Haryana State Pollution Control Board, Panchkula! v. The Commissioner Of Income Tax, Panchkula & Others

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP? No.23497 of 201Date of decision:09.03.2015 Haryana State Pollution Control Board, Panchkula! — Petitioner Versus The Commissioner of Income Tax, Panchkula & others......Respondents CORAM:HON'BLE MR.JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICEHON'BLE MR.JUSTICE G.S.SANDHAWALIA Present:Mr.Sandeep Goyal, Advocate, for the petitioner. Mr.T.K.Joshi, Advocate, for the respondents-Department. 0000 S.J.Vazifdar, Acting Chief Justice(Oral): The petitioner has challenged the respondents’ action, attachingsix bank accounts, appropriating the amounts therefrom for its payments ofthe penalty levied, under the provisions of the Income Tax Act, 1961 (forShort, the 'Act’). The petitioner is a Government of Haryana undertaking. Itreceives grants from the Central Government and from the State Government.The same are used for the purpose of discharging its statutory functions andduties. The respondents contend that the petitioner had not obtainedexemption under Section 10(23C)(iv) and registration under Section 12AA ofthe Act and as a result thereof, they are not entitled to the exemption that theyare claiming. There are proceedings, therefore, pending in respect of therefusal of exemption under Section 10(23C)(iv) of the Act. In the event ofSAILESH RANJAN2015.03.11 10:52the petitioner succeeding in those proceedings there is a possibility that theI attest to the accuracy andintegrity of this document entire demand including for the principal amount will be set aside. By an order dated 21.01.2015, a Division Bench of this Courtexpressed the hope that the petitioner's appeal before the CIT (Appeals)would be decided by the next date of hearing. The same is still pending. The tax dues have already been paid. In addition thereto,pursuant to the attachment of the accounts, an amount of about411.27 croreshas already been appropriated by the respondents-Department against ademand of|=51 crores towards interest. The petitioner had, thereafter, filed anapplication for stay on 10.11.2014 before the CIT (Appeals). The same wasrejected on the very same date, without affording the petitioner a hearing. Onthe same day, the Banks were called upon to pay the amount lying to thecredit of the petitioner with the respondents, Thus, the petitioner's stay application has not been appropriatelyconsidered. The only ground on which it was rejected is that the pendency ofthe appeal is not a ground for granting the stay. The pendency of the appealwas, however, not the only ground on which the stay was sought. There areseveral other factors including the constitution of the petitioner and the natureof its functions it is carrying out under the statute. — Two drafts amounting to=A crores and =18 crores, we have beeninformed, have been prepared by the Bank tor payment to the Department butthe respondents have been restrained from withdrawing the same, by theinterim order passed by this Court on 17.11.2014. To allow the drafts toremain in operation would not enure to the benefit of either of the parties asthe interest would stop running from the date on which they have beenprepared. The Bank shall, therefore, cancel the drafts and credit the same tothe account of the petitioner. We are, however, not inclined to entertain the prayer for refundof the amount of aboutL11.27 crores, at this stage. The same must await thedecision of the appeal before the CIT(Appeals), In these circumstances and especially considering the fact thatthe petitioner is a statutory Corporation and receives grants also from theCentral Government, it would be proper that no coercive action is takenagainst the demand of penalty till the decision of the appeal before the CIT(Appeals). The petitioner shall not seek any adjournment on any groundbefore the CIT (Appeals). The writ petition is, accordingly, disposed of, (S.J.Vazifdar)Acting Chief Justice 09.03.20153')7130 (G.S.Sandhawalia)Judge