9911796707
TMI Blog1997 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ), by reason of which the Board opined that Circular Instruction No. 133, dated December 10, 1969, is not applicable to the case of the petitioner and the petitioner was not entitled to avail of the benefit thereof. Further prayer was made to restrain the Assistant Commissioner of Income-tax (hereinafter referred to as "the assessing authority") from proceeding pursuant to a notice dated September 22/24, 1992, whereby and whereunder the assessing authority called upon the petitioner to show cause why it should not be treated as an "assessee in default" under section 192 of the Income-tax Act, 1961, and why penalty proceeding under section 271C of the said Act should not be initiated against it. The case of the writ petitioner is that it is engaged in manufacturing and sale of tapered roller bearings, components and related parts and being assessed to income-tax under the Income-tax Act, 1961 (hereinafter referred to as the "said Act"), at Calcutta, and its factory/office is situated at Jamshedpur in the State of Bihar. The company deducts income-tax amount from the salary of its employees working in the said factory/office and deposits the same in accordance with law. In addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board on July 28, 1992, informed the petitioner-company that the said instruction of 1969 is not applicable to the case of the company and, as such, the amount paid was to be included in the salary of the employees under section 17(2)(iv) of the Act. Subsequently, by notice dated September 22/24, 1992, the assessing authority called upon the petitioner-company to show cause as to why it should not be treated as an "assessee in default" on account of the failure to deduct tax on sweepers' allowance by not adding the total amount in the salary of the employees. It was also called upon to show cause why a penalty proceeding should not be initiated against it. It appears that being aggrieved, the petitioner-company challenged the order of the Board dated July 28, 1992 (annexure-9), as well as the notice dated September 22/24, 1992 (annexure 10). Before the writ court it was contended on behalf of the petitioner-company that it was covered under Instruction No. 133 of 1969 and, as such, the Board erred in law in holding that the said instruction was not applicable to the case of the company. Consequently, it was urged that the notice as contained in annexure-10 issued by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with law. It was further directed that the assessing authority shall also take into consideration the effect of the Board's Circular No. 662, dated September 27, 1993, which was subsequently issued by the Board during the pendency of the writ application. This order of the single judge, thus disposing of the writ application, has been impugned before us. Mr. Bhattacharya, learned senior counsel appearing on behalf of the appellant, impugning the order of the learned single judge, has strenuously argued that when the Board intimated the petitioner-appellant on July 28, 1992, that its case was not covered by Instruction No. 133, dated December 10, 1969, even though the learned single judge directed the assessing authority not to be influenced by the said communications, the appellant's apprehension is that the assessing authority in deciding the assessment proceeding cannot overlook the said communication and the same will definitely prejudice the appellant-company in the assessment proceeding. Learned counsel further contended that when the Board, on the representation/letter of request of the appellant, communicated to it that on the facts and circumstances the said notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on the request made by the appellant, the Board was required to give an opportunity to the appellant of hearing ? In this context the relevant provisions of the law may be looked into. Section 2(12) of the Income-tax Act, 1961, defines "Board" which means the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963). In view of section 3 of the Central Boards of Revenue Act, 1963, the Board shall, subject to the control of the Central Government, exercise such powers and perform such duties, as may be entrusted to the Board by the Central Government or by or under any law. Sections 116 to 119 of the Income-tax Act deal with the income-tax authorities both quasi-judicial and executive. In the instant case, we are mainly concerned with section 119 of the Act, which reads as follows : 119. Instructions to subordinate authorities.---(1) The Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing conditions, namely:--- (i) the default in complying with such requirement was due to circumstances beyond the control of the assessee ; and (ii) the assessee has complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed : Provided that the Central Government shall cause every order issued under this clause to be laid before each House of Parliament." On a conjoint reading of the provisions as laid down in sections 116(a) and 119, it appears that the Board being the highest executive authority, exercises its power of administration, supervision and control over the whole Department and it also possesses rule-making power and power to issue orders, instructions and directions to all officers and persons employed in the execution of this Act subject to two exceptions, namely, that it cannot interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate function and it cannot direct the income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner. There is no dispute that the Board has power to issue general c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x authorities. It means that in order to clear an ambiguity in some orders or instructions or directions, the income-tax authorities may approach the Board and the Board may clear the ambiguity but it definitely does not mean that on the request made by a private individual the Board can clarify the intention in issuing any direction, order, etc. Thus, when the Board issued annexure-9 on the request made by the appellant, it cannot be said that the said communication is a quasi-judicial order of the Board. Moreover, there is no dispute about the fact that in the year 1993 another circular was issued which clearly indicates as to under what circumstances the said circular would be applicable. The appellant, having not impugned the said notification by filing an amendment petition in the aforesaid writ application, in my view, cannot make any grievance against the said circular of 1993. In these premises, the argument of Mr. Bhattacharya that even if there is no provision under the Act to give an opportunity of hearing by the Board, the appellant was entitled to get such opportunity from the Board before issuing annexure-9, in my considered opinion, is only to be seen to be rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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