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DOONGER SINGH KACHHWAHA v UNION OF INDIA & ORS - CW Case No. 937 of 1996  RD-RJ 483 (24 March 2006)
SBCivil Writ Petition No.937/1996
Doongar Singh Kachhwaha v.
Union of India & Ors. 24th March, 2006
Date of Order ::
HON'BLE MR.JUSTICE GOVIND MATHUR
Mr. Anjay Kothari ]
Mr. Sunil Bhandari] for the petitioner.
Mr. Sangeet Lodha, for the respondents. .....
The Additional Commissioner of Income Tax,
Range-1, Jodhpur under an order dated 22.3.1996 decided the application preferred by the petitioner under Section 144-A of the Income Tax Act, 1961
(hereinafter referred to as "the Act of 1961") seeking guidelines from assessing authority while completing assessment of income for the year 1993-94. The
Additional Commissioner while deciding the application referred above held that interest on the loan which was utilised by the assessee in purchase of bus is not qualified for deduction under Section 36 of the Act of 1961 as every bus in its own is an independent business and not an expansion of earlier business. The
Additional Commissioner held that interest for the period upto date of registration of the bus is to be capitalised. The Additional Commissioner also found no wrong in view of the assessing authority that the assessee himself being karta of HUF could not enter into the agreement with HUF as it was nothing but an agreement with himself.
Being aggrieved by it the instant petition for writ is preferred by the petitioner on the count that interest on bank loan taken for the bus purchased by the petitioner has to be allowed as deduction under
Section 36(1)(3) of the Act of 1961 and no part of it can be capitalised as it is not a new business but is extension and expansion of earlier business.
To substantiate the contention reliance is placed by counsel for the petitioner upon a judgment of this Court reported in (1988) 67 CTR (Raj.) 120,
CIT v. Shah Theaters. Counsel for the petitioner has further stated that agreement between the petitioner and the HUF giving out three buses of petitioner on hire/lease to HUF is valid one and, therefore, instead of entire income of said three buses only hire charges received from HUF can be assessed in the hands of the petitioner.
A reply to the writ petition has been filed on behalf of the respondents in general defending the view taken by the Additional Commissioner. Learned counsel for the respondents also urged that no final assessment for the year 1993-94 has yet been made by the assessing authority, therefore, the instant petition for writ giving challenge to the guidelines prescribed under Section 144-A of the Act of 1961 are not required to be examined at this stage. The same can very well be examined by the appellate authority, if any grievance remains to the petitioner with the order of assessment.
Heard counsel for the parties.
The Additional Commissioner of Income Tax by the order impugned have given certain guidelines to the assessing authority and guidance provided by the
Additional Commissioner is having binding force upon the assessing authority. However, it is not at all in dispute that the final assessment is yet to be made by the assessing authority under Section 143 of the Act of 1961. It is true that the directions/guidelines given by the competent authority under Section 144-A of the Act of 1961 is having binding effect upon the assessing authority but such binding cannot preclude the assessing authority to look into the law laid down by Hon'ble High Courts or by Hon'ble Supreme Court of the country and then to take appropriate decision. The assessing authority is required to make assessment in accordance with law, therefore, it is always expected that the authority will objectively consider all aspects of the matter while making assessment. It is also pertinent to note that the assessment made under
Section 143 of the Act of 1961 is appealable and the appellate authority can very well examine validity of the order of assessment based on the guidance/directions prescribed by the competent authority under Section 144-A of the Act of 1961.
I am of the view that adjudication of the questions raised by the petitioner in the instant petition for writ shall virtually amount to adjudication of assessment in part and that shall not be appropriate as it will create an unnecessary delay in assessment. In usual course validity of an assessment of tax should be examined in one proceedings and not in peace meal. Accordingly, I am not inclined to exercise the discretion vested with this Court in its extra ordinary jurisdiction by examining validity of the order impugned.
This petition for writ, therefore, is dismissed. The assessing authority shall make assessment of the income of the petitioner for the year 1993-94 objectively and shall consider the law cited by the assessee to substantiate his stand. In the event any grievance with the assessment remains to the petitioner, it shall be open for him to raise all the grounds including the grounds raised in this writ petition before the appellate authority. The parties for further proceedings pertaining to assessment, agreed to appear before the assessing authority on 17.4.2006. The interim order granted by this Court on 26.3.2006 stands vacated.
No order as to costs.
( GOVIND MATHUR ),J. kkm/ps.
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