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TMI Blog1990 (6) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... e restrictions imposed by the State Government in procurement of raw cashewnuts by directing that only the Co-opertaive Marketing Federation shall procure raw cashewnuts in the State under the Monopoly Procurement Scheme and fixing high purchase price. The fixation high minimum wages and bonus to the large number of factory workers by the Government added to the plight of the company....I may also bring to your kind notice that the company had been remitting monthly instalments of ₹ 1 lakh each to wards income-tax from May,1985 and ₹ 50,000 each to wards surtax from January, 1986 till October, 1986. However since the CIT, Central Circle, Bangalore directed that the entire balance of tax be remitted in lumpsum and refused to issue further challans for remittance of the monthly instalments, the company was not about the make subsequent remittances. The default in remittance of tax dues has arisen only from November, 1986 and due to the continuing stringent financial conditions the company was not able to make any further tax remittance.....The Indian Overseas Bank, Quilon, was giving the company financial assistance against fully secured goods during the above years and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art in relation to the affairs of the company. These aspects have not been taken into account by the CIT when he passed Ext. P15 order and thereby affirmed the declaration made by the first respondent (Ext. P13) that the petitioner being a director of the company which is a private company within the meaning of s. 179, is jointly and severally liable for the tax dues of the company, the counsel argues. He accordingly submits that Exts. P13, P15 and P18 are liable to be quashed. 4. Sri. P.K. Raveendranatha Menon, the learned counsel for the Revenue refuted the above argument of the counsel for the petitioner. He submits that the argument of the petitioner that the company at the relevant time had become a public company within the meaning of s. 43(1A) of the Companies Act, was for the first time raised only in her application under s. 154 of the IT Act. The documents in proof of this case, particularly Ext. P1, the letter of the Registrar of companies stating that the certificate under s. 43(14) is enclosed therein, indisputably were produced only alongwith the application under s. 154. It is thus clear that these documents [assuming that they show] that the company w.e.f. 1st Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkatachalam vs. Bombay Dyeing Mfg. Co. Ltd. (1958) 34 ITR 143(SC)] The power thus conferred is confined to rectifying mistakes in the order passed by the Commissioner himself. To say that a mistake is apparent from the record, the same must, therefore, be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinion. Thus a decision no a debatable point of law cannot be said to be a mistake apparent from the record. [See Satyanaranyan vs. Mallikarjun AIR 1960 SC 137 and T.S. Balaram ITO vs. Volkart Bros. (1971) 82 ITR 50(SC).] Viewed from another angle the principle can be stated thus. The mistake must be something which appears to be so ex facie and is incapable of argument or debate. It therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remain to be investigated cannot be corrected by way of rectification. Alongside we have to keep in view what the word record means and implies in the contact. From the plain and unambiguous language employed in the section it is clear that the record contemplated thereund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le No. 2292) of Rajmohan Cashews Ltd., Quilon, maintained in the office of the Register of Companies, it was notices by an officer of the Revenue that office copy of the letter No. 2292/PC/2C/R 850/77 dt. 26th Feb., 1977 addressed to Rajmohan Cashews (P) Ltd. Vadakkevila P.O., Quilon-10 which is marked as Ext. P1 is not available in the document file. The correspondence file, it is understood would not be made available for inspection. Details of certain order-sheet entries extracted from the document file are as under. Document Date of Order Details 23 22nd Jan., 1977 A/R. made up to 30 Dec., 1974 24 -do- Spl.Resolution passed on 30th Oct., 1973 25 -do- Spl.Resolution passed on 30th Dec., 1974 26 -do- Spl.Resolution passed on 12th May 1975 27 16th Dec., 1977 Particulars of charge created on 1st April 1975 for ₹ 6,00,000 28 11th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n privileges denied to public companies. At the same time such companies continued to be private companies in all other respects (i.e., shares were not quoted/enlisted in a stock exchange, ownership continued to vest in a family group, transfer of share prohibited etc.) Coming to s. 179, only private companies were brought within its fold for obvious reason-tax evasion, habitual default in tax payment., etc., are to be expected from family group (private companies) and not Government undertaking. Hence as far as. s. 179 is concerned, it is irrelevant whether the company is a private company or a private company deemed to be a public company Suffice it to pay that s. 179 is to be resorted to when a family group will fully defaults tax payment out of gross negligence and breach of duty. To sum up, Raj Mohan cashews cannot by any stretch of imagination fall under s. 2(18) of the IT Act and precisely for this reason cannot be absolved from s. 179 by harping on the flimsy ground of a deemed public company since s. 179 does not preclude such companies, which to all intents and purpose are private companies, retaining their family group ownership of the company. 12. This being the pos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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