IN HIGH COURT OF JUDICATURE AT MADRAS DATE: 06.07.2017 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.Nos.3080 to 3082 of 2005 M/S. NEW LINK OVERSEAS FINANCE LIMITED [ PETITIONER ] MAMATHA COMPLEX NO.13 WHITES ROAD CHENNAI-14. Vs CHIEF COMMISSIONER OF INCOME-TAX CHENNAI-II 121 MAHATMA GANDHI ROAD NUNGAMBAKKAM CHENNAI-34. [ RESPONDENT ] Prayer: Writ Petition No.3080 of 2004 are filed under Article 226 of Constitution of India, seeking for Writ of certiorarified mandamus calling for records and quash proceedings of respondent in impugned order in CC/II B(127) 01-02 dated 16.11.2004 issued by Respondent for Assessment year 1995-96 and direct respondent to refund interest amount so far paid . Writ Petition No.3081 of 2004 are filed under Article 226 of Constitution of India, seeking for Writ of certiorarified mandamus calling for records and quash proceedings of respondent in impugned order in CC/II B(127) 01-02 dated 16.11.2004 issued by Respondent for assessment year 98-99 and direct respondent to refund interest amount so far paid . Writ Petition No.3082 of 2004 are filed under Article 226 of Constitution of India, seeking for Writ of certiorarified mandamus calling for records and quash proceedings of respondent in impugned order in CC/II B(SS) 01-02 dated 28.10.2004 issued by Respondent and direct respondent to refund interest http://www.judis.nic.inamount so far paid under Section 234 B and C of Income Tax Act 2 1961 for Assessment year 97-98. For Petitioner : Mr.V.S.Jayakumar For Respondent : Mrs.Hema Muralikrishnan, SC. COMMON ORDER Heard Mr.V.S.Jayakumar, learned counsel appearing for petitioner and Mrs.Hema Muralikrishnan, learned Standing Counsel for respondent. By this order, all three writ petitions are disposed of. 2. prayer in W.P.Nos.3080 and 3081 of 2005 is for issuance of writ of certiorarified mandamus to quash orders passed by respondent dated 16.11.2004 for assessment years 1995-96 and 1998-99 and to direct respondent to refund interest amount so far paid. In W.P.No.3082 of 2004, prayer sought for is identical to that of prayers in W.P.Nos.3080 and 3081 of 2004 except that date of order is different and contents are slightly different. 3. In two of writ petitions, effect of impugned order is denial of waiver of interest levied under Section 234(B) of Income Tax Act, 1961 for assessment years 1995-96 and 1998- 99. In third writ petition, effect of impugned order is http://www.judis.nic.indeclining waiver of interest levied under Section 234B and 234 C of 3 Income Tax Act, 1961, for assessment year 1997-98. 4. petitioner, stated to be doing leasing on hire, buying and financing operations. petitioner filed return of income for all three assessment years and it was processed under Section 143(1)(a) of Act. Later, assessments were completed under Section 144, determining total income of petitioner for each of assessment years. petitioner filed appeal only with regard to confirmation of additional interest under Section 147, before Commissioner of Income Tax (Appeals). In other respects, assessment orders for all three years remain unchallenged and attained finality. Against interest levied under Section 234(B), petitioner filed waiver petitions before respondent raising various contentions. These applications have been rejected by impugned orders. 5. impugned orders have been challenged on several grounds and in particular, as being non-speaking orders. We need not labour much to decide correctness of stand taken by respondent in impugned orders in light of certain recent decisions of Hon'ble Supreme Court as well as this Court. 6. In case of TVS Finance & Services Limited vs. Joint http://www.judis.nic.inCommissioner of Income Tax reported in (2009) 318 ITR 435, it 4 was held that lease Equalisation charges over period of lease is equal to difference between quantum of principal recovered and residual value and provision was made as per Institute of Chartered Accountants of India's note. This Judgment has been relied upon by learned counsel appearing for petitioner. 7. Per contra, learned counsel appearing for Revenue submitted that in TVS Finance's Case, Division Bench relied on decision of Honourble Supreme Court in Commissioner of Income Tax IV, Delhi vs. HCL Comnet Systems and Services Limited reported in (2008) 14 SCC 470 = 305 ITR 409 (SC). However, subsequently, explanation to Section 115JA was introduced by Finance Act No.2 of 2009 and amendment (g) to explanation to second proviso was made which states that amount or amounts set aside as provision for diminution in value of any asset and this amendment was given retrospective effect from 01.04.1998. 8. From above statement, it is clear that legal position is settled by aforementioned decisions and retrospective amendment which was brought into effect from 01.04.1998 are subsequent dates after impugned orders were passed. http://www.judis.nic.in 5 9. When identical issue came up for consideration before Division Bench in case of M/s Upasana Finance Limited vs. Deputy Commissioner of Income Tax, Company Circle III (3) in T.C.A.No.845 of 2007, Division Bench, by Judgment dated 05.07.2016 remanded matter for fresh consideration to decide question as to whether Lease Equalisation Reserve and Special Depreciation Reserve would fall under clause (g) to explanation to second proviso of Section 115 JA of Income Tax Act. 10. In instant case also such procedure has to be adopted as respondent has to take note of legal position which holds field as on date and in particular, when amended provision was given retrospective effect. 11. For above reasons, writ petitions are allowed and impugned orders are set aside and matters are remanded to respondent to decide question of law which has been raised by petitioner and as noticed above, after affording opportunity of personal hearing to petitioner and pass appropriate orders, on merits and in accordance with law. No costs. 06.07.2017 http://www.judis.nic.inrg 6 http://www.judis.nic.in 7 T.S.SIVAGNANAM, J., rg To CHIEF COMMISSIONER OF INCOME-TAX CHENNAI-II 121 MAHATMA GANDHI ROAD NUNGAMBAKKAM CHENNAI-34. W.P.Nos.3080 to 3082 of 2005 06.07.2017 http://www.judis.nic.in New Link Overseas Finance Limited v. Chief Commissioner of Income-tax, Chennai-II