1994 (2) TMI 25 - HC - Income Tax

Summary

Issues:
1. Challenge to the order passed by the Commissioner of Income-tax, Surat
2. Rejection of additional depreciation and investment allowance claim
3. Confirmation of levy of interest under sections 215/217 and 139(8) of the Income-tax Act, 1961
4. Refusal to decide contentions raised by the petitioner on the merits
5. Exercise of revisional powers by the Commissioner of Income-tax

Analysis:
The petitioner sought to challenge the order dated October 12, 1992, passed by the Commissioner of Income-tax, Surat, dismissing three revision petitions filed by the petitioner-assessee against the assessment orders for the years 1985-86 to 1987-88. The petitioner contested the rejection of the claim for additional depreciation and investment allowance on the cash subsidy portion of the cost of acquisition of assets, as well as the confirmation of the levy of interest under sections 215/217 and 139(8) of the Income-tax Act, 1961. The petitioner also raised contentions on the merits, which were declined by the Commissioner.

For the assessment years 1985-86 and 1986-87, the petitioner initially disclosed income in the returns filed. Subsequently, the assessment proceedings were reopened under section 147 of the Act, leading to reassessment orders with revised income figures. The Commissioner, in declining to interfere with the assessment orders, cited the repeated admission of concealment of income by the petitioner during search and seizure operations. The Commissioner's refusal to exercise revisional powers based on the petitioner's history of concealed income was deemed extraneous and not in line with the revisional jurisdiction under section 264 of the Act.

The High Court emphasized that the revisional powers of the Commissioner are wide but must be exercised judiciously, not arbitrarily. The court held that the Commissioner should have considered the petitioner's contentions on their merits instead of solely relying on the history of concealed income. Consequently, the court set aside the Commissioner's order and directed a fresh consideration of the revision petitions on their merits and in accordance with the law. The ruling concluded by making the rule absolute with no order as to costs.