1998 (9) TMI 4

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....uary 7, 1991, to the assessee did not set out any reasons for declining the request of the assessee but merely stated that it regretted its inability to intervene in the matter. The assessee is a textile mill. It had become liable for tax for the assessment year 1990-91 by virtue of section 115J of the Act as the book profits amounted to Rs. 6,37,04,956, 30 per cent, of that sum being Rs. 1,91,11,490 became taxable. The assessee paid a sum of Rs. 99 lakhs as tax in three instalments of advance tax, namely, Rs. 16 lakhs on September 14, 1989; Rs. 60 lakhs on December 14, 1989, and Rs. 23 lakhs on March 30, 1990. Mr. Srinath Sridevan, learned counsel for the petitioner, submitted that the order of the Central Board Direct Taxes is illegal and arbitrary and requires to be set aside. It was submitted that under section 119(2)(a) of the Act, the Board is bound to consider the case put forth by the assessee and after affording such opportunity as may be necessary to the assessee, make a reasoned order on the assessee's request; that the power under that provision is a quasi-judicial power and that the reference to class of income or class of cases in section 119(2)(a) includes indi....

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....997 and connected matters decided on December 13,1993, wherein it was held that the power of the Board under section 119(2) is quasi-judicial in nature and that any rejection of claim thereunder should be preceded by an effective opportunity to the assessee concerned. Section 119 of the Act bears the heading: "Instructions to subordinate authorities", and reads thus: "119. (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, instructions and directions of the Board: Provided that no such orders, instructions or directions shall be issued- (a) so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) in the exercise of his appellate functions. (2) Without prejudice to the generality of the foregoing power, - (a) the Board may, if it cons....

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....tructions and directions to other income-tax authorities "for the proper administration of this Act." The proviso imposes a bar on the Board interfering with the exercise of the discretion by the appellate authorities under the Act and also bars the Board from issuing directions to any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner. Section 119(2) has three clauses (a), (b) and (c). Clause (a) deals with the Board's power to issue from time to time general or special orders in respect of any class of income or class of cases "by way of relaxation" of any of the provisions mentioned therein including sections 234A, 234B and 234C, for the purpose of "proper and efficient management of the work of assessment and collection of revenue". The power under section 119(2)(a) is therefore a power to be exercised for the purposes stated therein, namely, for efficient management of the work of assessment and collection of revenue. By exercise of that power, the provisions referred to in that clause may be relaxed. Power of the Board under clauses (b) and (c) in contrast to clause (a) is meant to be exercised for the purpose ....

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....rk of the assessment and collection of revenue". The power conferred by this clause enables the Board to relax the provisions mentioned therein, but such relaxation is not to be merely for the purpose of granting relief to individuals who claims to have suffered undue hardship. Any relaxation that may be ordered by the Board must subserve the object of proper and efficient management of the work of assessment and collection of revenue. The power is to be exercised in respect of a clearly ascertainable class of income or class of cases. The decision to exercise or to refrain from exercising the power under clause (a) of section 119(2) is that of the Board because it alone is required to consider the necessity or expediency for the exercise of the power for the purposes mentioned therein. It does not confer a right on any individual assessee to compel the Board to exercise that power vested in it, in favour of the assessee. This court in the decision relied on by counsel referred to section 119(2), but did not notice the distinction between clause (a) on the one hand and clauses (b) and (c) on the other. The exercise of power under clauses (b) and (c) is undoubtedly quasi-judicial....