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TMI Blog1983 (5) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amounts outstanding in the past and also in the future. It is alleged that this agreement was entered into by the petitioner on the ground of commercial expediency. In the profit and loss account of the petitioner for the accounting year 1972 the amount of interest accrued up to the 31 St December, 1971, being Rs. 32,050.69, was written off as a bad debt. The petitioner alleges that it bad also advanced money on interest to Central Cotton Mills Ltd., which became a sick undertaking, closed down on the I St of June, 1970, and remained closed till the 3rd March, 1972, when the management thereof was taken over by the Govt. of India and thereafter by the National Textile Corporation Ltd. From the balancesheet of Central Cotton Mills Ltd. as on the 31 St March, 1971, it appeared that there was little chance of recovery of the unsecured loan advanced by the petitioner. The Sick Textile Undertaking (Nationalisation) Ordinance, 1974, under which compensation was payable for taking over of the undertaking provided that such compensation would be utilised first for payment of secured loans and other prior claims and thereafter for payment of unsecured loans. By reason of the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner. The petitioner contends that under ss. 144A and 144B, which came into force on and from the 1st January, 1976, in an assessment to be made under s. 143 of the I.T. Act, 1961, where the ITO proposed to make any variation in the income or loss returned prejudicial to the assessee and if the amount of such variation exceeded the amount fixed by the Board under sub-s. (6) of s. 144B of the Act, the ITO was required in the first instance to forward a draft order of the proposed assessment to the assessee on receipt whereof the assessee was given an option to prefer an objection to the proposed order. If any objection was preferred by the assessee within the prescribed time the ITO had to forward the draft order with the objection to the IAC who was required to give directions for making the assessment on the ITO after considering the records, the draft order and the objections and after affording the assessee an opportunity of being heard. By an order made under s. 144B of, the Act the CBDT has fixed the amount of such variation at Rs. 1 lakh for the purpose of s. 144B(1) "Of the Act. The petitioner contends that, in the instant case, the respondent No. having made a var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal amount with interest due from Bagla Co. to the petitioner was Rs. 12.10 lakhs. This amount included interest of Rs. 32,050.60. Daring the accounting period Rs. 4.10 lakhs was repaid by Bagla Co. to the petitioner and subsequently Bagla Co. paid the balance of the entire principal of Rs. 11.65 lakhs in the agreed instalments. Interest amounting to Rs. 32,050.60 was, however, not repaid. It is alleged that as Bagla Co. were able to pay the entire principal amount of Rs. 11.65 lakhs, it could not be held to be financially unsound and there is no justification for non-payment of interest of Rs. 32,050.60. It is denied that the petitioner had forgone interest on the ground of commercial expediency. It is admitted that Central Cotton Mills Ltd. remained closed till 1972. It is alleged that thereafter the management of the undertaking of the said company was taken over by the Central Government and ultimately made over to the National Textile Corporation Ltd. The undertaking, it is alleged, has since commenced business and it is premature to anticipate that a loan of Rs. 12.90 lakhs would not be repaid in future. The petitioner did not take any steps for recovery o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged that the petitioner intends to continue with two parallel proceedings in respect of the same subject-matter and, therefore, is not entitled to any relief in the present writ application which should be dismissed in limine. The petitioner is also not entitled in law to withdraw the appeal already filed. Learned advocate for the petitioner submitted at the hearing that the expression " the income or loss returned " in s. 144B(1) of the Act meant and referred to different heads or items of income or loss shown in the return filed by the assessee. Such income or loss under each separate head had to be computed separately in accordance with the various provisions of the Act relating to each head and were required to be shown in the return separately in different columns. The form of the return was prescribed under the Act and related to computation of income or loss under different heads. Learned advocate submitted further that the expressions " total income " and " income or loss returned " were distinct and separate concepts under the Act and were defined separately. The expression " total income " meant the aggregation of income computed under different heads referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1965 SC 1321. This decision was cited for the following observations of the Supreme Court (p. 1324): " It is true that the High Court would not ordinarily entertain petition under art. 226 of the Constitution where an alternative remedy is open to the aggrieved party. Though that is so the High Court has jurisdiction to grant relief to such a party if it thinks proper to, do so in the circumstances of the case. In the present case, the High Court has chosen to exercise discretion in favour of the respondents and it would not be right for us to interfere with the exercise of that discretion unless we are satisfied that the action of the High Court was arbitrary or unreasonable. Nothing has been brought to our notice from which it could be inferred that the High Court acted arbitrarily in granting the writ prayed for to the respondents." (c) Tata Iron Steel Co. Ltd. v. N. C. Upadhyaya [1974] 96 ITR 1 (Bom). In this case, the petitioner challenged a notice under s. 154 of the I.T. Act, 1961, the orders of rectification made pursuant thereto and the notices on demand thereon in an application under art. 226 before the Bombay High Court. It was stated before the High Court t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from time to time and laid down the law. In Union of India v. T. R. Varma, AIR 1957 SC 882, it was observed that the existence of another remedy did not affect the jurisdiction of the court to issue writ under art. 226 of the Constitution but that the existence of an alternate adequate legal remedy was a thing to be taken into consideration in the matter of granting writs. This has been reiterated by the Supreme Court subsequently: (see A. V. Venkateswaran v. R. S. Wadhwani, AIR 1961 SC 1506, Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), Collector of Monghyr v. Keshav Prasad Goenka, AIR 1962 SC 1694, Collector of Customs and Excise, Cochin v. A. S. Bava, AIR 1968 SC 13, Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556). It has been further laid down by the Supreme Court that where the petitioner challenges the jurisdiction of a statutory authority and seeks writ in the nature of prohibition the court should not refuse to exercise discretion in favour of the petitioner though there may be an alternative remedy: (see Bengal Immunit v Co. Ltd. v. State of Bihar [1955] 6 STC 446, AIR 1955 SC 661, Collector of Customs and Excise, Cochin v. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) of section 28 or section 41 or section 59; (va) the value of any benefit or perquisite taxable under clause (iv) of section 28 ; (vi) any capital gains chargeable under section 45; (vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society, computed in accordance with section 44 or any surplus taken to be such profits and gains by virtue of provisions contained in the First Schedule; (viii) any annuity due, or commuted value of any annuity paid, under the provisions of section 280D; (ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever." 2. (45) 'Total income' means the total amount of income referred to in section 5, computed in the manner laid down in this Act. " " 4. (1) Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate, or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the draft order and the objections and after going through (wherever necessary) the records relating to the draft order, issue, in respect of the matters covered by the objections, such directions as he thinks fit for the guidance of the Income-tax Officer to enable him to complete the assessment: Provided that no directions which are prejudicial to the assessee shall be issued under this sub-section before an opportunity is given to the assessee to be heard. (5) Every direction issued by the Inspecting Assistant Commissioner under sub-section (4) shall be binding on the Income-tax Officer. (6) For the purposes of sub-section (1), the Board may, having regard to the proper and efficient management of the work of assessment, by order, fix, from to time, such amount as it deems fit: Provided that different amounts may be fixed for different areas: Provided further that the amount fixed under this sub-section shall, in no case, be less than twenty-five thousand rupees. (7) Nothing in this section shall apply to a case where an Inspecting Assistant Commissioner exercises the powers or performs the functions of an Income-tax Officer in pursuance of an order made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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