Cit Vs. S. Ramanathan - Court Judgment

Excerpt:
counsels: t.c.a. ramanujam, for the revenue in the madras high court v.s. sirpurkar & n.v. balasubramanian, jj. - t.n. estates (abolition & conversion into ryotwari) act, 1948 [act no. 26/1948]. sections 5(2) & 67; [a.p. shah, cj, mrs. prabha sridevan & p. jyothimani, jj] suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. -- t.n. estates (abolition & conversion into ryotwari) act, 1948. sections 5(2) & 67; suo motu revisional powers held, on a bare reading of the provisions of section 5(2) of the act, it is clear that the power conferred on the director by section 5(2) to cancel or revise any of the orders, acts or proceedings of the settlement officer is very wide. in the first place, the director need not necessarily be moved by any party in that behalf, and the power could be exercised either on an application by an aggrieved person or suo motu. for example, if the director comes to know that contrary to the scheme of the act or due to misrepresentation or fraud played, a patta had been granted to a person under the relevant provisions of the act, then to set right that mistake, the director should be enabled to exercise his power so as to effectuate the scheme of the act and to implement the purpose behind the act. the fact that the rule making authority has prescribed procedure in exercise of the powers under section 67 for making an application to the director does not mean that the suo motu power which is explicit in section 5(2) of the act is in any way curtailed or taken away. therefore, the contention of the respondent that making an application is sine qua non for invoking the power under section 5(2) of the act is not tenable. orderv.s. sirpurkar, j.the questions referred to us at the instance of the revenue are as follows :'1. whether the tribunal was right in law in holding that the interest of rs. 79,739 due to mercantile credit corpn. is allowable as an expenditure under section 57(iii) of the income tax act, 1961 ?2. whether the tribunal was right in law in holding that the interest would constitute an expenditure, even though the shares were not allotted to the assessee and there was no income available for consideration ?'2. at the outset, the learned senior standing counsel for the department makes a statement that these questions are covered against the revenue by a decision of this court in the case of cit v. p.l. ramiah : [2002]254itr238(mad) . since a fair statement comes from the revenue against its own interest, there will be no necessity to hear the assessee in whose favour the order would naturally go. the questions are, therefore, answered in favour of the assessee and against the revenue. no costs.

Judgment:
ORDER

V.S. Sirpurkar, J.

The questions referred to us at the instance of the revenue are as follows :

'1. Whether the Tribunal was right in law in holding that the interest of Rs. 79,739 due to Mercantile Credit Corpn. is allowable as an expenditure under section 57(iii) of the Income Tax Act, 1961 ?

2. Whether the Tribunal was right in law in holding that the interest would constitute an expenditure, even though the shares were not allotted to the assessee and there was no income available for consideration ?'

2. At the outset, the learned senior standing counsel for the department makes a statement that these questions are covered against the revenue by a decision of this court in the case of CIT v. P.L. Ramiah : [2002]254ITR238(Mad) . Since a fair statement comes from the revenue against its own interest, there will be no necessity to hear the assessee in whose favour the order would naturally go. The questions are, therefore, answered in favour of the assessee and against the revenue. No costs.