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Maharaja Shri Umaid Mills Ltd. Vs. Commissioner of Income-tax and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtRajasthan High Court
Decided On
Case NumberD.B. Civil Writ Petition No. 261 of 1979
Judge
Reported in[1980]121ITR641(Raj)
ActsConstitution of India - Article 226; Income Tax Act, 1961 - Sections 40A(7) and 154
AppellantMaharaja Shri Umaid Mills Ltd.
RespondentCommissioner of Income-tax and ors.
Advocates: C.L. Agarwal, Adv.
Excerpt:
- .....1979, under section 154 of the act stating therein that the action of the aac in entertaining the assessee's appeal against the assessment order by the ito dated march 11, 1974, was not legal and proper in view of the cit, rajasthan (ii), jaipur's order under section 263 (jc-2/prop. 263/17/74-75-8965 dated february 20, 1975). the assessee contested this application by submitting a reply dated march 5, 1979. the aforesaid application by the iac of income-tax is pending orders by the aac. however, the assessee has approached this court under article 226 of the constitution, praying that the proceedings initiated on the aforesaid application of the iac be quashed and the aac may be directed to dismiss the application as not maintainable. it is frankly conceded by mr. agarwal that the.....
Judgment:

C.M. Lodha, C.J.

1. By this petition under Article 226 of the Constitution, the petitioner has prayed that an appropriate writ, direction or order may be issued setting aside the proceedings before the AAC, Jodhpur Range, Jodhpur, initiated under Section 154 of the I.T. Act, 1961, for the alleged rectification and cancellation of the order of the AAC, Jodhpur Range, Jodhpur, dated April 26, 1978.

2. It appears that the ITO passed an assessment order in respect of the assessee-petitioner for the assessment year 1973-74 on March II, 1974. Aggrieved by the ITO's order, the assessee filed an appeal before the AACof Income-tax, A-Range, Jodhpur. While disposing of the appeal by his order dated April 26, 1978, the AAC held that the assessee-company is entitled to deduction of the full amount of Rs. 48,17,760 on account of the provision of gratuity as per provisions of Section 40A(7) of the 1961 Act. Aggrieved by the aforesaid direction of the AAC, the ITO filed an appeal before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, on July 11, 1978. This appeal is pending. Meanwhile, the IAC of Income-tax (Assessment), Jaipur, made an application before the AAC on February 7, 1979, under Section 154 of the Act stating therein that the action of the AAC in entertaining the assessee's appeal against the assessment order by the ITO dated March 11, 1974, was not legal and proper in view of the CIT, Rajasthan (II), Jaipur's order under Section 263 (JC-2/prop. 263/17/74-75-8965 dated February 20, 1975). The assessee contested this application by submitting a reply dated March 5, 1979. The aforesaid application by the IAC of Income-tax is pending orders by the AAC. However, the assessee has approached this court under Article 226 of the Constitution, praying that the proceedings initiated on the aforesaid application of the IAC be quashed and the AAC may be directed to dismiss the application as not maintainable. It is frankly conceded by Mr. Agarwal that the preliminary objection raised by the assessee before the AAC as to the maintainability of this application has not yet been decided, but the assessee has approached this court on account of the genuine apprehension that he has that the AAC may not grant the assessee any time to pursue the matter with higher authorities and instead of deciding the preliminary objection regarding the maintainability under Section 154, he may set aside his previous order which may cause considerable loss to the assessee.

3. Thus, it is clear, at any rate, that the preliminary objection raised by the assessee, whether the application under Section 154 is maintainable, has not been decided by the AAC, and consequently it would not be proper for us to decide this matter in exercise of our extraordinary jurisdiction, unless the assessee has first obtained the orders of the AAC, who is properly seized of the matter. So far as the assessee's apprehension that the AAC may pass final orders on the application under Section 154 is concerned, suffice it to say, that it is expected of the AAC to first dispose of the preliminary objection raised by the assessee and thereafter to decide the main application, if necessary, only after giving adequate opportunity to the assessee to pursue the matter with higher authorities, if the decision on the preliminary objection goes against the assessee.

4. With these observations, the writ petition is dismissed summarily.


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