Naveen Projects Ltd. vs Deputy Commissioner of Income Tax

The petitioner was assessed to tax vide order of assessment dated 25-3-1997. The petitioner went in appeal to the Commissioner (Appeals). The appeal was allowed in part by order dated 23-2-1998. One of the reliefs allowed to the petitioner was that the expenses incurred on shuttering materials would be treated as capital expenditure with the result that the petitioner became entitled to claim for depreciation as per law on the amount of capital expenditure. It appears that the Assessing Officer has moved an application u/s 154 of the Act before the Commissioner (Appeals) seeking rectification in the order. Giving effect to the appellate order, the Assessing Officer has made a recomputation of the total income and quantifying the tax liability of the petitioner on 6-3-1998. The claim for the depreciation had not been allowed by the Assessing Officer on the ground that orders on rectification application were awaited. The learned counsel for the petitioner had during the course of hearing made available for perusal of the Court a chart of computation of the taxable income according to which the tax due and payable by the petitioner would not exceed Rs. 60,000. However, the Assessing Officer has proceeded to make attachment by serving an order u/s 226(3) of the income tax Act, 1961 on GAIL and also on the Bank of India, as stated at the time of hearing.

We cannot sustain the approach of the assessing authority refusing to give effect to the appellate order which the Assessing Officer was bound to do u/s 250 of the Act merely because the rectification application was pending. The learned standing counsel for the respondent though had sought for time for seeking instructions, no provision of law was brought to our notice which could support the impugned action of the Assessing Officer.

The petition is disposed of in terms of the following directions:

Within ten days from today the petitioner shall appear before the Assessing Officer submitting his own calculation of the taxable income and tax liability as per order of assessment as modified by the Commissioner (Appeals) and tender the amount of the tax due and payable by the petitioner. The Assessing Officer shall make a calculation afresh of the tax liability of the petitioner giving effect to the appellate order.

The petitioner shall within three weeks of the date of calculation afresh by the Assessing Officer pay the amount of tax found due and payable by him.

This, however, shall not prejudice the petitioner''s appeal against the order of the Commissioner (Appeals) and in the event of any interim order being passed by the Tribunal, the benefit thereof shall remain available to the petitioner.

So also if in the meantime the petition u/s 154 of the Act is decided by the Commissioner (Appeals), the petitioner shall comply with that order as well but without prejudice to his right of appeal.

Subject to the abovesaid directions, order under sections 250 and 143(3) dated 23-3-1997 (Annexure P3), and notices based thereon u/s 226(3) dated 27-3-1998 to Gail, Ujjain and Bank of India all hereby quashed