M.ravechandran v. The Principal Commissioner Of Income-Tax,Income Tax Department

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 14.02.2019 CORAM THE HONOURABLE DR.JUSTICE ANITA SUMANTH Writ Petition No.3670 of 2019andWMP.Nos.4025 & 4027 of 2019 M.Ravechandran ... Petitioner -vs- 1.The Principal Commissioner of Income-Tax,Income Tax Department, No.3, Gandhi Road, Salem. 2.The Assistance Commissioner of Income-Tax,OSD, Income Tax Department,Salem. 3.The Assistance Commissioner of Income-Tax,Circle-2(1), Income Tax Department,Salem. 4.The General Manager,Salem Steel Plant,Sarkar Kollapatty, Near Mohan Kumaramangalam Medical College, Salem – 636 013. .. Respondents Prayer:-PETITION filed under Article 226 of The Constitution ofIndia praying for the issuance of Writ of CertiorarifiedMandamus calling for the records relating to the impugned noticeunder Section 226(3) of the Income Tax Act, 1961 dated18.09.2018 and subsequent modified notice dated 09.11.2018 andissued to the fourth respondent by the 3[rd] respondent hereinrelating to the assessment year 2012-2013 and quash the same anddirecting the respondents 1 to 3 not to initiate any furtherproceedings for recovery of the disputed demand till thedisposal of the appeal before the 1[st] respondent. For Petitioner : Mr.D.Baskar For Respondents : Mr.A.P.Srinivas for R1 to R3. O R D E R This writ petition challenges attachment notices undersection 226(3) of the Income Tax Act, 1961 (in short the 'Act')dated 18.09.2018, subsequently modified by notice dated09.11.2018 issued to the General Manager, Salem Steel Plant,Sarkar Kollapatty, Salem directing the plant to recover 1/3 ofnet remittances made by it to the petitioner/assessee under theAct, towards Income Tax dues of the petitioner and remit thesame to the Income tax Department. 2. The petitioner is engaged in business of civil contractin the name and style of 'M/s.Deivaanai Engineering Company atMettur Dam, Salem. The returns filed by the petitioner for theassessment year 2012-13 was taken up for scrutiny under CASS bythe Assessing Officer and an assessment completed by order dated18.03.2015 making an addition of Rs.1,20,000/- to the incomeassessed by the petitioner. 3. Finding the assessment erroneous and prejudicial to theinterests of the Revenue, the Principal Commissioner of IncomeTax under section 263 of the Act set aside the same directingthe Assessing Officer to redo the assessment vide his orderdated 30.03.2017. Thereafter, the Assessing Officer, afterissuing notice and affording an opportunity of personal hearingto the petitioner, passed an order of assesment dated14.12.2017 raising a demand of Rs.46,12,390/- where the taxcomponent amounts to Rs.37,19,234/- and the balance interest.Aggrieved by the same, the petitioner has preferred an appealbefore the Commissioner of Income Tax (Appeals) along with apetition to condone the delay of 13 days in filing the same,which is still pending. 4. In the meantime, the third respondent has issued agarnishee order under section 226(3) of the Act dated 18.09.2018calling upon the Salem Steel Plant to deposit all amountspayable by it to the petitioner or held by it on behalf of thepetitioner. The petitioner appears to have made a request tothe Assessing Officer for a stay of the disputed demand citingfinancial difficulty and liquidity issues, upon consideration ofwhich, the order dated 18.09.2018 was partially modifieddirecting that the Salem Steel Plant to recover and remit onethird of net remittances made by the Plant to the petitioner. 5. Mr. D.Baskar, learned counsel for the petitioner statesthat the demand itself is disputed and is pending in appealbeforetheCommissionerofIncometax(Appeals).Mr.A.P.Srinivas, learned counsel for the respondents 1 to 3reports instructions received on behalf of the department to the 5. Mr. D.Baskar, learned counsel for the petitioner statesthat the demand itself is disputed and is pending in appealbeforetheCommissionerofIncometax(Appeals).Mr.A.P.Srinivas, learned counsel for the respondents 1 to 3reports instructions received on behalf of the department to the effect that the appeal filed by the petitioner is belated and apetition for condonation of delay in filing the appeal ispending before the CIT(Appeals). 6. Upon hearing the learned counsel and in the interests ofjustice, this Writ Petition is disposed of finally directing thepetitioner to remit a sum of Rs.10,00,000/- (Rupees Ten Lakhsonly) as against the total demand of Rs.46,12,390/- as per theorder of assessment dated 14.12.2017 under Section 143(3)r/w.263 of the Income Tax Act, 1961. 7. The amount shall be paid within a period of four (4)weeks from the date of the receipt of a copy of this order. Anyamount that has been remitted by the 4[th] respondent, the SalemSteel Plant, pursuant to notice dated 09.11.2018 issued by theAssistant Commissioner of Income Tax Circle-2(1) Salem shall begiven credit to in computing the aforesaid amount ofRs.10,00,000/-. Connected W.M.P is closed. No costs. Sd/- Deputy Registrar //True Copy// Sub Assistant Registrarrkp/slTo1.The Principal Commissioner of Income-Tax,Income Tax Department, No.3, Gandhi Road, Salem. 2.The Assistance Commissioner of Income-Tax,OSD, Income Tax Department,Salem. 3.The Assistance Commissioner of Income-Tax,Circle-2(1), Income Tax Department,Salem. +1cc to Mr.R.Thamarai Selvan, Advocate, S.R.No.13584+1cc to Mr.A.P.Srinivas, Advocate, S.R.No.13524 Writ Petition No.3670 of 2019andWMP.Nos.4025 & 4027 of 2019CS/19/02/2019