BURMAH SHELL REFINERIES LTD Vs. G B CHAND INCOME TAX OFFICER CO CIR II1 BOMBAY

JUDGEMENT

(1.) ALL these petitions were originally directed against the notices issued on the 18th January, 1965, with a view to correcting the errors apparent from the record under sections 154 and 155 of the Income-tax Act, 1961. The notices were issued by the 1st respondent but the proceedings were completed by the 4th respondent. The four petitions are related to the our assessment years 1957-58, 1958-59, 1959-60 and 1960-61 and they are, respectively, Petitions Nos. 73, 70, 71 and 72 of 1961.

(2.) THE petitions were originally field as soon as the notices were served upon the petitioners and orders for stay were passed by this court. The stay orders were later modified by consent to permit the department to complete the rectification proceedings, as there was a risk of limitation expiring, but on the undertaking of the respondents that they would not take any steps in enforcement of their orders, rectifying the assessments. Consequent upon that modification of the stay orders, the department has passed four separate orders for the four years and after these orders were passed the petitioners were allowed to amend the petitions to challenge the said rectification orders also in addition to the notices which were originally challenged.

(3.) THE brief facts upon which the notices came to be issued are as follows. The petitioners are engaged in the business of refining crude oil at Bombay For the four years mentioned, they were assessed to income-tax and the assessment proceedings included the relief granted to the company under the provisions of section 15c of the Indian Income-tax Act. Under that section, a special exemption from tax is granted to newly established industrial under takings, subject to stated conditions in respect of profits or gains derived from the capital employed in the undertakings. After the completion of these assessments, it appears that the department found that the computation of the figure of capital employed in the undertaking was erroneous according to them and that there was a mistake in the computation. Therefore, they issued the present notices on the 18th January, 1965. In the notices all that was mentioned was that the Income-tax Officer, companies Circle, Bombay, proposed to rectify a mistake in the capital computation for the purpose of relief under section 15c, but later on what the department proposed to do was further clarified. The 1st respondent informed the petitioners that in the capital computation the written down value of the assets, on which initial depreciation was allowed, was taken as per the income-tax records without deducting from such written down value the initial depreciation allowed on the assets and that that constituted "an arithmetical mistake committed through oversight", which was apparent from the record and which should be rectified under section 154. It may be stated here that though the original notices were both under sections 154 and 155, it is now no longer in dispute that only section 154 could be invoked.