TAMBE, J. - There is very little merit in this application. The petitioner is a public limited company incorporated under the Indian Companies Act. It appears that the petitioner-company was carrying on business of civil engineering. At the material time, its activities were not confined only to India, but were also spread over territories outside India, including Ceylon the former States of Kolhapur and Kapurthala. The petitioner was taxed in respect of its income in assessment years 1942-43, 1943-44 and 1944-45 in Ceylon. The assessment was completed some time in November 1956. Prior to 1956, the petitioner had been assessed in India in respect of those years, and the income earned by it in Ceylon was also included in the tax levied on it in respect of those years. The petitioner, therefore, field and application before the Income-tax Officer Companies Circle the first respondent herein claiming relief against double taxation and praying that the amount due to it on this ground be refunded to it. The first respondent by his order dated 27th December, 1956, rejected its application on the ground that it was barred by time. Against this order of the first respondent the petitioner moved the Commissioner of Income-tax under section 33A(a)(ii) in revision. This revision application was also rejected on the same ground. The petitioner then approached the Central Board of Revenue to obtain the relief. The Central Board of Revenue also rejected to petitioners claim on 3rd December, 1958.
Similarly, the petitioner had been assessed in Kolhapur State in respect of its income in the assessment year 1947-48. This assessment was completed on 29th January, 1951. The said income was also included in the petitioners income determined under the Indian Income-tax Act, and the petitioner was assessed to tax thereon also. On 3rd May, 1954, the petitioner filed an application before the first respondent for obtaining relief against double taxation and the same was rejected by the first respondent on the ground of limitation. In this matter also the petitioner approached the Central Board of Revenue which ultimately by its order dated 31st December, 1958, refused to interfere in the matter.
Similar is the case relating to the income earned by the petitioner in Kapurthala State during the assessment year 1949-50.
It appears that in the year 1959 recovery proceedings were being taken against the petitioner for recovery of arrears of income-tax assessed on the petitioner in the year 1949-50 to 1955-56. The balance remaining due against the petitioner in respect of the tax payable by it in those years amounted to Rs. 4,73,740. A demand notice was issued to the petitioner in August, 1959 in respect of that amount. The petitioner then made an application on September 4, 1959 to the first respondent requesting him to set off the amounts of the aforesaid refunds, to which he was entitled against the demand of Rs. 4,73,740. This application of the petitioner was rejected by the first respondent on 29th October, 1959. It appears that thereafter the petitioner moved the Central Board of Revenue to obtain this relief. But the Central Board of Revenue rejected the petitioners application on 24th June, 1960. The petitioner has now moved this court by an application under article 226 of the Constitution of Indian wherein it prays that this court be pleased to issue a writ in the nature of mandamus or other writ direction or order directing the respondents to set off the amounts of refund due to the petitioner under the Double Taxation Relief Rules against the aforesaid amount of tax payable by it.
Before we go to the merits of this petition it is necessary to consider the preliminary objection raised by Mr. Joshi on behalf of the respondents. He says that the petitioner has approached this court after an inordinate delay. There is no reasonable or satisfactory explanation explaining the delay and therefore the petition be dismissed in limine. In our opinion, the contention is well founded. What the petitioner has in substance challenged is the rejection of his application for refund. That was some time in December, 1958. The petitioner has filed the present petition on 13th October, 1960 i.e., nearly after one year and 10 months. There is no satisfactory explanation for this. It is well settled that in exercising its extraordinary jurisdiction under article 226 this court would interfere when it is satisfied that the petitioner has prosecuted his remedy with due diligence. In our opinion it is abundantly clear that the petitioner has not approached this court with due diligence.
Mr. Mehta, however, contends that in this petition the petitioner is not challenging the orders of the income-tax authorities rejecting its application for refund but it is only challenging the orders made by them rejecting its application for grant of set-off. We have already stated that what has been challenged is in substance the orders of the income-tax authorities refusing to grant refunds. But even assuming that what is being challenged is orders of the income-tax authorities rejecting the petitioners application for grant of set-off even then, there is delay without a satisfactory explanation coming forth. It is an admitted position that the petitioners application for grant of set-off was rejected by the first respondent on 29th October, 1959, and the petitioner has approached this court on 13th October, 1960 nearly after a year. The explanation given is that in between the petitioner had moved the Central Board of Revenue and the order made by the Board was on 24th June, 1960. It has not been shown that the statute provided any application to the Central Board of Revenue against the order of the first respondent. The petitioner, therefore, was not following any statutory remedy available to it under the law. That being the position the petitioner is not entitled to avail itself of the time expended by it in pursuing that remedy. In our opinion, therefore, even approaching the case from this aspect also, the petition should fail on the ground of delay.
We would, however, not rest our judgment only on this ground. On merits also in our opinion no case has been made out by the petitioner. The section on which reliance is placed by the petitioner to obtain relief is section 49E of the Income-tax Act. It provides that where under any of the provisions of this Act a refund is to be due to any person the Income-tax Officer (Appellate Assistant Commissioner) or Commissioner as the case may be may in lieu of payment of refund, set off the amount to be refunded or any part of that amount against the tax (interest or penalty) if any remaining payable by the person to whom the refund is due. Now to call in aid this section, it has to be proved that refund is found to be due under the provisions of the Act to the person claiming the set off. The expression 'found to be due' clearly means that there must, prior to the date set-off is claimed, be an adjudication whereunder an amount is found due by way of refund to the person claiming set-off. On the facts stated above it is clear that there has been no adjudication in favour of the petitioner where under any amount is found due to the petitioner. That being the position the provisions of this section in our opinion, are of no assistance to the petitioner.
For reasons stated above, in our opinion the petition should fail. The rule is, therefore, discharged with costs.