The Commissioner of Income-tax, Central-I, Kanpur v. Subrata Roy
[Citation -2016-LL-0704-10]

Citation 2016-LL-0704-10
Appellant Name The Commissioner of Income-tax, Central-I, Kanpur
Respondent Name Subrata Roy
Court SUPREME COURT
Relevant Act Income-tax
Date of Order 04/07/2016
Judgment View Judgment
Keyword Tags discretionary power
Bot Summary: The challenge in the present Special Leave Petitions is against the common order dated 21st February, 2014 by which the High Court of Allahabad has recalled the final order dated 27th August, 2013 passed in Income Tax Appeal Nos.59/2006, 57/2006, 58/2006, 60/2006, 61/2006 and 62/2006 by exercising jurisdiction under Section 260A(7) of the Income Tax Act, 1961 read with Order XLI rule 21 of the Code of Civil Procedure, 1908. A perusal of the judgment and order dated 27th August, 2013 disposing of the appeals would go to show that the said order is not an ex parte order. The participation of the assessee in the hearing of the appeals is also evident from various other parts of the order dated 27th August, 2013 which however 5 need not be extracted in the present order. The question is one of 6 availability of jurisdiction under Order XLI rule 21 of the CPC, namely, that the order passed in the appeal is an ex parte order. Not only the said order dated 27th August, 2013 is not an ex parte order as contemplted by the provisions of the Code of Civil Procedure, 1908, the final order dated 27th August, 2013 passed by the High Court clearly contains findings which is to the contrary. In these circumstances, we are of the view that the High Court did not have the jurisdiction under Order XLI rule 21 CPC to recall the final order dated 27th August, 2013 passed in the Income Tax Appeals. In view of the above discussions, we set aside the order of the High Court 7 dated 21st February, 2014; allow the appeals filed by the Revenue leaving the assessee(s) with the liberty to challenge the final order dated 27th August, 2013 in accordance with law, if he is so advised and so inclined...,J.,J. NEW DELHI JULY 04, 2016.


SUPREME COURT OF INDIA RECORD OF PROCEEDINGS PETITION(S) FOR SPECIAL LEAVE TO APPEAL (C) NO(S). 23054/2014 (ARISING OUT OF IMPUGNED FINAL JUDGMENT AND ORDER DATED 21/02/2014 IN CMA NO. 104395/2013 IN ITA NO. 60/2006 PASSED BY HIGH COURT OF JUDICATURE AT ALLAHABAD) COMMISSIONER OF INCOME TAX CENTRAL -I, KANPUR PETITIONER(S) VERSUS SHRI SUBRATA ROY RESPONDENT(S) (WITH INTERIM RELIEF AND OFFICE REPORT) WITH S.L.P.(C)...CC NO. 11504/2014 (WITH APPLN.(S) FOR C/DELAY IN FILING SLP AND OFFICE REPORT) SLP(C) NO. 17211/2014 (WITH INTERIM RELIEF AND OFFICE REPORT) S.L.P.(C)...CC NO. 6948/2015 (WITH APPLN.(S) FOR C/DELAY IN FILING SLP AND OFFICE REPORT) SLP(C) NO. 16645/2014 (WITH INTERIM RELIEF AND OFFICE REPORT) SLP(C) NO. 17566/2014 (WITH INTERIM RELIEF AND OFFICE REPORT) Date : 04/07/2016 These petitions were called on for hearing today. CORAM : HON'BLE MR. JUSTICE RANJAN GOGOI HON'BLE MR. JUSTICE PRAFULLA C. PANT For Petitioner(s) Mr. Maninder Singh, ASG Mr. S.A. Haseeb, Adv. Mr. Manish Pushkarna, Adv. Mr. Vikas Malhotra, Adv. Mrs. Anil Katiyar, Adv. For Respondent(s) Mr. Kapil Sibal, Sr. Adv. Mr. Aarohi Bhalla, Adv. Mr. Satyen Sethi, Adv. Mr. Goutam Awasthi, Adv. Mr. Waseequddin, Adv. Signature Not Verified Ms. Sujata Kurdukar, Adv. Digitally signed by VINOD LAKHINA Date: 2016.07.06 14:13:16 IST Reason: 2 UPON hearing counsel Court made following O R D E R Delay condoned. Leave granted. appeals are allowed in terms of signed order. [VINOD LAKHINA] [ASHA SONI] COURT MASTER COURT MASTER [SIGNED ORDER IS PLACED ON FILE] 1 IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5514 OF 2016 [Arising out of Special Leave Petition (Civil) No.23054/2014] COMMISSIONER OF INCOME TAX CENTRAL -I, KANPUR ...APPELLANT VERSUS SUBRATA ROY ...RESPONDENT WITH CIVIL APPEAL NO.5515 OF 2016 [@ SLP(C) NO.16508/2016 @ CC NO. 11504/2014] CIVIL APPEAL NO.5516 OF 2016 [@ SLP(C) NO. 17211/2014] CIVIL APPEAL NO.5517 OF 2016 [@ S.L.P.(C) NO.16514/2016 @ CC NO. 6948/2015 CIVIL APPEAL NO.5518 OF 2016 [@ SLP(C) NO. 16645/2014] CIVIL APPEAL NO.5519 OF 2016 [@ SLP(C) NO. 17566/2014] 2 ORDER 1. Delay condoned. 2. Leave granted. 3. challenge in present Special Leave Petitions is against common order dated 21st February, 2014 by which High Court of Allahabad has recalled final order dated 27th August, 2013 passed in Income Tax Appeal Nos.59/2006, 57/2006, 58/2006, 60/2006, 61/2006 and 62/2006 by exercising jurisdiction under Section 260A(7) of Income Tax Act, 1961 read with Order XLI rule 21 of Code of Civil Procedure, 1908. 4. perusal of judgment and order dated 27th August, 2013 disposing of appeals would go to show that said order is not ex parte order. This would be evident from mere reading of order 3 dated 27th August, 2013, relevant part whereof is extracted herein below: On other hand, Sri Wasqudeen Ahmed, learned counsel for assessee has justified impugned order passed by Tribunal. He submits that whole approach of AO is incorrect as AO has accepted that loans taken by assessee were invested and purchased in share. entire observation of AO are based only on surmise and conjectures and hypotheses and on basis of imaginary and illusionary, which cannot be found as basis for rejecting assessee's claim for payment of interest. case of assessee is fully covered by judgment of Hon'ble Apex Court in Moody's case (supra). He mentioned on 02.01.2000, advertisement was published in Times of India by Sahara India Parivar, in which, it was stated that all Directors have taken oath neither they nor their family members can ever share profit or assets of company. But assessment will have to be completed as per provisions contained in Income Tax Act and not on basis of any statement or advertisement published here and there. 4 Learned counsel further submits that assessee took loan from M/s Sahara India Mutual Benefits Co. Ltd. (SIMBCL) and claimed payment of interest to said company. Such interest had been declared by said company in its income. person will not take investment in share just to throw away his money unless and until he has hope to earn income from such investment. Whether investment is bad investment or good investment depends upon study of person making investment in performance of company. It may be noticed that companies giving outstanding performance go out of market and companies performing not so well tends to start showing better results. Lastly, he submits that in view of judgment of Hon'ble Apex Court in case of Moody (supra), interest in shares has to be allowed on borrowed funds. So, he made request that appeals may kindly be dismissed. 5. participation of assessee in hearing of appeals is also evident from various other parts of order dated 27th August, 2013 which however 5 need not be extracted in present order. 6. Shri Kapil Sibal, learned Senior Counsel appearing for respondents assessee has sought to persuade Court that as discretionary power vested in High Court has been exercised in favour of assessee this Court should not interfere with same in exercise of jurisdiction under Article 136 of Constitution of India. Shri Sibal has also pointed out difficulties of Senior Counsel (who was to come from Bombay) that had prevented his appearance on 7th August, 2013 and has also urged that request was made to accommodate Senior Counsel only for day and, in fact, said Senior Counsel had come to Lucknow and argued other cases of assessee on 8th August, 2013. 7. We have considered aforesaid submissions. question is one of 6 availability of jurisdiction under Order XLI rule 21 of CPC, namely, that order passed in appeal is ex parte order. Not only said order dated 27th August, 2013 is not ex parte order as contemplted by provisions of Code of Civil Procedure, 1908, final order dated 27th August, 2013 passed by High Court clearly contains findings (extracted above) which is to contrary. In these circumstances, we are of view that High Court did not have jurisdiction under Order XLI rule 21 CPC to recall final order dated 27th August, 2013 passed in Income Tax Appeals. power available under Order XLI rule 21 is hedged by certain pre-conditions and unless pre-conditions are satisfied power thereunder cannot be exercised. 8. In view of above discussions, we set aside order of High Court 7 dated 21st February, 2014; allow appeals filed by Revenue leaving assessee(s) with liberty to challenge final order dated 27th August, 2013 in accordance with law, if he is so advised and so inclined. ..,J. (RANJAN GOGOI) ..,J. (PRAFULLA C. PANT) NEW DELHI JULY 04, 2016 Commissioner of Income-tax, Central-I, Kanpur v. Subrata Roy
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