we consider it appropiate to exercise our ertraordinary pouers to correct the injustice.\" 66.6 In the case of R. Seshammal vs. Income-Tax Oflicer and Anotherl4, the Madras High Court held at paragraph Nos.4 and 8 as under, v2., \"4. The fact that the petitioner had paid the monies to tle Gouernment under the mistaken notion that the association of persons uould be liable for tax euen uthen the asses.sment uras not required to be made as on association of persons; that tLe amount though paid was not acfuollg required to be- paid and that the State has not refunded those omounts bg tokirq aduantaqe of tlrc mistake committed bg the pager i.s not in dispute. The Act is not intended to benefit the State bg enabting it to collect or retain monies not payable to it under the Act. What i-s required to be collected from the assessees under the Act i.s onlg tLe tax and other amounts properlg pagable under the Act. 8. The State is not entitled to plead tLw hgpertechnical ptea of limitation in such a situation to auoid retum of th.e amounts. Section 119 of the Act uests ample pouer in the Boord to render \" 1zooz1 teo raxuAN 101 (DELHt) 14 1998 sCC Online Mad 9s1 Page 52 of 58 PSIK,J & IiITR,J wp,23255-2Ol l&batch 67. The Hon'ble Supreme Court further dealing with the term 'genuine hardship' as is referred to in Section 119(2)(b) of the Income Tax Act, has in a couple of decisions laid down certain judicial precedents which are as under: 67.L ln the case of B.M. Malani vs. Commissioner of Income Tax and Anotherls the Hon'ble Supreme Court held in paragraph Nos.16, 17 and 18 as under, viz., \"76. The tenn \"genuine\" as per the Neu Collins Conci'se English Dictionary i.s defined as under: \"'Genuine' meons not fake or counterfeil real not pretending (not bogus or merely a ruse)\". 17. [Ed : Para 77 corrected uide Official Corrigendum No. F.3/Ed.B.J./ 5/2OO9 dated 2O-1-2OO9.l For interpretation of the aforementioned proui.sion, the pinciple of purposiue construction should be resorted to. Leug of interest is statutory in nature, inter alia, for recompensating the Reuenue from loss sulfered bg non-deposit of tox by the assessee uithin the time specifted therefor. The said pinciple should also be applied for tle purpose of determining as to tuhether ang hnrdship Lnd been coused or not. A genuine hardship tuould, inter alia, mean a genuine diffrcultg. That per se utould not lead to a conclusktn that a person hauing lorge assets lttould neuer be in dilficultg as he can sell those assets and pag th-e amount of interest leuied. 18, The ingredients of genuine Lnrdship must be determined keeping in uieut the dictionary meaning thereof and the legal conspectus attending thereto. For th'e said purpose, another \" 120081 10 Supreme Court Cases 6L7-.r-. justice in such a sitttotion. The Board lLa.s acted arbitrarilg in rejecting the petitioner's reE Lest for refund.\" I Page 53 of 68 PSK,J & NTR,J wp 23255_2011&batch uelL-knoun principle, namelA, a person cannot take aduontage of his ou-n u-)rong, maA also haue to be borne in mind. The said pinciple, It is conceded, has not been applied bg tle courts belout in this case, but u.te maA take note of a few precedents operating in the field to highlight tlrc aforementioned propositiort of law. [See Priganka Ouerseas (P) Ltd. u. Union of India [1991 Supp (1) SCC 1O2] (SCC at pp. 122-23, paro 39); Union of India u. Major General Madan Lal Yadau (Retd.) [(1e96) 4 SCC 127 : 1996 SCC (Cri) s92] (SCC at p. 142, paras 28 29); Ashok Kapil u. Sana Uloh [(1996) 6 SCC 342] (SCC at p. 345, para 7); Sushit Kumar u. Rakesh Kumar !(2OO3) 8 SCC 6731 (SCC at p. 692, para 65, first sentence); Kusheshtuar Prasad Singh u. State of Bihar [(2OO7) 11 SCC 4471 (SCC at pp. 451-52, paras 13-14 and 16).1\" 67.2 ln the case of Sitaldas K.Motwani vs. Director General of Income Tax and Others16, the Bombay High Court in paragraph No.3 arrd 15 has held as under, viz., 3. Ilp ossessee filed his retunt of income for the first time for A.Y. 2OOO'01 claiming that the Stnrt Term Capital Goins on sale of shares of Indian Companies qualifg to be in.uestment income u/ s.l 15C of the Act, taxable at a JTat rate of 2Ook and claimed a refund of Rs.2O,78,877/-. Needless to mention that pior to f.ling this refinn on 24th September, 2OO3, the assessee did not file ang return for anA assessment Aear. The return of income for A.Y.20OO-O1 had become baned by Limitation on 31st Marc 2OO2 and therefore, the return u-tos filed on 24th September. 2OO3 along uith an application u/s.119(2)(b) for condonation of delag in filing of retum ond claiming refund. 15. The phrase \"genuine Lnrdship' used in Section 119(2)(b) should Lnue been construed liberollg euen uhen the petitioner has complied tuith all th.e conditions m-entioned in Circulor cl.ated 12th October, 1 993. The Legi-slatnre has conferred rhe pouer to condone delag to enable the authoities to do substantiue justice to th-e parties bg disposing of the matters on meit. The expression \"genuine\" has receiued a 16 Writ Petition No.1749 of 2009 of the Bombay High Court Page 54 of 68 liberal m.eaning in uiettt of the laut laid doun bg the Apex Court referred to hereinaboue and rtlhile consid\"ering this aspect, the authoities are expected to bare in mind that ordinarily the applicant, apptging for condonahon of deLaA does not stand to benefit bg lodging its claim late. Refusing to condone delag can result in a meitorious motter being thrown out at the uery threshold. and cause of justice being defeated' As against this' when d.elag is condoned the highest that can happen is that a cause tttould be clecided on meits afier heaing the parties' When substantial justice and technical consirleroti'ons are pitted aga st each other, dause of substantial justice deserues to be prefened for the other side cannot claim to haue uested right in injustice being done because of o non deliberate delay ' iere is no prestmption that delag is occasioned deliberately' or on occount of atlpabte negligence, or on account of malafides. A titigont d.oes not stand to benefit bg resorting to deLag. In fact he ntns a seious riik. The approaclL of the authorities should be justice oiented so as to aduance cause of justice. If refund is legitimatetg due to the opplicant, mere delay shottld not defeat the claim for refund'\" 67.3 The High Court of Kera'la in the case of Pala Marketing Co-op' Socy. Ltd. vs. Union of India & Orsl7 held in paragraph No'3 as under: \"3. What is stated in Section 119(2)(b) is that if the Board considers desirable or expedient for auoiding genuine hnrdship to the assessee, it shauld condone the delag ' In other utords' uhat the Board. should consider i,s hardship to the partg if delag is not condoned. The Board should condone the delag if faiture to cond.one the d.elag couses genuine haidship to the assessee, no matter uhether the delag in filing retum is metianlouslg explained or not. In oth'er rtords, once the Board allouts the application under Section 1 19(2)(b) of the Act' the matter goes to the Assessi ng Officer for consideing assessee's claim for refund untJer Section 237. Section 237 makes it clear that the Assessiag OJficer u'thile consideing application for refund should consi.der th.e amount of tox chargeable on the t' zooa (t) xu sot PSK,J & NTR,J wp-23255-2O11&batch I ' Page 55 of 68 PSK,J & NTR,J . ] wp_23255_2O11&batch claimant tLnder the Act and refund orises onlg if -pagnent is in excess of lhe tax pagabl.e under the Act.' 67.4 ln the case ol Jaswant Singh Bambha vs. Central Board of Direct Taxes and Othersls it was held in paragraph Nos. 11 and 12 as under: \"11. It is ,lnte that the aforementioned obseruations haue been mad.e in the context of clause (a) of Section I 19(2) of the Act but ute are of the uieu that the same shnll applg in full force euen to clause p) of the said prouision. Clause (a) deals ulith the power to grant relaxation from the proubion s of seueral sections enumerated therein. Clause (b) deals u;ith pouer to grant relaration from the peiod of limitation to auoid genuine hard.ship i.n any case or class of coses. In Associated Electro Ceramics [1993] 2O1 ITR 5O1 (Kom| it tuas h.eld that euen though no potuer had been granted to an Income-tax Olficer or ong other off.cer to condone the debg in making the claim for refund, sttch pouer had specijicallg been confened on the Board untler Section 119(2)(b) of tle Act. The contention of the Reuenue that the Board had no stch pouer utas rejected by S. Rajendra Babu J. (as hi-s Lordship then uas), in the follouing terms (page 5O4) : \"Ttte contention of learned counsel for the Department tlnt if no potuer hod been granted to an Income-tax O.fftcer or ang otlrcr officer to condone the delag in nt.aking such a claim, the Board also cannot extend time, tuill not be correcl because this prouision e-xpressly prouides tlnt, u-there ang time limit has been ftxed, such time limit can be ertended or dekty condoned bg the Board.\" 12. The pouter of the Boord under Section 119(2)(b) to admit an application or cLaim or return filed afier the peiod specif.ed for auoiding genuine hard- ship caused in ong case or closs of cases has also been recognised in Jotat Slnlex Paints (P.) Ltd. u. CBDT [i993] 2O1 ITR 523 (Kam); H. S. Anantharamaiah u. CBDT [1993] 2O1 ffR 526 (Karn); Pallauan Transport Con- \" c.w.P.No.19040 0f 2008 decided on o.1..17.20c.4 Page 55 of 68 PSK,J & tlTR,J wp 23255-2Or.1&batch sultancA Seruices Ltd. u. union of India [1998] 233 ITR 745 (Mad.); Mgsore Sales International Ltd\"s case [1998] 233 ITR 663 (Karn) ;Kusumben M. Paikh's case [2OOO] 242 ITR 5O1 (Guj) and Dharampal Singh Pall's case [2O01] 25O ITR 629 (MP| Bg- admitting a belated claim for refund, the Board neither iiterpres raith tte course of assessment of ang porticular ossessee nor uith the disctetion of the Commissioner of Income-tax (Appeals) uhictt, according to tle Supreme Court in Azadi Bachao Andolan [2003] 263 ITR 706, is the only restiction on th.e pouers of tle Board under Section 1 19 of the Act.\" 68. Again dealing with the topid of orders passed by fraud losing its judicial sanctity and holding that fraud vitiates everything' the Hon'ble Supreme Court has laid down quite a few judicial precedents' some of which are mentioned herein under: 68.1 The Hon'ble Supreme Court in the case of A'V' Papayya Sastry and Others vs. Govt. of A.P. and Othersls, held at paragraph Nos.2 1, 22,25,26,30 and 33 as under, viz', \"27. Nout, it is raell-settled principle of latt tlnt if any judgment or order i.s obtained bg froud' it cannot be said to be a judgment or order in latt. Before three centuies, Chief Justice Ddu ard Coke Pro claime d : \" Fraud auoids all judicial acts, ecclesiasticol or temporal.\" 22. It is tlats settled proposition of lartt that a judgment' decree or order obtained bg plaging fraud on tLe court, tibunal or authaitg i.s a nultitg and non est in th'e ege of the lout Such a judgment, decree or order-bg the first court or bg the final .ouirt-L*t to be treated as nullitg bg euery court, supeior or 'o 120071 4 supreme court cases 221 Page 57 of 68 PSK,J & I{TR.J wp_23255 _2O11&batch inferior. Il can be clnllerryed in ang court, at ang time, in appea| reuision, wit or euen in allateral proc-eedings. 25. It has been said : fratd and justice neuer du.tell. together (fraus et jtLs nuneuam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinai debent). 26. Fraud mog be defined as an act of deliberate deception with the design of seaning some unfair or undeserued benefit bg taking undue aduantage of anotLer. Ii fraud one gaitls at the loss of anothen Euen most. solemn proceedinqs stond uitiated if theg are actuated bg fraud. Fraud is thus an ertinsic collateral a.ct uthich uitiates all judicial acts, Luhether in rem or in personam. The principle of \"fnatitg of litigation\" cannot be stretched to the extent of an absurditg that it can be utiltsed as an engine