S.uma Shankar v. The Commissioner Of Income Tax, (Appeals) -18

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE Mr.JUSTICE T.S.SIVAGNANAM Writ Petition Nos.26862 & 26863 of 2017 &W.P.Nos.26848 and 26849 of 2017& S.Karthikeyan ... Petitioner in W.Ps.26862 & 26863 of2017 S.Uma Shankar ... Petitioner in W.Ps.26848 & 26849 of 2017 Vs 1. The Commissioner of Income Tax, (Appeals) -18 121, Mahatma Gandhi Road Nungambakkam Chennai- 600 034 2. The Deputy Commissioner of Income Tax Central Circle-III (i/c) Coimbatore 3. The Assistant Commissioner of Income Tax Central Circle – III 63, Race Course Road Coimbatore ... Respondents in all WritPetitions Prayer in W.P.Nos.26862 & 26863 of 2017: Writ Petition filedunder Article 226 of Constitution of India, to issue a Writ ofCertiorari calling for the records of the 1[st] respondent andquash the order vide PAN dated 14.09.2017. Prayer in W.P.Nos.26848 of 2017: Writ Petition filed underArticle 226 of Constitution of India, to issue a Writ ofCertiorari calling for the records of the 1[st] respondent andquash the order vide PAN dated 14.09.2017. Prayer in W.P.Nos.26849 of 2017: Writ Petition filed underArticle 226 of Constitution of India, to issue a Writ of https://hcservices.ecourts.gov.in/hcservices/ Certiorari calling for the records of the 1[st] respondent andquash the order vide PAN dated 14.09.2017. Heard Mr.B.Raveendran, learned counsel for the petitionersand Mr.A.P.Srinivas, learned standing counsel for therespondents. 2.The petitioners, two in number, have filed these writpetitions challenging four orders passed by the first respondentdated 14.09.2017 by which the first respondent has directed thepetitioner to pay 20% of the total demand for being entitled foran order of interim stay of the remaining amount, as computedunder the Assessment Orders for the years 2012-13 and 2014-15.Earlier, the petitioners S.Karthikeyan and Uma Shankar hadapproached this Court by filing W.P.Nos.22643 to 22646 of 2017challenging the orders dated 16.05.2017, which is a garnisheeorder for recovery of the tax payable by respective assessees.The said writ petitions were disposed of by common order dated24.08.2017 after taking into consideration that while staypetitions seeking stay of the tax as computed were pending, theAssessing Officer was not justified in issuing a notice underSection 226(3) of the Income Tax Act, 1961. The operativeportion of the order and directions issued is extractedhereunder: “3.Thus, considering the facts of the case, itwill be appropriate for the first respondent to passorder on the petition for stay of demand as the samehas been presented on 25.04.2016. In the meantime, ifthe petitioners are compelled to pay the tax asquantified in the order of assessment, the petitionfor stay of demand itself would become infructuous.Therefore, there will be a direction to the firstrespondent to consider the petitioners' petition forstay of demand dated 25.04.2016 and pass orders onmerits and in accordance with law, after affording anopportunity of personal hearing, as expeditiously aspossible, preferably within a period of four weeksfrom the date of receipt of a copy of this order.Till such time, the impugned notices shall be kept inabeyance.4.In fine, for the reasons stated above, the writpetitions are disposed of. No costs. Consequently,connected miscellaneous petitions are closed.”will be appropriate for the first respondent to passorder on the petition for stay of demand as the samehas been presented on 25.04.2016. In the meantime, ifthe petitioners are compelled to pay the tax asquantified in the order of assessment, the petitionfor stay of demand itself would become infructuous.Therefore, there will be a direction to the firstrespondent to consider the petitioners' petition forstay of demand dated 25.04.2016 and pass orders onmerits and in accordance with law, after affording anopportunity of personal hearing, as expeditiously aspossible, preferably within a period of four weeksfrom the date of receipt of a copy of this order.Till such time, the impugned notices shall be kept inabeyance.4.In fine, for the reasons stated above, the writpetitions are disposed of. No costs. Consequently,connected miscellaneous petitions are closed.” 3. Pursuant to the above direction, the first respondentissued notice dated 28.08.2017 to the petitioners directing themto appear for a personal hearing with regard to the staypetitions filed by them. The petitioner would contend thatthough the personal hearing was posted on 01.09.2017 at 11.30am,they received the notice only on 01.09.2017 much after the timefixed for the personal hearing. Subsequently, by representationdated 08.09.2017 the petitioner informed the first respondentthat they are awaiting the certified copy of the order in theearlier writ petitions and would appear as soon as the copy ofthe order is received. Subsequently, a fresh date was assignedfor hearing of the stay petition i.e., on 17.09.2017, on whichdate the petitioner's authorized representative appeared. Inpursuance thereof, the impugned order has been passed directingthe petitioner to pay 20% of the total demand, being conditionprecedent for grant of stay. The petitioner is aggrieved bysuch condition by stating that they did not have adequateopportunity to put forth their case and the first respondentought to have taken into consideration that the secondrespondent was solely guided by the third party evidence andcame to the conclusion that the petitioner has purchased theproperty for a lesser price. Further, the statement referred toby the second respondent does not implicate the petitioner inany manner and therefore, the assessment has been made based onpresumptions and assumptions. 4. I have heard the learned senior standing counsel for therespondents on the above submissions. 5. The contentions advanced by the petitioner with regard tothe merits of the assessment have to be agitated before theAppellate Authority in the pending appeals. All that isrequired to be seen is that pending disposal of the appeal, theinterest of revenue should be sufficiently safeguarded. 4. I have heard the learned senior standing counsel for therespondents on the above submissions. 5. The contentions advanced by the petitioner with regard tothe merits of the assessment have to be agitated before theAppellate Authority in the pending appeals. All that isrequired to be seen is that pending disposal of the appeal, theinterest of revenue should be sufficiently safeguarded. 6. The assessment itself was pursuant to a search andseizure operation. Statements have been recorded from the thirdparties. The second respondent concluded that there is grossundervaluation of the value of the property. In suchcircumstances, this Court is of the view that the petitionershould be put on stringent condition for being entitled to anorder of interim stay. Learned counsel for the petitionerplaced reliance on the decision of this Court in GMV Projects &Systems Vs. Assistant Commissioner of Income Tax, Circle 15(1)Chennai [2017] 84 Taxmann.com 14 (Madras). In the said case,the Court, while considering the correctness of the order passedin the stay petition, on facts was convinced that the entiredemand of tax should be stayed till the appeals are disposed of.As noticed before, the instant case is one of search and seizure and pertains to valuation of the property and certain recordswere relied on by the Assessing Officer to make the subjectassessment. Therefore, this Court is of the view that thepetitioners should be put on condition for being entitled togrant of stay. It is submitted by the learned counsel thattotal tax liability in respect of the four petitioners isRs.3,03,28,295/- and interest of revenue would be safeguarded if15% of the tax demand is directed to be paid by the petitioners.15% of the said amount works out to Rs.45,49,244/- out of which8 lakhs has already been recovered. Hence, there will be adirection to the petitioners to pay Rs.37,49,244/- for beingentitled to a grant of stay. The payment shall be effected inone lump sum or installments within a period of 12 weeks fromthe date of receipt of a copy of this order. These writ petitions are disposed of with the abovedirections. No costs. Consequently, the connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS VI) //True Copy// gpaTo Sub Assistant Registrar 1. The Commissioner of Income Tax, (Appeals) -18 121, Mahatma Gandhi Road Nungambakkam, Chennai- 600 034 2. The Deputy Commissioner of Income Tax Central Circle-III (i/c) Coimbatore 3. The Assistant Commissioner of Income Tax Central Circle – III 63, Race Course Road Coimbatore +1cc to Mr.B.Raveendran, Advocate, S.R.No.75055+1cc to Mr.A.P.Srinivas, Advocate, S.R.No.75431Writ Petition Nos.26862 & 26863 of 2017 &W.P.Nos.26848 and 26849 of 2017 &W.P.M.P.Nos.28605, 28606, 28583 and 28584 of 2017 PVS(CO)CA(07/11/2017)