M.Katju, J. - (1.) This writ petition has been filed praying for a writ of certiorari for quashing the impugned order dated December 22, 1994, annex -ure G to the writ petition, passed by respondent No. 1, Commissioner of Income-tax, Meerut. A prayer has also been made for a mandamus directing respondent No. 1 to waive/reduce the entire interest charged by respondent No. 2 under Section 7C of the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as "the Act") for the assessment year 1987-88.
(2.) Counter and rejoinder affidavits have been exchanged and we have heard Shri V. B. Upadhyaya, senior advocate, and Shri Shambhu Chopra, for the petitioner, and learned Departmental counsel for the Revenue.
(3.) The petitioner is a public limited company incorporated under the Indian Companies Act. The scheme of the Act is that surtax is payable on the chargeable profits of the previous year as exceed the statutory deduction at the rates specified in the Third Schedule. The First Schedule to the Act lays down the rules for computing the chargeable profits and the starting point for computing the chargeable profits of the previous year is the total income computed for that year under the Income-tax Act, 1961. Thereafter the adjustments specified in the First Schedule are carried out to arrive at the chargeable profits. "Statutory deduction" is defined under Section 2(8) of the Act to mean, inter alia, an amount equal to 15 per cent, of the capital of the company as computed in accordance with the provisions of the Second Schedule or an amount of Rs. two hundred thousand, whichever is greater. The Second Schedule lays down rules for computing the capital of the company for the purposes of surtax and provides that the capital shall be the aggregate of the paid-up share capital and free reserves as on the first day of the relevant previous year. Section 7A makes provision for advance-payment of surtax. Section 7C provides for the interest payable by the assessee where the advance tax paid is less than 83 and one-third per cent, of the assessed tax. Section 7C has been quoted in paragraph 6 of the writ petition. The interest levied under Section 7C of the Act can be reduced or waived by the Assessing Officer in the circumstances mentioned in rule 13C of the Companies (Profits) Surtax Rules, 1964 (hereinafter referred to as "the Rules"). Rule 13C has been quoted in paragraph 7 of the writ petition.;