ORDER This petition has been filed, challenging the order of Chief Commissioner (Admn.), U.P./Commissioner of Income-tax, Lucknow dated 29-3-1985.
2. A notice under section 263 of the Income Tax Act was issued for enhancing the tax on the ground that the petitioner had been awarded and had received compensation towards the acquisition of his plot under the Land Acquisition Act by way of enhancement by the order dated 28-12-1979 in the assessment year 1980-81.
2. A notice under section 263 of the Income Tax Act was issued for enhancing the tax on the ground that the petitioner had been awarded and had received compensation towards the acquisition of his plot under the Land Acquisition Act by way of enhancement by the order dated 28-12-1979 in the assessment year 1980-81.
3. A reply was submitted by the petitioner. The Chief Commissioner (Admn.) /Commissioner of Income-tax, Lucknow after considering the plea raised by the petitioner, however, came to the conclusion that the petitioner was liable to make payment of income-tax on the interest awarded and paid in that very year for which the assessment was made and the payment was received. The plea of the petitioner that the interest received by him be bifurcated on accrual basis with effect from the assessment years 1973-74 to 1980-81 was not found to be in consonance with the provisions of the Act by the Chief Commissioner of Income-tax.
3. A reply was submitted by the petitioner. The Chief Commissioner (Admn.) /Commissioner of Income-tax, Lucknow after considering the plea raised by the petitioner, however, came to the conclusion that the petitioner was liable to make payment of income-tax on the interest awarded and paid in that very year for which the assessment was made and the payment was received. The plea of the petitioner that the interest received by him be bifurcated on accrual basis with effect from the assessment years 1973-74 to 1980-81 was not found to be in consonance with the provisions of the Act by the Chief Commissioner of Income-tax.
4. Various authorities were cited before the Commissioner of different High Courts including of Madras High Court wherein such spread over was permitted. The Madras High Court in the case of CIT v. Q.K.S. Murugappan 1987 ITR 22 (sic) held as follows:
4. Various authorities were cited before the Commissioner of different High Courts including of Madras High Court wherein such spread over was permitted. The Madras High Court in the case of CIT v. Q.K.S. Murugappan 1987 ITR 22 (sic) held as follows:
"that the entire interest income so received should be divided proportionately in the different years from the date of acquisition till the date of judgment."
5. Chief Commissioner however did not rely upon the said judgment on the ground that the department has preferred an SLP against the said judgment which is pending. The observations of the Commissioner give curious reading which are as under:
5. Chief Commissioner however did not rely upon the said judgment on the ground that the department has preferred an SLP against the said judgment which is pending. The observations of the Commissioner give curious reading which are as under:
"However, since appeal against the similar order of Madras High Court is sub judice before the Hon'ble Supreme Court as stated above, the decisions of various High Courts are still open to doubt."
6. We would like to put a word of caution that the Administrative Tribunals or quasi-judicial Tribunals upon whom judgments of the High Court are binding cannot opt for not following such decisions rendered by the High Court by calling them doubtful, if an SLP has been preferred before the Supreme Court.
6. We would like to put a word of caution that the Administrative Tribunals or quasi-judicial Tribunals upon whom judgments of the High Court are binding cannot opt for not following such decisions rendered by the High Court by calling them doubtful, if an SLP has been preferred before the Supreme Court.
7. The aforesaid judgment of the Madras High Court in CIT v. Q.K.S. Murugappan 1987 ITR 22 has been upheld by the Supreme Court in its order dated 12-2-1987: CIT v. T.N.K. Govindarajulu Chetty (1987) 165 ITR 231 wherein the Apex Court has held that such a spread over in the respective years to the extent can be allowed particularly when the mercantile system of the account has been the basis on which the interest income accrued. In this case there is specific averment in paragraph 10 of the writ petition that the petitioner has been maintaining his accounts according to the mercantile system and if after due notice upon the department in the year 1985 itself, the department has not chosen to file counter-affidavit to rebut the averments made in the writ petition, we have no reason to disbelieve the averments made by the petitioner.
7. The aforesaid judgment of the Madras High Court in CIT v. Q.K.S. Murugappan 1987 ITR 22 has been upheld by the Supreme Court in its order dated 12-2-1987: CIT v. T.N.K. Govindarajulu Chetty (1987) 165 ITR 231 wherein the Apex Court has held that such a spread over in the respective years to the extent can be allowed particularly when the mercantile system of the account has been the basis on which the interest income accrued. In this case there is specific averment in paragraph 10 of the writ petition that the petitioner has been maintaining his accounts according to the mercantile system and if after due notice upon the department in the year 1985 itself, the department has not chosen to file counter-affidavit to rebut the averments made in the writ petition, we have no reason to disbelieve the averments made by the petitioner.
8. Before parting we would like to meet the objections of learned counsel for the Income-tax department, Mr. D.D. Chopra that the petitioner had a remedy of appeal against the impugned order and without availing the statutory remedy of filing an appeal the present writ petition has been filed, which should be dismissed on the ground of availability of alternative remedy. Writ petition was filed in the year 1985 after the notice to the Income-tax department, an interim stay order was passed on 8-5-1985, which is still in force. The court has, thus applied its mind and had entertained the writ petition by giving time to the respondent to file counter-affidavit and by passing an interim order. The writ petition which is pending for the last more than 19 years in which an interim order is also continuing in favour of the petitioner and against the department, therefore, it would not be appropriate to dismiss such writ petition on the ground of availability of alternative remedy.
8. Before parting we would like to meet the objections of learned counsel for the Income-tax department, Mr. D.D. Chopra that the petitioner had a remedy of appeal against the impugned order and without availing the statutory remedy of filing an appeal the present writ petition has been filed, which should be dismissed on the ground of availability of alternative remedy. Writ petition was filed in the year 1985 after the notice to the Income-tax department, an interim stay order was passed on 8-5-1985, which is still in force. The court has, thus applied its mind and had entertained the writ petition by giving time to the respondent to file counter-affidavit and by passing an interim order. The writ petition which is pending for the last more than 19 years in which an interim order is also continuing in favour of the petitioner and against the department, therefore, it would not be appropriate to dismiss such writ petition on the ground of availability of alternative remedy.
9. A Division Bench of this court in the case of R.P. Pandey v. U.P. Power Corpn. Ltd. 2004 (22) LCD 20 has taken the view that while considering as to whether the petition should be dismissed on the ground of alternative remedy at the time of hearing or not one more aspect of the matter which require consideration is as to when the petition was filed what orders have been passed by the court and the period of pendency of the petition before the High Court.
9. A Division Bench of this court in the case of R.P. Pandey v. U.P. Power Corpn. Ltd. 2004 (22) LCD 20 has taken the view that while considering as to whether the petition should be dismissed on the ground of alternative remedy at the time of hearing or not one more aspect of the matter which require consideration is as to when the petition was filed what orders have been passed by the court and the period of pendency of the petition before the High Court.
10. We, therefore, do no find justification to relegate the petitioner to the remedy of filing an appeal and we see that no fruitful purpose would be served in extending the proceeding any further.
10. We, therefore, do no find justification to relegate the petitioner to the remedy of filing an appeal and we see that no fruitful purpose would be served in extending the proceeding any further.
11. For the reasons stated above, the impugned order dated 29-3-1985 passed by Chief Commissioner (Admn.), U.P. and Commissioner of Income-tax, Lucknow, is set-aside and the writ petition is allowed.
11. For the reasons stated above, the impugned order dated 29-3-1985 passed by Chief Commissioner (Admn.), U.P. and Commissioner of Income-tax, Lucknow, is set-aside and the writ petition is allowed.