TaxTMI 
TaxTMI 
2006 (3) TMI 100
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....ed. According to the petitioner the tax based on the abovesaid assessment has been duly paid by the petitioner and the proceedings have become final. While so, the Commissioner of Income-tax, the second respondent herein, initiated proceedings under section 263 of the Income-tax Act on the ground that the assessment made by the first respondent is erroneous, in so far as he had granted relief to the petitioner under section 80-IB of the Act. The second respondent revised the order of the first respondent by an order, dated March 2, 2006. By the said order, the second respondent held that the petitioner is not engaged in the manufacture and, consequently, deduction under section 80-IB has been wrongly allowed. Consequently, the second respondent directed the first respondent to recompute the total income of the petitioner, ignoring the deduction under section 80-IB and determine the tax and interest payable on the recomputed income and raise a demand accordingly issuing a notice under section 156 of the Income-tax Act. The order of the second respondent was served on the petitioner on March 3, 2006. Along with the said order of the second respondent, an order of the first responden....
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....ied with the above demand the first respondent also made an arbitrary assessment for the assessment year 2003-04 in respect of which period the assessment proceedings were in progress on day-to-day basis; the petitioner's chartered accountant was also making regular appearance; various details were called for by the first respondent and the petitioner had requested for time for production of these details. Suddenly, by letter dated March 10, 2006, the first respondent issued a letter staring that he would not grant the time asked for and made an order of assessment dated March 13, 2006; along with the aforesaid order of assessment, a notice of demand was issued under section 156 and in the said notice of demand, the first respondent directed the petitioner to pay the entire demand within a period of 2 days. The further case of the petitioner is that in respect of assessment year 2004-05 also, the first respondent made an arbitrary assessment without affording an opportunity as required by law; along with the said assessment also, he issued a demand notice demanding the payment of the entire demand within 2 days. Letters of identical nature were issued in respect of these demands f....
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.... assessee's case for the assessment year 2001-02, before March 15, 2006, the notice of demand being served on the assessee on March 3, 2006. As such this is the only decision which is available on the subject which has almost reached the finality as the decision of the Special Bench has not yet been challenged before the hon'ble court. Hence the submission of the assessee though unnecessary in the context involved in the present writ is misleading and misinterpreting the law on the subject. As the order of the second respondent passed under section 263 is not challenged in these writ petitions, there is no cause of action that arises out of this order here." In paragraph No. 7, it is stated as follows: "It is submitted that the subject-matter of the present writ is the order dated March 13, 2006, passed under section 220(1) of the Income-tax Act by the first respondent and the petitioner has no right to raise any issue pertaining to any other order or communication of this respondent by the petitioner itself in the present proceedings. The contentions are therefore to be dismissed in limine and so not maintainable at all." In paragraph No. 8, it is stated as follows: "As regard....
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....n the notice of demand shall be paid within such period being a period less than the period of thirty days aforesaid, as may be specified by him in the notice of demand." Learned senior counsel submitted that if the Assessing Officer has any reason to believe that it will be detrimental to the Revenue, if the full period of 30 days itself is allowed, he may, with the previous approval of the Joint Commissioner, direct that the sum specified in the notice of demand shall be paid within a period less than the period of 30 days. He emphasised that to reduce the time of 30 days, there should be reason to believe that it will be detrimental to the Revenue, if the full period of 30 days is allowed. According to learned senior counsel, initially the first respondent granted 30 days time by applying his mind to the facts of the case and at that time, the first respondent had no reason to believe that it will be detrimental to give a lesser time than 30 days. But subsequently, after the petitioner sent its reply disputing its liability to pay, the impugned proceedings have been issued reducing the time of 30 days to 13 days and granting only 2 days time for paying the amounts demanded in ....
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....le materials on record. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions contemplated under section 220(1) of the Act are satisfied does not exist or is not material or relevant to the belief required by the section. The court can always examine this aspect. It is abundantly clear that the two reasons which have been given in the impugned proceedings for the belief which was found by the Income-tax Officer hopelessly failed to satisfy the requirements of the statute. In my considered view, even though the assessee may or may not have a chance of success in challenging the order of the Commissioner of Income-tax, as on today, as stated by the Income-tax Officer, the view taken by the Tribunal may at any time be changed by the higher forum and hence that may not be considered to be a relevant ground for reaching such belief. The other reason given by the Income-tax Officer namely, that it is not in consonance with the public policy to permit full period of 30 days for allowing the assessee to make payment of the demand raised, can also not be considered a relevant circumstance to reduce the period of 30 days allowable under....
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....f this month would cause irreparable loss and hardship whereas it admittedly has substantial assets by way of immovable properties including two major industrial units which are worth many times the demand in question." In the same paragraph it is also stated that the petitioner has not made out any case as to how the interests of the Revenue would not suffer in terms of the provisions of section 220(1) if it is allowed full time for payment. In paragraph 3 of the affidavit, the petitioner has stated as follows: "The petitioner has impeccable records with the Income-tax Department and has always been recognized as one of the best asses-sees in the Union Territory of Pondicherry, affording full co-operation to the Department in the matter of income-tax assessment." The respondents, without specifically denying the abovesaid averments, have only stated that there is no provision under section 220(1) to consider the history or background of the petitioner before passing that order. No past conduct or likely future conduct governed the passing of the order and that is only the interests of the Revenue which governs the order. Though it is a matter of discretion for the Income-tax ....