USHA INFRASYSTEMS Vs. INCOME TAX OFFICER AND ORS

JUDGEMENT

(1.) The petitioner by means of this writ petition has prayed for quashing of the order dated 6.1.2009 passed by the Assessing Officer i.e. ITO Shimla rejecting the application for grant of stay and has further prayed that the said order as well as the notices issued pursuant thereto on 5.3.2009 and 16.3.2009 be stayed. The brief facts are that the petitioner declared income of Rs. 2,13,540/- on 31.10.2006 for the Assessment Year 2006-2007 after claiming 100% deduction under Section 80 IC of the Income Tax Act, 1961 (hereinafter referred to as the Act) for a sum of Rs. 5,08,63,101/-. Notices under Sections 143(2) and 142(1) of the Act along with detailed questions were issued to the assessee. The assessee derives income from manufacturing and trading of foundation anchors rods for windmills. The Assessing Officer found that the assessee had been purchasing steel rounds (Bars) which were cut into sizes of ten feet length, straightened, hardened and tempered at Ludhiana in other concerns. The only process being done at Parwanoo was threading upto one ft. on both sides of the bar. Thereafter the bars were sold to the manufacturers of Wind Mills. The Assessing Officer came to the conclusion that this process does not amount to manufacture and therefore the assessee could not claim deduction under Section 80 IC. He therefore added a sum of Rs. 5,08,63,101/- to the income of the assessee and also ordered that interest be charged under Section 234(b), penalty was also ordered to be levied. This order was passed on 21.11.2008. An appeal was filed against the said order and the petitioner also prayed for stay of the order. The stay application having been rejected the present appeal was filed.

(2.) The main contention of Sh. Rohit Sud, learned Counsel for the petitioner is that the case of the petitioner is covered by the guidelines issued by the CBDT on 21.8.1969 which lay down that if the income determined is substantially higher than the returned income the recovery of tax thereon should be kept in abeyance. We are afraid that this notification has no application to the facts of this case. The income assessed is the income declared by the assessee. However, the assessee had sought deduction of this income on the ground that he had manufactured the items in the industrial areas of Himachal Pradesh and thus claimed tax benefit on account of Section 80 IC. The Assessing Officer has come to a finding that in fact no manufacture was done within the State of Himachal Pradesh and the entire process of manufacture was completed at Ludhiana and therefore the petitioner is not entitled to this benefit. The petitioner has an alternative efficacious remedy of appeal and in our considered opinion has failed to show any grounds for invoking the writ jurisdiction of this Court to interfere at this stage.

(3.) We may point out that the petitioner has been praying for early hearing of the appeals also. From the supplementary affidavit filed by the Revenue, we find that the petitioner had made a complaint against the CIT (Appeals) Shimla to the Chief Commissioner of Income Tax on 25.4.2008 and had also prayed that his case be transferred to Ludhiana. This led to the delay in filing the appeal. These facts were not stated by him in this writ petition which was filed much later.