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2019 (12) TMI 870 - HC - Income TaxRevision u/s 264 - capital gains on sale of shares of an entity - One company had gone into liquidation and this Court, appointed an Official Liquidator directing to remit the capital gains on the sale of shares of the Company including the shareholdings of the petitioner in these Writ Petitions as well as four other family members and appropriate the consideration received towards meeting the claims of depositors of RPS - HELD THAT - As the amount of capital gains has been remitted in full by the company, there can be no double demand made of the same amount, in the hands of the petitioner. Proceedings u/s 264 maintainability - where subsequent events have ensured that the entire tax demand including the amount offered to tax by the petitioner and the demand of tax payable thereon has been satisfied by the company pursuant to an order of this Court there can be no further demand on the petitioner. R1, as revisional authority, is certainly empowered, under the provisions of the Act, to consider such requests balancing the interests of the assessee as well as the Income Tax Department to ensure that the proper and appropriate of demand is satisfied and no more.
Issues:
Challenging orders of the Commissioner of Income Tax dismissing petitions for Revision under Section 264 of the Income Tax Act, 1961. Analysis: The petitioner filed returns of income for the assessment year 2001-02, offering to tax capital gains on the sale of shares of a company that had gone into liquidation. The Court appointed an Official Liquidator to remit the capital gains, including the shareholdings of the petitioner and others, to meet the claims of depositors. The Official Liquidator was directed to pay the entire capital gains of a specific amount for the assessment year 2001-02. The order of assessment passed in the hands of the company represented by the Official Liquidator taxed the capital gains from the sale of shares and vehicles. The total capital gains were computed, and the tax amount was determined. The Court confirmed that the amount had been remitted by the company as per the Court's orders, eliminating the possibility of a double demand on the petitioner for the same amount. In one of the Writ Petitions, the Commissioner rejected the petition for revision as not maintainable, citing the petitioner's failure to remit the admitted tax before filing an appeal. However, the Court found this premise incorrect and stated that the filing of the revision application was proper. The Court addressed the question of whether the petitioner could retract from the admitted income in the return. Considering the events where the tax demand had been satisfied by the company as per the Court's order, the Court held that there could be no further demand on the petitioner. The Court emphasized the revisional authority's power to consider such requests to ensure the proper satisfaction of demands without imposing additional burdens on the assessee. Ultimately, the Court allowed the Writ Petitions, setting aside the impugned orders and closing the connected Miscellaneous Petitions without costs.
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