Susanta Chatterjee, J. - (1.) The present rule was issued on March 15, 979, at the instance of the writ petitioner, Messrs. India Foils Limited, praying, inter alia, for an appropriate writ of mandamus commanding the respondent to deal with and dispose of the applications made under Section 220(6) of the Income-tax Act and/or stay of realization of demands for the years 1973-74, 1974-75 and 1975-76 and not to treat the petitioner as a defaulter till the disposal of the appeals pending before the appellate authorities and also to command the respondents to rescind and/or withdraw three notices dated February 27, 1979, issued under Section 221(1) of the Income-tax Act, one each relating to the assessment years 1973-74, 1974-75 and 1975-76 and the order contained in the letter dated November 18, 1978, relating to the assessment year 1973-74 and the order contained in the letter dated February 27, 1979, relating to the assessment years 1974-75 and 1975-76 and all proceedings relating thereto and/or thereunder. It is contended that respondent No. 1, the Inspecting Assistant Commissioner of Income-tax, Foreign Companies, Range-II, failed to exercise his judicial discretion vested in him in accordance with law and his refusal to stay realization was vitiated by failure to consider the proper and relevant matters and taking into account irrelevant and extraneous considerations. It is further contended that the alleged reasons for the refusal to stay the realization of the demand, viz., the need for collection of demand for the purpose of budget, does not constitute any valid material which can be taken into account for the purpose of exercising the power vested in it under the law. The decision of respondent No. 1 as such in refusing to stay the realization of the demand is illegal and invalid. It is alleged that respondent No. 1, while refusing to stay realization of the demand, acted contrary to law and under Section 220(6) of the Income-tax Act in dealing with the application for stay of realization of demands till the disposal of the appeals, respondent No. 1 must act judicially and must exercise his discretion accordingly. The petitioner has tried to make out a case that respondent No. 1 has not dealt with or disposed of the applications made by the petitioner for stay of realization of demands for the assessment years as aforesaid in accordance with law and the impugned orders are bad in law and respondent No. 1 has no power, authority and/or jurisdiction to issue the notices under Section 221(1) of the Act for the said assessment years.
(2.) The writ petition is contested by the respondents by filing an affidavit-in-opposition. It is disclosed, inter alia, that the assessee submitted its return of income on June 30, 1973, showing a total income of Rs. 26,44,200. The assessee was refunded Rs. 7,16,639 by order under Section 141A dated November 12, 1973. The assessment was completed under Section 143(3)/ 144B dated September 9, 1976. The total income was assessed at Rs. 33,35,870 after adjusting tax deducted at source, advance tax and refund already allowed to the assessee. The assessment order dated September 9, 1976, was revised under Section 155(13) dated March 29, 1977, and provision for gratuity was allowed to the assessee. This led to a refund of Rs. 34,876 to the assessee. This order was again revised and a further sum of Rs. 67,314 was found refundable to the assessee on account of interest under Section 214. The assessee went on appeal and got certain reliefs. The full relief allowed to the assessee was not granted to the assessee by order under Section 250 dated January 25, 1978, since verification of earlier records was necessary. A proposal was made for action under Section 263 by the Commissioner of Income-tax, West Bengal, on the grounds that interest paid by the assessee to its head office at the United Kingdom allowed at the time of assessment, was not an allowable expenditure. The Commissioner of Income-tax, in his order under Section 263 dated September 7, 1978, enhanced the assessment and this was given effect to on September 25, 1978. The assessee requested for stay of this demand till the disposal of the appeal filed by the assessee before the Income-tax Appellate Tribunal against the order under Section 263. The assessee's petition was rejected showing reasons therefor and thereafter, a notice under Section 221(1) and letters were issued to the assessee against which the assessee filed a writ petition. Similarly, steps were taken in respect of the assessment years 1974-75 and 1975-76. The details of the assessed amount, the reliefs available to the assessee with actual facts and figures have been fully disclosed in the affidavit-in-opposition for the three aforesaid assessment years. Other allegations of the petitioner have, however, been denied.
(3.) The petitioner has also filed affidavit-in-reply reiterating the stand already taken in the main writ petition.;