In the present case, the revisional authority had passed an order in revision on December 6, 2010. The application for rectification was not made before the Assessing Officer who passed the assessment order which was the subject-matter of revision but the application was made before the revisional authority itself for rectification. Such an application was maintainable and was not barred by section 154(1A). In these circumstances, we are of the view that the Commissioner of Income-tax has erred in declining to entertain the application for rectification.
Revenue submitted that any research and development activity carried out by the head office would automatically ensure to the benefit of the units/industrial undertakings. He submitted that the head office itself does not manufacture any medicines, the benefit of the research and development would be utilized for manufacturing the products and the products would obviously be manufactured by the units.
Applications for stay cannot be treated by the assessing officers or for that matter by appellate authorities as meaningless formalities. Quasi judicial authorities have to apply their mind in an objective and dispassionate manner to the merits of each application for stay. While the interest of the Revenue has to be protected, it is necessary for assessing officers to realize that fairness to the assessee is an intrinsic element of the quasi judicial function conferred upon them by law. Applications for stay must be disposed of at an early date.
Before concluding, we clarify that the observations in the present judgment are confined only to the disposal of the application for stay of the recovery of the demand against the Petitioner and shall not prejudice the rights and contentions of the assessees, the Petitioner and the Revenue in the pending appeals.
Respondent took a business decision not to honour its commitment of fulfilling the export entitlement in view of loss being suffered by it. The Assessing officer does not dispute this fact nor does he doubt the genuineness of the claim of the expenditure being for business purpose. In these facts the Tribunal held that respondent assessee has not contravened any provisions of law and thus the forfeiture of bank guarantee was compensatory in nature under Section 37(1) of the Act.
We find that both the Commissioner of Income Tax (Appeals) as well as the Tribunal have arrived at a finding of fact that Assessing officer did not have any reasonable belief to come to the conclusion that that there has been any escapement for the assessment year 2003-04. The order of MERC dated 01.07.2004 specifically deals with regard to fixing of the tariff rate at which power has to be supplied to the consumer.
The Assessing Officer while reassessing the respondent by an order dated 26/3/2002 has in fact taken a ground different from the grounds in the reasons recorded for reopening the assessment under Section 148 of the said Act. The reasons furnished for reopening the assessment alleged that non fund income had been shown in fund based income so as to avail of a higher deduction.
The CIT adverted to the fact that the quantum appeal had been rejected by the CIT (A) and the ITAT. That in itself would not amount to a valid justification for imposition of a penalty. Before a penalty is imposed, the requirements of Section 271 must be established. Accordingly, it would have been open to the Court to set aside the impugned order in its entirety and to remand the proceedings back to the assessing officer for fresh consideration.
We find merit in the submission of Mr. Apte that the order dated 18.10.2012 directing the petitioner to deposit of Rs.35 lacs is non speaking order. The impugned order does not consider and/or examine submission made by the petitioner in support of its prima facie case to take a prima facie view.
With effect from 1st day of July 2003, section 108 of The Finance (No. 2) Act, 2009 specifically confers power on the High Court to condone delay beyond the period of 180 days, if the High Court is satisfied that there is sufficient cause for not filing the same within the said period. Section 108 of the Finance (No. 2) Act, 2009 while inserting sub-section (2)(a) in terms provides that sub-section (2)(a) shall be inserted and shall be deemed to have been inserted with effect from 1st day of July, 2003.
