THE ASSISTANT COMMISSIONER OF INCOME TAX,LTU vs. M/S BOSCH LTD.,

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 1ST DAY OF MARCH 2017

PRESENT

THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MR.JUSTICE N K SUDHINDRARAO WRIT APPEAL NO.4938/2015 (T-IT)

BETWEEN:

1.THE ASSISTANT COMMISSIONER OF INCOME TAX, LTU BANGALORE, JSS TOWERS, 100 FEET RING ROAD, BANASHANKARI IIIRD STAGE, BANGALORE - 560 085.

2.THE CHIEF COMMISSIONER OF INCOME TAX, LTU, BANGALORE, JSS TOWERS, 100 FEET RING ROAD, BANASHANKARI IIIRD STAGE, BANGALORE - 560 085.

3.THE DEPUTY COMMISSIONER OF INCOME TAX, LTU, BANGALORE, JSS TOWERS, 100 FEET RING ROAD,

2 BANASHANKARI IIIRD STAGE, BANGALORE - 560 085. ... APPELLANTS (BY SRI K V ARAVIND, ADVOCATE)

AND:

M/S BOSCH LTD., P.O. BOX NO. 3000, HOSUR ROAD, ADUGODI, BANGALORE - 560 030. REPRESENTED HEREIN BY ITS JOINT MANAGING DIRECTOR MR. SOUMITRA BHATTACHARYA - 55 YEARS. ... RESPONDENT

(BY SRI K.P.KUMAR, SR. ADVOCATE A/W MS.TANMAYEE RAJKUMAR, ADVOCATE FOR SRI T SURYANARAYANA, ADVOCATE)

THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION NO.27405/2015 DATED 15/10/2015.

THIS APPEAL COMING ON FOR PRELIMINARY HEARING THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING:

3 ORDER

Admit.

4 computing interest payable under Section 234C of the Income Tax (hereinafter referred to as the Act for the sake of brevity). On 11.04.2011, the respondent filed petition for waiver of the interest under Section 234C of the Act by taking basis of the notification dated 23.05.1996 and 26.06.2006 issued by the Central Board of Direct Taxes (hereinafter referred to as ‘the CBDT’ for the sake of brevity). On 10.07.2013 the Chief Commissioner passed an order rejecting the application for waiver of the interest under Section 234C of the Act. 6. The respondent challenged the aforesaid decision of the Commissioner by preferring W.P.No.48496/2013. This Court vide order dated 20.08.2014 found that the consideration by the Commissioner that the Board’s order would not apply to the business turnover is not correct and therefore set aside the decision of the Chief Commissioner and

5 further directed the Chief Commissioner to consider the matter afresh and in accordance with law. 7. On 13.03.2015 the Chief Commissioner again considered the matter and passed an order, whereby he rejected the application for waiver under Section 234C of the Act, having found that the explanation is not acceptable. The respondent once again approached to this Court by preferring writ petition challenging the order of rejection of the waiver. The learned Single Judge by the impugned order found that the consideration of the case by the Chief Commissioner was not proper and further held that the explanation given by the assessee was acceptable and also remanded the matter. Under the circumstances the present appeal before this Court. 8. We have heard Mr.K.V.Aravind, learned Counsel appearing for the appellants and Mr.K.P.Kumar, learned

6 Senior Advocate with Ms.Tanmayee Rajkumar, learned Counsel for the respondent. 9. At the outset, we may record that it is by now well settled that the judicial review is available against the order of lower authority or quasi-judicial authority in the decision making process, but the power of judicial review is not available as that of the Court of appeal under Article 226 of the Constitution, unless a very extraordinary case is made out to make a departure therefrom. 10. This Court while exercising the power under Article 226 of the Constitution in a given case if finds that in the decision making process, the grounds considered by the lower authority are extraneous or non-germane to the exercise of the power, it may strike down the decision on the premise that there is no proper consideration of the matter or the consideration

7 is on the extraneous ground or on account of the non- consideration of the ground germane to the exercise of the power. But thereafter even if the decision is set aside, in normal circumstances, the matter will be relegated to the authority for reconsideration. In a case where the matter is relegated or remanded to the authority for reconsideration, the ground which has not been found proper or which is set aside by this Court under Article 226 of the Constitution would be unavailable to the authority. But at the same time, all other aspects than those which are concluded by this Court in the earlier litigation are available. It is with this purpose the matter is remanded or relegated to the authority once again for consideration of the case in accordance with law. 11. The examination of the facts of the present case shows that the observations made by the learned

8 Single Judge upto paragraph 23 of the impugned order cannot be faulted with because the learned Single Judge for the reasons recorded in the order has found that reading of paragraph-2(b) of the notification in a restricted manner would be too myopic and he further observed that the discretion is invested with the Chief Commissioner to exercise judiciously, based on the facts and circumstances and not circumscribed by any fetters. Possibly what the learned Single Judge wanted to convey is that for recording the conclusion on the aspects that the income was neither anticipated nor was in contemplation of the assessee while considering paragraph-2 (b) of the notification dated 26.06.2006, all other facts and circumstances relevant to the facts for recording the aforesaid conclusion are required to be considered and the notification and more particularly clause 2(b) cannot read in a restricted manner. In our

9 view, upto observations made by the learned Single Judge in paragraph-23, no case is made out for interference, since the reasons recorded by the learned Single Judge upto pargraph-23 cannot be said to be perverse or by committing error on the face of the record. 12. However, so far as the conclusion recorded at paragraph-24, we find that there is merit in the contention raised on behalf of the appellants. The learned Single Judge in paragraph-24 has made following conclusion and direction:

“24. In my considered opinion in the facts and circumstances, petitioner’s explanation is acceptable, calling for exercise of discretion by the Chief Commissioner under paragraph 2(b) of the notification dated 26.06.2006, Annexure- B, over the extent of interest waiver. In the result, petition is allowed.

The order impugned is quashed and the proceeding

10 remitted for consideration by the Chief Commissioner, insofar as it relates to the extent of waiver of interest charged under Section 234C of the Income Tax Act, in terms of paragraph 2(b) of the notification dated 26.06.2006, Annexure-B. Compliance within four weeks from the date of receipt of a copy of this order.” (Emphasis Supplied)

The aforesaid shows that the learned Single Judge made a final observation that the assessee’s explanation is acceptable calling for exercise of discretion under pargraph-2(b) of the notification dated 26.06.2006. Thereafter, the learned Single Judge has remitted the matter to the Chief Commissioner for consideration of the case for extent of waiver of interest in terms of the notification dated 26.06.2006. In our considered view, recording of final conclusion for acceptance of the

11 explanation of the respondent was not called for or rather can be said to be exceeding the jurisdiction inasmuch as observed by us hereinabove while exercising the power under Article 226 of the Constitution against the order of the lower authority and after having interfered in the decision making process, the matter was required to be remanded keeping the rest of the aspects open, of course, by excluding the aspects which are already considered by the High Court under Article 226 of the Constitution of India. 13. In our view, such an exercise of jurisdiction of accepting the explanation of the assessee is at par with the appellate power which in normal circumstances would not be available in the scope of judicial review under Article 226 of the Constitution. We do not find that any abnormal circumstances are recorded to make

12 a departure from the normal principles of relegating the matter to the authority for consideration afresh in accordance with law. Hence, the opinion recorded in the impugned order of acceptability of the explanation of the assessee cannot be sustained. Hence the point referred to hereinabove needs to be answered in a manner that the finding could not have been recorded of accepting the explanation of the assessee and the observations made in the impugned order at paragraph- 24 which are underlined in the above referred reproduced portion deserves to be set aside.

13 15. In view of the above, the observations and the directions issued by the learned Single Judge in the impugned order at paragraph-24 are set aside and modified to the extent that the matter shall be reconsidered afresh by the Chief Commissioner for waiver of interest charged under Section 234C of the Act in terms of the notification dated 26.06.2006, in light of the observations made by the learned Single Judge upto paragraph-23 of the impugned order. The Chief Commissioner shall examine the matter and pass appropriate order preferably within a period of eight weeks from the date of receipt of a certified copy of the order of this Court after giving opportunity of hearing to the respondent-assessee.

14 17. In view of the above, I.A.No.4/2016 would not survive for consideration and shall stand disposed of.

Sd/- JUDGE

Sd/- JUDGE

JT/-