CIT vs. Shri Girija Smelters (P) Ltd (Andhra Pradesh High Court)

COURT:
CORAM: ,
SECTION(S):
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COUNSEL:
DATE: October 29, 2014 (Date of pronouncement)
DATE: November 14, 2014 (Date of publication)
AY: 1988-89 to 1997-98
FILE: Click here to download the file in pdf format
CITATION:
An ITO cannot carry out the functions of an authority under the Central Excise Act and arrogate to himself the power to determine the quantity of production, or the intricacies of the manufacturing process. He must seek assistance of the concerned authority

(i) Even where the authorities of the Central Excise Department doubt the accuracy of figures mentioned in the registers, or if they find it difficult to understand the complexity of the manufacturing process, they seek the help of the experts. Sometimes experts are on the rolls of the department itself, and on the other occasions, the service of experts outside the department are availed. The Assessing Officer under the Act can certainly look into various records of the assessee, to satisfy himself about the correctness of the facts and figures, or to come to his own conclusions about the income of the assessee. If it is a case of mere verification of books of account, or the registers that reflect the sale of any product, the Income Tax Officer can undertake the exercise by himself. Where, however, he entertains a doubt about the correctness of the facts and figures that are mentioned in the registers, which are required to be maintained under the Central Excise Act or the Rules made thereunder, the proper course for him would be to take the assistance of the concerned authority under the Central Excise Act. Howsoever anxious or willing he may be to verify the registers, by himself, outcome of the exercise may not be accurate. Just a Superintendent of Central Excise Department, cannot be expected to verify the correctness of the income tax returns, submitted by a manufacturer, it is not at all safe for any Income Tax Officer to undertake verification of the records referable to the department of Central Excise. Unfortunately, this is what exactly has happened in the instant case. A perusal of the order of assessment discloses that the Assessing Officer did not feel any inhibition to express his views on a matter, which does not genuinely fall in his purview. In a way, he has undertaken certain activity, which a Superintendent of Excise Department would have hesitated.

(ii) An Income Tax Officer cannot carry out the functions of an authority under the Central Excise Act and arrogate to himself the power to determine the quantity of production, or to utter a final word on the intricacies of the manufacturing process, that too, without referring to any reliable material. The Assessing Officer, in the instant case, was totally unsuited for undertaking the activity of determining the exact production of the material, which itself involves very complicated procedures.

2 comments on “CIT vs. Shri Girija Smelters (P) Ltd (Andhra Pradesh High Court)
  1. today AOs of income tax issue bad in law 143(2) notice without taking into cognizance of sec 143(2)(ii) a jurisdictional limitation on return of income but the AO even goes further u/s 144 and used penalty illegally u/s 271(1)(c), so he seems to think he is a super judge, when it is obvious when his very basic sec.143 notice is bad in law and when so how he can go ahead with sec 144 notice worse still when he imposes penalty illegally u/s 271(1)(c), obviously these these things fall squarely under Wednesbury principle of unreasonableness that means any tribunal just can set aside the very 143 Notice as also sec 144 notice read with sec 271(1)(c) illegal penalty the AO applied, after all even any public servant is to follow his duties and obligations under Art 51A of the constitution of india.

  2. what legislature intention is different and CBDT circular on scrutiny matters is mandatory on AOs, when so without jurisdiction on the return concerned when AO goes on, do we think he would not be extrajudicial in central excise matter?

    the intensity of anxiety of collecting taxes for revenue he functions illegally that way he subjects himself for vicarious liability based liquidated damages the tax payer can move against the officer as also the revenue, why even union of india, i think soon Apex courts would indeed punish such illegal actions perpetrated by AOs who are just some accounts man certainly not a great legal luminary ; even if he is as AO he is not a court of justice!

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