M.p v. The Deputy Commissioner Of Income Tax, Company Circle Vi(3)

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 12.06.2014 CORAM: THE HONOURABLE MR. JUSTICE B.RAJENDRAN W.P. No.14951 of 2014 and M.P.No.1 of 2014 M/s.Smart Professional Services Pvt.LimitedA Private Limited Companyincorporated under the provisions of theIndian Companies Act, 1956rep.by its Director Mr.N.Manihaving its registered office atNo.41-44 KG Plaza, T-11General Patters RoadChennai 600 002. vs. 1. The Deputy Commissioner of Income Tax, Company Circle VI(3), 46, Mahatma Gandhi Road Chennai 600 034. .. Petitioner 2. The Commissioner of Income Tax (Appeals)-VI 46, Mahatma Gandhi Road Chennai 600 034. .. Respondents Prayer: Writ Petition filed under Article 226 of the Constitution of India, for the issuance of a writ of certiorarified Mandamus, to call for the records of 1[st] Respondent in AAMCS7314N/Com.Cir-VI(3)/2014-15 relating to the application made by the petitioner for stay of demand under Section 220(6) of the Income Tax Act, 1961; to quash the order dated 04.06.2014 rejecting the stay petition and to direct the first respondent to grant stay of demand relating to the assessment order for the assessment year 2011-12 pending disposal of the appeal before the second respondent. For Respondents : Mr.T.Pramod Kumar Chopda Standing Counsel for Income Tax Department O R D E R The writ petition has been filed to quash the order dated 04.06.2014 passed by the first respondent in AAMCS7314N/Com.Cir-VI(3)/2014-15 rejecting the stay petition and to direct the first respondent to grant stay of demand relating to the assessment order for the assessment year 2011-12 pending disposal of the appeal before the second respondent. 2. The petitioner company was incorporated with the object of investing in equity shares. For the assessment year 2010-11, the petitioner-company filed its return of income and the same was accepted by the first respondent. Similarly for the assessment year 2011-12, the petitioner filed its return. The case was selected for scrutiny and during the scrutiny proceedings, the petitioner company specifically pointed out that it was an investment company and investment was made only in two scrips. According to the petitioner during the assessment year there were sales and there were no trading of shares. However, the Assessing Officer/first respondent herein without appreciating the above facts, completed the assessment under Section 143(3) of the Income Tax Act, 1961 and determined the total and taxable turnover and demanded a sum of Rs.4,03,90,630/- as tax which include interest of Rs.1,11,51,300/-. As against the above assessment, the petitioner-company preferred appeal before the second respondent. Pending appeal, the petitioner filed a stay petition before the first respondent. However, the first respondent without affording any opportunity of being heard, rejected the stay petition and directed the petitioner to pay 50% of the total demand of Rs.4,03,90,630/- within a week's time and to produce the challans. Aggrieved over the said order, the present writ petition has been filed. 3. Learned counsel appearing for the petitioner would submit that the main appeal itself is posted for hearing on 17.06.2014 and the petitioner only pleads that some leniency could be shown in payment of the demanded tax. He would also submit that the petitioner is always ready and willing to get along with the appeal. 4. Learned Standing Counsel appearing for the Income Tax Department would submit that the impugned order passed is purely on the basis of the merits of the case and the authority had thought it fit to demand 50% of the total demand, which is very reasonable and correct. 5. Heard both sides and perused the records. 3. Learned counsel appearing for the petitioner would submit that the main appeal itself is posted for hearing on 17.06.2014 and the petitioner only pleads that some leniency could be shown in payment of the demanded tax. He would also submit that the petitioner is always ready and willing to get along with the appeal. 4. Learned Standing Counsel appearing for the Income Tax Department would submit that the impugned order passed is purely on the basis of the merits of the case and the authority had thought it fit to demand 50% of the total demand, which is very reasonable and correct. 5. Heard both sides and perused the records. 6. The appellate authority has entertained the appeal and posted the same for final hearing on 17.06.2014. Though the stay application has been summarily rejected by the first respondent, it is the discretion of the authority regarding the demand of percentage to be deposited. However, taking into consideration the petitioner's request that their business is not good and that they are not in a position to pay 50% as directed by the first respondent, there could be a slight modification to the order passed. 7. Accordingly, the petitioner is directed to pay 25% of the total tax demanded in two instalments and the first instalment of 15% shall be paid on or before 17.06.2014 and thereafter the balance 10% shall be paid on or before 15.07.2014. On such payment of 25% of the total tax demanded, there will be an order of stay till the disposal of the appeal. 8. With the above direction and observation, this writ petition is disposed of. No costs. Consequently, the connected miscellaneous petition is closed. 12.06.2014 Index : Yes/NoInternet: Yes/No vj2 To 1. The Deputy Commissioner of Income Tax, Company Circle VI(3), 46, Mahatma Gandhi Road Chennai 600 034. 2. The Commissioner of Income Tax (Appeals)-VI 46, Mahatma Gandhi Road Chennai 600 034. B.RAJENDRAN, J. vj2 W.P.No.14951 of 2014 12.06.2014