GANGADHAR NARSINGDAS AGRAWAL, MARGAO GOA. vs. THE CHIEF COMMISSIONER OF INCOME TAX, AND 3 ORS.,

1 IN THE HIGH COURT OF BOMBAY AT GOA. WRIT PETITION NO. 68 OF 2006 Gangadhar Narsingdas Agrawal (HUF) an Hindu Undivided

Family carrying on business of mining and export of iron ore and having its address

Anand Bhavan, Station Road, Post Box No. 107, Margao-Goa 403 601. …..... Petitioner. Versus 1. Mr. T. K. Chatterjee, The

Chief Commissioner

of Income Tax, Panaji Goa having his office at Aayakar Bhavan, Plot No. 5, EDC Complex, Patto Plaza, Panjim, Goa Pin: 403 001. 2. Mr.

Sukumar Mondal,

The Assistant Commissioner

of Income-tax,

Head Quarters, Office of the

Chief Commissioner

of Income-tax,

Panaji Goa having his office at Aayakar Bhavan, Plot No. 5, EDC Complex, Patto Plaza, Panaji, Goa.

2 3. Mr. Jayaraghavan B, The

Assistant Commissioner

of Income-tax, circle 1, Margao-Goa, having office at “Blessings” Pioneer

Complex, Opp. District Court, Margao-Goa. 4. Union

India, through

the Secretary, Ministry of Finance

Revenue Department, North Block, Lok Nayak Bhavan, New Delhi. (

Names

of respondent nos. 1, 2 and 3 deleted as per dated 27.3.2006) …..... Respondents. Mr. Ashok Kulkarni, Ms. A. Shirodkar and Ms. V. Palyekar, Advocates for the Petitioner. Ms. A. Dessai, Advocate for the Respondents. CORAM:- V. M. KANADE & U. V. BAKRE, JJ.

RESERVED ON:- 13th FEBRUARY, 2013. DICATATED ON :19th FEBRUARY, 2013. ORAL JUDGMENT ( PER V. M. KANADE, J):

Heard learned counsel appearing on behalf of the petitioner and learned counsel appearing on behalf of the respondents.

3 2. Rule. Rule is made returnable forthwith. By consent heard forthwith. 3. The petitioner in this petition is challenging the order passed by respondent no.1 i.e Chief Commissioner of India and also for a appropriate writ directing directing respondent no.1 to withdraw and cancel order dated October, 2005 and to waive interest amounting to Rs.13,60,762/- ( Rupees thirteen lakhs sixty thousand seven hundred and sixty two only) levied under Section 234B of the Income Tax Act and restrain respondent no. 3 from recovering balance interest amount amounting to Rs.43,078/- (Rupees forty three thousand seventy eight only) and to refund sum of Rs.13,17,684/- (Rupees thirteen lakhs seventeen thousand six hundred eighty four only). 4. Brief facts which are necessary for the purpose of deciding this Writ Petition are as under:- Petitioner filed returns of income tax for the Assessment Year 1997-98 on 31.10.1997 declaring loss of Rs. 13,32,280/- (Rupees thirty lakhs thirty two thousand two hundred and eighty only). An order was passed by

4 respondent no. 3 under Section 143(3) on 8.2.2000 assessing petitioner's income at Rs.54,49,180/- (Rupees fifty four lakhs forty nine thousand one hundred and eighty only) raising a demand for tax of Rs.21,52,672/- (Rupees twenty one lakhs fifty two thousand six hundred and seventy two only) with interest of Rs.13,60,762/-( Rupees thirteen lakhs sixty thousand seven hundred and sixty two only). Against the said order the petitioner filed CIT(Appeals) Belgaum and the tax which was demanded was paid by the petitioner to the extent of Rs.21,52,672/- (Rupees twenty one lakhs fifty two thousand six hundred and seventy two only) and the petitioner filed an application for waiver of interest levied under Section 234B. CIT(appeals) Belgaum by order dated 16.11.2000 remanded the matter to respondent no. 3 to redetermine the issue after giving a hearing to the petitioner however after the remand the earlier order was confirmed and therefore against the said order Appeal was filed before CIT(Appeals) Belguam. In the meantime jurisdiction was transferred to Chief Commissioner of Income Tax, Panaji Goa, therefore, fresh submissions were made for waiver of interest. The appeal filed before CIT Appeals Panaji was withdrawn by the petitioner. Thereafter the application for waiver of interest was filed. Personal hearing was given by the respondent no.1

5 and the application for waiver of interest levied under Section 234B was rejected on 25.10.2005 which order has now been challenged in this Writ Petition. Principal contention of the petitioner was that the petitioner has fulfilled all the conditions laid down in clause 2(d) CBDT notification No. 4000/234/95-IT(B) dated 23.5.1996. 5. The learned counsel placed reliance on the judgment of Karnatka High Court in the case of Commissioner of Income Tax Vs. Gogte Minerals dated 15.9.1995 and it was submitted that in view of the said judgment since the provisions was made by the petitioner was for pit filling expenses and for restoring the said land said amount has to be excluded. Reliance was also placed on the judgment of the Apex Court in the case of New India Mining Corporation(P) Ltd Vs. Commissioner of Income Tax dated 15.2.2000 and it was submitted that the aforesaid notification was issued on 23.5.1996 and was contended that the case of the petitioner was covered by Second notification since there was judgment of Karnataka High Court directly on the point in favour of the petitioner. It was submitted that the said notification dated 23.5.1996 in paragraph 1 reproduced the contents of earlier notification and in

6 paragraph 2 it was modified holding that decision of any high Court in favour of the assessee stand resulting in their payment of advance taxes for ground to waive. It was contended that respondent no.1 noted first part of the last notification and did not take into consideration paragraph 2 of second notification. On the other hand learned counsel appearing on behalf of the revenue relied upon the judgment of the Apex Court in the case of New India Mining Corporation(P) Ltd Vs. Commissioner of Income Tax dated 15.2.2000 reported in (2000) 243 ITR 640 SC. 6. After having heard both the counsel at length, in our view submissions made by learned counsel for the petitioner cannot be accepted. The Apex Court in the case of New India Mining Corporation(P) Ltd.(supra) has clearly observed in its judgment at paragraph 3 as under:- “Once it is held that no expense was incurred by the appellant, the question of any allowable expense being deducted in computing the income from the profits and gains of the appellant does not arise. However, the appellant is aggrieved by the observations of the High court as well as of the Tribunal that on the interpretation of the clauses aforesaid there was no obligation on the appellant to restore the lands to its

7 original condition. However, the appellant is aggrieved by the observation made in the High Court as well as of the Tribunal that the interpretation of the clauses aforesaid there was no obligation on the appellant to restore the land to its original condition. Mr Bahuguna, learned Senior Counsel appearing for the assessee refers to the aforesaid clauses of the lease and also to Rule 14 of the Minerals Concession Rules, 1960. He submits that it is obligatory in law on the lessee to restore the lands to their original condition after termination of the lease. Clause (iv) to Rule 14 of the Minerals Concession Rules, is as under: “14. (iv) Save in the case of land in respect of which the licensee is granted, a mining lease, he shall, within six months after the determination of the licence or the date of abandonment of the prospecting operations, whichever is earlier, security plug all bores and fill up or fence all excavations in the land covered by the licence.” We do not think we have to interpret either the clauses of the lease agreement or even clause (iv) of Rule 14 of the Minerals Concession Rules, 1960 as in the present case, admittedly, no expense has been incurred by the appellant. The question of law, therefore, does not arise in the present

8 case. Any question of any allowable deduction can arise only if any expense is so incurred by the assessee. In these circumstances, we dismiss the appeals leaving the question of law open. There shall be no order as to costs.” 7. In our view in the present case also the petitioner has not actually spent any amount. He had not spent entire amount which was claimed by him and, as such, since the entire amount was not spent the question of any allowable expenses being deducted in computing the income from the profits and gains of the appellant does not arise. 8. The ratio of the judgment in the case of Gogte Minerals (supra) of Karnataka High Court in our view will not apply to the facts of the present case. In the said case Karnataka High Court came to the conclusion that there was no obligation on the part of the assessee to fill up the pit at the end of the contract and in that context Karnataka High Court observed that the expression “undertake”means to make a promise to do something at future date, according to the Tribunal, but what the rule provides for, is to perform in a phased manner the restoration, reclamation and rehabilitation within the time stipulated under the rule. In

9 the said case on facts whether actual amount has been spent during the assessment year was not considered by the Court and as such ratio of the said judgment will not apply to the facts of the present case. Therefore we do not find any reason to interfere with the impugned order passed by respondent no.1. Writ Petition is therefore dismissed. 9. Petition stands disposed of with no order as to costs. V. M. KANADE, J. U. V. BAKRE, J. vn*