Syed Chagan Zuleikha Memorialtrust v. The Income Tax Officer, Ward 1(2)

In the High Court of Judicature at Madras The Honourable Mr.Justice V.RAMASUBRAMANIAN Writ Petition No.24730 of 2014 and MP.No.1 of 2014 Syed Chagan Zuleikha MemorialTrust...Petitioner Vs 1.The Income Tax Officer, Ward 1(2), No.121, 60 Ft.Road, Tirupur-641604. 2.The Commissioner of Income Tax-III, No.63, Race Course Road, Coimbatore-18. 3.The Commissioner of Income Tax (Appeals) II, No.63, Race Course Road, Coimbatore-18....Respondents PETITION under Article 226 of The Constitution of India prayingfor the issuance of a Writ of Certiorarified Mandamus to call for therecords on the file of the second respondent in C.No.317(2)/2014-15/CIT-III/CBE dated 1.9.2014, quash the same and direct the firstrespondent to treat the petitioner as not being in default of paymentof income tax of Rs.2,89,04,250/- during the pendency of the appealbefore the third respondent. For Petitioner : Mr.B.Sivaraman For Respondents : Mr.T.Pramod Kumar Chopda, Standing Counsel The petitioner has come up with the above writ petitionchallenging a condition imposed by the second respondent for thegrant of stay pending disposal of an appeal. 2. Heard Mr.B.Sivaraman, learned counsel for the petitioner.Mr.T. Pramod Kumar Chopda, learned Standing Counsel takes notice forthe respondents. https://hcservices.ecourts.gov.in/hcservices/ 3. The petitioner sold a property, on which, capital gains wereassessed. This led to an order of assessment, in which, theDepartment raised a demand for a sum of Rs.2,89,04,250/-. Thepetitioner filed a stay petition before the Assessing Officer in thefirst instance. However, the Assessing Officer rejected the staypetition. The petitioner again filed an application before theAssessing Officer for reconsideration. On the application forreconsideration, the Assessing Officer imposed a condition that thepetitioner should pay 50% of the demand. 4. Thereafter, the petitioner moved an appeal along with a staypetition, before the second respondent. Upon considering thefinancial crunch of the petitioner, while granting stay, the secondrespondent modified the condition imposed by the Assessing Officer,directing the petitioner to pay 25% of the demand. Not satisfied withthe deduction made by the second respondent, the petitioner is beforethis Court. 5. Citing the decisions of the Delhi High Court in Soul Vs.Deputy CIT [(2010) 323 ITR 305] and the Bombay High Court in NishithMadanlal Desai Vs. CIT [(2012) 345 ITR 545], the learned counsel forthe petitioner contended that once the financial crunch of thepetitioner is accepted, there is no justification for imposing acondition. Drawing my attention to the bank statement as on16.7.2014, the learned counsel for the petitioner contended that thepetitioner cannot pay the said sum. 6. I have carefully considered the above submissions. The casecannot come under the category of an unreasonably high pitchedassessment. But, the financial hardship of the petitioner has beentaken into consideration. Therefore, strictly speaking, the impugnedorder does not warrant any interference. 7. However, if we have a look at the fact that the petitioner isa public charitable trust and also if we have a look at the bankstatement, I do not think that the petitioner will be able to makepayment of 25% of the demand. 8. Therefore, the writ petition is disposed of modifying theimpugned order to the following effect : (i) The petitioner shall deposit 10% of the demand on or before30.9.2014; and (ii) in respect of the balance of 15% of the demand, thepetitioner shall furnish bank guarantee *on or before 15.10.14. Upon the petitioner complying with these two conditions, therewill be an interim stay pending disposal of the appeal before the*Third respondent. No costs. Consequently, the above MP is closed. *Corrected as per orderdated 23/9/2014 in WP.No.24730/14-s/d-Assistant Registrar(LA)Dated:09/10/2014 -s/d-Assistant Registrar(LA)Dated:12/09/2014 8. Therefore, the writ petition is disposed of modifying theimpugned order to the following effect : (i) The petitioner shall deposit 10% of the demand on or before30.9.2014; and (ii) in respect of the balance of 15% of the demand, thepetitioner shall furnish bank guarantee *on or before 15.10.14. Upon the petitioner complying with these two conditions, therewill be an interim stay pending disposal of the appeal before the*Third respondent. No costs. Consequently, the above MP is closed. *Corrected as per orderdated 23/9/2014 in WP.No.24730/14-s/d-Assistant Registrar(LA)Dated:09/10/2014 -s/d-Assistant Registrar(LA)Dated:12/09/2014 True CopySub-Assistant Registrar To 1.The Income Tax Officer, Ward 1(2),No.121, 60 Ft.Road, Tirupur-641604. 2.The Commissioner of Income Tax-III, No.63, Race Course Road,Coimbatore-18. *To be substituted the Order already despatched on 12/9/2014 3.The Commissioner of Income Tax (Appeals) II, No.63, Race Course Road, Coimbatore-18.+1 cc to M/S.Lakshmi Sriram Advocate sr.43151+1 cc to M/S.T.PramodKumar Chopda Advocate sr.45993 WP.NO.24730 OF 2014AND MP.NO.1 OF 2014 rsl(co)aa12/9/2014krd 10/10/2014