I.T.C. LTD. VS DEPUTY COMMISSIONER OF INCOME-TAX
2001 P T D 286
[238 I T R 899]
[Calcutta High Court (India)]
Before Vinod Kumar Gupta and B. Bhattacharya, JJ
I.T.C. LTD. and another
versus
DEPUTY COMMISSIONER OF INCOME‑TAX and others
APOT No.338, T/465, G.A. No. 1680, W.P. No.501 of 1998, decided on 29/04/1998.
Income‑tax‑‑‑
‑‑‑‑Assessment‑‑‑Audit‑‑‑Writ‑‑‑Writpetition against order under S.142(2A)‑‑‑Order staying assessment proceedings and observing that payment of auditor's fees would be considered at final hearing of writ petition‑‑‑Order was valid‑‑‑Indian Income Tax Act, 1961', S. 142‑‑ Constitution of India, Art. 226:
Held, that an interim order staying the assessment proceedings for the assessment year 1995‑96 was passed by the Single Judge. In so far as the question relating to the payment of the fees to the auditor was concerned, the Single Judge did not pass any specific order at this stage and merely observed that the question relating to the payment of fees would be considered at the stage of final hearing of the writ application. The Single Judge had passed a well‑reasoned order protecting the interests of the parties at this stage of the, litigation and the stay of the assessment proceedings itself was enough safeguard. The order was valid.
Dr. Pal for Appellants.
Mr. Shome for Respondents. .
JUDGMENT
There will be an order in terms of prayer (a) of the application.
The appellants have come up in appeal against an order passed on March 10, 1998, by a learned single Judge of this Court.
With the consent of the parties the appeal and the application for stay are taken together for disposal.
It appears that the appellants, being aggrieved by an order passed by respondent No. l in terms of section 142(2A) of the Income Tax Act, 1961, approached the learned single Judge by filing a writ application under Article 226 of the Constitution of India praying therein, inter alia, that the order be quashed on the ground that it was passed by respondent No. l in an improper exercise of jurisdiction by him. The learned single Judge upon consideration passed an interim order to the effect that even though the special auditor in terms of section 142(2A) of the Act may proceed and 1hat the auditor (accountant) may go ahead with the auditing in accordance with law, the assessing authority shall not make any assessment for the assessment year 1995‑96 without the leave of Court, if it is based upon the report that the special auditor may submit. In other words, an interim order staying the assessment proceedings for the assessment year 1995‑96 was passed by the learned single Judge. In so far as the question relating to the payment of the fees to the auditor, however, was concerned, the learned single Judge did not pass any specific order at this stage and merely observed that the question relating to the payment of fees would be considered at the stage of final hearing of the writ application. It is against this part of the order of the learned single Judge and the fact that the learned single Judge declined to stay the operation and implementation of the order appointing the special auditor that the appellants have come up in appeal before us.
Dr. Pal, learned Senior Advocate appearing for the appellants, has contended that the order under section 142(2A) of the Act was passed without jurisdiction, specifically averring that it has been passed without the prior approval of the Chief Commissioner of Income‑tax as required under the Act. Dr. Pal has also vehemently argued that the appellants cannot be burdened with the payment of fees and other incidental charges to the special auditor.
Mr. Shome, learned Advocate appearing for the respondents, have produced before us the original records of the Department. He brought to our attention a communication, dated February 4, 1998, and urged that respondent No. l had sought the prior approval of the Commissioner of Income tax for appointment of a special auditor in terms of section 142(2A) of the Act. He also submitted that in fact the special auditor has already started the work of auditing. According to Mr. Shome, the appellants had agreed to the amount of Rs.30 lakhs and other incidental charges being paid to the special auditor and based on the aforesaid agreement the appellants are now estopped from turning around and challenging either the fixation of the amount or the very basis for its payment.
After hearing the detailed arguments of the learned Advocates for the parties and considering their rival contentions, we are not inclined to interfere with the order of the learned single Judge. We are of the view that the learned single Judge has passed a well reasoned order protecting the interests of the parties at this stage of the litigation and that the stay of the assessment proceedings by itself is an enough safeguard in so far as the appellants are concerned.
With regard to the question relating to the liability of the appellants to pay fee and other charges to the special auditor, we have noticed that the learned single Judge himself has observed that this question shall be taken up for consideration at the stage of the final hearing of the writ application. We ourselves do wish to observe that this question shall always remain open in so far as the ultimate liability of the appellants to pay the auditor's fees is concerned, specially if the Court ultimately decides to quash or set aside the order appointing the special auditor under section 142(2A) of the Act. The appellants should not have an), grievance on that account. The payments made by the appellants, therefore, to the special auditors would thus always remain subject to the final outcome of the writ application.
For the aforesaid reasons, the appeal and the application for stay are disposed of but without any order as to costs.
Nothing stated herein shall be construed as any expression of opinion by us with regard to the merits of the, case.
Since the respondents have not used any affidavit‑in‑opposition to the stay application in the present appeal, the allegations therein shall not be deemed to have been admitted.
All parties are to act on a xerox signed copy of this dictated order on the usual undertaking.
M.B.A./166/FC
Order accordingly.