A.hariharan v. The Commissioner Of Income Tax(Appeals), Madurai

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED :25.09.2015 CORAM THE HONOURABLE MR.JUSTICE R.SUBBIAH W.P(MD).No.12875 of 2015andM.P(MD)Nos.1 and 2 of 2015 A.Hariharan ...Petitioner Vs.1.The Commissioner of Income Tax(Appeals), Madurai. Madurai. 2.The Commissioner of Income Tax, Madurai. Madurai. 3.The Joint Commissioner of Income Tax, Tuticorin. Tuticorin. 4.The Deputy Commissioner of Income Tax, Tuticorin. Tuticorin. 5.The Income Tax Officer, Ward I, Tuticorin. ...Respondents Ward I, Tuticorin. ...Respondents Prayer : This Writ Petition has been filed under Article 226 of theConstitution of India praying for a Writ of Mandamus forbearing therespondents from insisting to pay the tax amount demanded in the impugneddemand notice, dated 03.06.2015 until the disposal of the appeal pendingbefore the first respondent. For R-1 & R-2 : Mr.R.Krishnamoorthy ORDER The Writ Petition has been filed praying for a Writ of Mandamusforbearing the respondents from insisting to pay the tax amount demandedin the impugned demand notice, dated 03.06.2015 until the disposal of theappeal pending before the first respondent. 2. In the affidavit it has been averred that the petitioner isengaged in the business of logistics and he is the Proprietor ofM/s.Hari Logistics and he is an assessee as an individual and M/s.HariLogistics is assessed to tax separately. The petitioner filed return ofhttps://hcservices.ecourts.gov.in/hcservices/income for the assessment year 2012-2013 on 06.12.2012 admitting a totalincome of Rs.78,86,740/-. The return was taken up for scrutiny under “CASS” and the Deputy Commissioner of Income Tax, Central Circle-I,Madurai had issued a notice under Section 143(2) on 24.09.2013 andpersonal hearing was given to the petitioner and after hearing thepetitioner, the fifth respondent has passed an order, dated 31.03.2015.In the said order, the respondent has disallowed the payments to the tuneof Rs.9,74,03,552/- made as “taxes and duties” payable under section 40(a)(ia)oftheActandfurtherdisallowedRs.6,54,144/- under Section 43B and Rs.10,50,979/- under depreciation.Therefore,thetotaldisallowanceistothetuneofRs.9,91,08,675/- and tax liability along with interest under Section 234Bis to the tune of Rs.4,25,42,870/-. Aggrieved over the assessment orderpassed under Section 143(3) of the Income Tax Act, the petitionerpreferred an appeal before the first respondent under Section 246A of theAct. The petitioner has also filed a stay petition in that appeal.While the appeal is pending and the adjudicatory process is yet to becompleted, the fifth respondent has issued the impugned demand notice,dated 03.06.2015 demanding to pay 50% of the demanded tax. Since thepetitioner has a statutory right under the Income Tax Act to exhaust allthe adjudicatory avenues prescribed under the Act, until the completionof proceeding under the Act, the petitioner cannot be forced to pay ahuge amount while considering the stay petition. For that, thepetitioner sent a letter to the third respondent, dated 19.06.2015requesting to stay the demand of tax until the disposal of the appeal.However, the fourth respondent is demanding the huge amount ofRs.2,12,71,435/- being 50% of the demanded tax in order to consider thestay application. The petitioner is not in a position to pay 50% of thedemanded tax amount. Hence, the petitioner has filed the present Writpetition for the above stated relief. 3. This Court vide order dated 27.07.2015 granted stay in M.P(MD)No.1of2015.TherespondentshavealsofiledM.P(MD)No.2 of 2015 to vacate the said interim order stating that thepetitioner was asked to pay Rs.2,12,71435/- being 50% of the demand inthe light of Board's Instruction No.1914, dated 02.12.1993 andInstruction in F.No.404/100/2009-ITTCC, dated 01.12.2009. Further, thepetitioner has not exhausted all the legal remedies available to him inthe Department and he has not put forth any valid reason fornon-payment of tax or to grant of collection of demand. 4. When the matter is taken up for consideration, the learned counselfor the petitioner submitted that the petitioner is not in a position topay the huge amount of Rs.2,12,71,435/- and the act of the respondents isscuttling the petitioner's statutory right of appeal and therefore, therespondents should be restrained from making a demand of tax amount untilthe disposal of the appeal. 5. Heard the learned counsel appearing for the petitioner and thelearned counsel appearing for the respondents 1 and 2 and perused thematerials available on record. 6. Considering the submissions made on either side, this Court isconstrained to pass the following order: https://hcservices.ecourts.gov.in/hcservices/ Without going into the merits of the averment made in the WritPetition, this Court directs the petitioner to pay a sum of Rs.50,00,000/- with the respondents within a period of four weeks fromthe date of receipt of a copy of this order and on such payment,respondents are directed to dispose of the appeal filed by the petitioneron merits and in accordance with law by affording an opportunity ofhearing to the petitioner, within a period of four weeks thereafter. With the above direction, the Writ Petition is disposed of.No Costs. Consequently, connected miscellaneous petitions are closed. Sd/-Assistant Registrar (CO) /True Copy/ Sub Assistant Registrar pmTo 1.The Commissioner of Income Tax(Appeals), Madurai. 2.The Commissioner of Income Tax, Madurai. 3.The Joint Commissioner of Income Tax, Tuticorin. 4.The Deputy Commissioner of Income Tax, Tuticorin. 5.The Income Tax Officer, Ward I, Tuticorin. +1CC to Mr.R.Krishnamoorthy Advocate Sr.No.56810+1CC to S.M.S.Johnny Basha Advocate Sr.No.56849 GJM/SKS/RR/12.10.15-2P-8C W.P(MD).No.12875 of 2015 25.09.2015