1996 Supreme(Raj) 995
RAJASTHAN HIGH COURT
Anshuman Singh, J.
His Late Highness Maharana Shri Bhagwat Singhji of Mewar - Appellant
Versus
Income Tax Appellate Tribunal Jaipur Bench Jaipur and Others - Respondent
S.B. Writ Petition No. 1936 of 1996.
Decided On : 26-04-1996
For the Petitioner:N.M. Ranka, Sr. Advocate with J.K. Ranka and Rajkumar Yadav, Advocates.
For the Respondent: None.
Circulars issued by the CBDT are binding on the authorities exercising powers under the taxing statute and have sufficient force of law.
Headnote:
ESTATE DUTY ACT, 1953 - SECTION 59 - ESTATE DUTY - STAY OF RECOVERY - CIRCULAR NO. 96/F. NO. 1/6/69 (ITCC) DATED 21ST AUG., 1969 - BINDING NATURE - APPLICABILITY - INCOME DETERMINED ON ASSESSMENT SUBSTANTIALLY HIGHER THAN RETURNED INCOME - RECOVERY OF TAX IN DISPUTE TO BE HELD IN ABEYANCE TILL DECISION OF APPEALS.
Fact of the Case:
The petitioner, an executor of the will of the late Maharana of Mewar, challenged the Tribunal's order directing him to deposit 25% of the outstanding estate duty and wealth tax demand for the assessment years 1985-86 to 1990-91 and 1992-93. The petitioner argued that the Tribunal erred in not staying the entire impugned tax and that the circular issued by the CBDT on 21st Aug., 1969, which directed that the recovery of tax in dispute be held in abeyance till the decision of appeals where the income determined on assessment was substantially higher than the returned income, was binding on the Tribunal.
Finding of the Court:
The court held that the circular issued by the CBDT on 21st Aug., 1969, was binding on the Tribunal and that the petitioner had made out a case for staying the entire impugned tax involved in the appeals pending before the Tribunal. The court further held that the Tribunal erred in not considering the judgments of various High Courts cited by the petitioner and in ignoring the law laid down by the apex Court and various other High Courts.
Issues: 1. Whether the circular issued by the CBDT on 21st Aug., 1969, was binding on the Tribunal? 2. Whether the petitioner had made out a case for staying the entire impugned tax involved in the appeals pending before the Tribunal?
Ratio Decidendi: 1. The court held that the circular issued by the CBDT on 21st Aug., 1969, was binding on the Tribunal. The court relied on the judgments of various High Courts, including the Division Bench of this Court, which had held that circulars issued by the CBDT were binding on all officers of the IT Department and that benevolent circulars were in the nature of administrative relief and assisted the assessee. 2. The court held that the petitioner had made out a case for staying the entire impugned tax involved in the appeals pending before the Tribunal. The court noted that the income determined by the authority was much more than twice the returned income and that the petitioner had cited catena of judgments rendered by Kerala High Court, Madhya Pradesh High Court and Division Bench of this Court, which supported his contention.
Final Decision: The court directed that the recovery of the entire impugned tax involved in all the appeals pending before the Tribunal should remain stayed till the disposal of the appeals and that the petitioner should not be forced to deposit 25% of the impugned tax.
JUDGMENT
1. - This petition under Article 226 of the Constitution of India is directed against the order dated 18th March, 1996 passed by the Tribunal, Jaipur Bench Jaipur on Stay Applications Nos. 18 and 19/Jp/1996 arising out of EDA No. 1/Jp/96 and WTA No. 6 to 12/Jp/1996 for the asst. yrs. 1985-86 to 1990-91 and 1992-93 directing the petitioner to deposit 25% of the outstanding demand payable under the ED Act and WT Act for the years under appeal on or before 30th April, 1996. The recovery of the balance outstanding demand under both the Acts for the years under appeal has been stayed till the disposal of appeals by the impugned order. The present petition came up for admission on 18th April, 1996. However, on the request of the learned counsel for the petitioner it was ordered to be listed on 19th April, 1996. In view of the fact that the Tribunal itself directed the appeals to be fixed for hearing in the second week of May, 1996 it was thought proper to dispose of the petition finally at the admission stage itself. Since, the matter was proposed to be finally disposed of, the learned counsel for the petitioner was directed to supply a copy of the petition to Mr. G.S. Bapna, Standing Counsel for the Revenue, in order to give opportunity to the Revenue to oppose the writ petition. Mr. N. M. Ranka, learned counsel for the petitioner, made a statement in Court that Mr. G.S. Bapna who was earlier counsel for the Revenue has resigned. It was stated that in his place Mr. Virendra Dangi has been appointed and as such, the learned counsel for the petitioner was directed to approach Mr. Virendra Dangi who too informed the learned counsel for the petitioner that he had also resigned. It is unfortunate that there is no standing counsel to represent the Revenue at Jaipur Bench in cases filed against Revenue. In view of the said fact, the Court is left with no option but to proceed to decide the case on the basis of the submissions made on behalf of the petitioner. After hearing the argument of the learned counsel for the petitioner orders were reserved and in the meantime an additional affidavit has been filed on 24th April, 1996 by the petitioner by means of which, he wanted the papers annexed to the aforesaid additional affidavit to be brought on record and also the facts to be considered stated in the additional affidavit. It has been averred that after the hearing of the petition was over the petitioner received a rectification order and two letters which he has filed along with the additional affidavit. I have perused the contents of the additional affidavit and I am of the opinion that the facts contained in the affidavit and the documents annexed thereto are relevant for the decision of the case and as such, the additional affidavit is ordered to be placed on record. Before dealing with the submission raised on behalf of the petitioner, it is necessary to narrate the relevant facts of the case, which runs as under :That Maharana Shri Bhagwat Singhji of Mewar, former ruler of the State of Mewar, died on 3rd Nov., 1984. His Late Highness Maharana Bhagwat Singh, son of His Late Highness Maharana Bhupal Singh, Udaipur left the last will dated 15th May, 1984 and appointed (i) Shri Arvind Singh of Mewar, son of His Late Highness; and (ii) Shri A. Subramaniam son of Shri T. S. Appu Aiyer, as executors of the said will. The executors made petition for probate in the Rajasthan High Court at Jodhpur which was registered as S. B. Testamentary Case No. 1/85. The probate of the will was granted by this Court on 13th Nov., 1987 and the certificate dated 15th Feb., 1992 was issued in favour of the executors by the Registrar of this Court. The executors have undertaken to administer the same and make full and true inventory of the said property and credits and exhibit the same in the Court within six months from the date of grant as also to render to the Court a true account of the said property and credits. Thereafter, Rajmata Sushila Kumari
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