VIJAY KUMAR BHATI Vs. COMMISSIONER OF INCOME TAX
SUPREME COURT OF INDIA
VIJAY KUMAR BHATI
COMMISSIONER OF INCOME TAX
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(1.)The assessee who is the appellant in this appeal has challenged the order of the High Court by which the High Court has purported to clarify its earlier order passed in the assessees writ petition on 21.05.1993 [reported as Vijay Kumar Bhati V/s. CIT, 1994 71 Taxman(Del) 629. Before considering the language of the order dated 21.05.1993, and the interpretation put thereon by the impugned decision, the background in which the order dated 21.05.1993, was passed is necessary.
(2.)The appellant had opened a Foreign Currency Non-Resident Account (FCNR)/SDR account in the Indian Overseas Bank, Tolstoy Marg, New Delhi and had deposited in the same year a total amount of US $ 1,35,405.00. In September, 1985, the ITO sought to provisionally attach this account under the provisions of sec. 281B of the Income-tax Act, 1961, and called upon the appellant to file his return. The appellant filed a nil return which was not accepted by the ITO. The assessment order was passed on 10.09.1985 assessing the appellants income at Rs. 10,28,928.00. The tax was levied thereon and penalty imposed and criminal proceedings initiated. The appellants appeal was dismissed by the CIT(A). The ITO then withdrew the whole amount deposited in the appellants account with the Indian Overseas Bank in two instalments namely, on 9.01.1986, and 10.06.1986.
In the meanwhile, the appellants appeal before the Tribunal from the CIT(A)s order had been filed. The appeal was allowed on 14.05.1987. The Tribunal having set aside the assessment order, the appellant was entitled to refund of the amount withdrawn from his account. He claimed the same from the Revenue authorities. The Revenue authorities refused to refund the amount on the ground that they were withholding the same u/s. 241 of the Act. In fact this refusal continued despite the fact that the Revenues application u/s. 256(1) of the Act had been rejected by the Tribunal and the High Court had also rejected its application u/s. 256(2) of the Act. As against the refusal of the Revenue to refund the amount to the appellant, the appellant filed a writ application before the High Court of Delhi, in 1987. During the pendency of the writ application the ITO passed an order seeking to assess the appellant for the assessment year 1988-89 on the interest which had become due to the appellant u/s. 244 of the Act. The Assessing Officer found that a sum of Rs. 6,83,244.00 was payable by way of tax on the interest. Penalty proceedings were also initiated by the Assessing Officer for non-filing of the return u/s. 271(1)(a), 273, 271(1)(c). The appellant amended his writ petition and prayed for (a) restoration of his Non-Resident Indian Account in foreign currency with the Indian Overseas Bank which after attachment by the second respondent had been withdrawn on 11.06.1986, and 12.06.1986, and (b) for quashing all orders under sec. 241 of the Act and assessment order for the assessment year 1988-89 creating a demand of tax and all other orders of levying penalty, etc. for the assessment year 1988-89.
(3.)In this background the writ petition was allowed by the order dated 21.05.1993. It is not necessary to consider the reason why the High Court allowed the writ petition as the Revenues special leave petition seeking to impugn the order dated 21.05.1993, has already been rejected by this Court.
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