The Petitioner And Some Theatre Operators In The Entire Ccuntry v. Anand Theatre 124 Ltrl92L, Supra, While Deciding The

{ HIGH COURT FOR THE STATE OF TELANGANA (Special Original Jurisdiction) IVONDAY, THE TWENTY EIGHTH DAY OF AUGUSTTWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHYAND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA WRIT PETITION NO: 5667 OF 2005 Between: lvl/s. Prasad Film Laboratories Pvt. Ltd., L.V [Prasad Marg, ][Banjara ][Hills,]Hyderabad, rep by its General Manager, Shrr [Vellanki ][Nagineedu] ...PETITIONER AND 1The Commissioner of lncome [Tax-1 ], Aayakar [Bhavan, ][Basheerabagh,]Hyderabad - 500 001.Hyderabad - 500 001. 2The Asisstant Commissioner of lncome Tax, Circle [13(1), Hyderabad.] ...RESPONDENTS Petition under Article 226 of lhe Constitution [of ][lndia praying ][that ][in ][the]circumstances stated in the affidavit [filed ][therewith, ][the ][High Court ][may ][be]pleased to pass an order or orders or writ [particularly ]one in the nature of [Writ ][of]Certiorari and quash the [proceedings ]of the 1st [respondent ][in]F.No.ClT/Hyd.t122O(2)t32(1 to 3)/04-05 [dated ]['12-10-2004 ][to ][the ][extent ][of ][the]demand raised under section 220(2) of the [lncome ][Tax ][Act, from the due date ][of]notice under section 156 for assessment [years ]['l ][994-95, ][1995-96 ][& ][1996-97 ][as]illegal, arbitrary, without [jurisdiction ]and violative of [Article ][14 ][and ][3004 ][of ][the]Constitution of lndia. l.A. NO: ['l ]OF 2005[(WPMP. ]NO: 7494 OF[ 2005)] Petition under Section 151 CPC [praying ][that in ][the ][circumstances ][stated]in the affidavit filed in support of the [petition, ][the ][High ][Court ][may ][be pleased ][to] { stay all further proceedings of the 1strespondentINF. No. C I T( Hyd - 1 ) I 220 (2)32( 1 to 3 )/O4-05 d ate d 1 2- 1 O -2OO 4. Counsel for the Petitioner: SRI CHALLA GUNARANJAN Counsel for the Respondents: SRI J.V.PRASAD The Court made the following: ORDER f THE HON'BLE SRI JUSTICE P.SAM AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA WRIT PETITION No.5667 of [2OOS] ORDER..-er Hon'ble Sri Justice P.SAM KOSHY) The order under challenge in thc [prcscnt ][\\'rit]pctition is the one which is passed on [12.O2.2004 ][by ][thc]Commissioner o[ Income Tax, Hyderabad-I, [under]Section 22O (21 of the Income Tax Act, [196 ][1.]2. Hcard Sri Challa Gunaranjan, [iezri:ned ][counsel ][lor]the petitioner and Sri J.V. Prasad, learned [counsel ][for]the respondents-Department. 3. Vide the said impugned order, [thc ][Commissioner]of Incorne Tax has raised a demand [of ][payment ][of]intcrest levied under Section 22O [(21 ]of [the ][Income ][Tax]Act, 1961, for the assessment years [1994-95, ][1995-96]and 1996-97. The issue arose in [the ][present ][u'rit]petition is on account of a series of [litigations ][between] the petitioner and some theatre operators in the entireccuntry 4. Thc disputc u,as claiming of depreciaticn at 25o/oby the theatre o\\rners treating the theatre b uilding asplant and machinery. Where the stancl of theDepartment was that the theatre building would get adepreciation o[ or-r1y 1O%, treating it to be a buildingThe assessment officer, at tl're first instrLncc, hasdecided the issue in favour of the Department whichwascl-rallenged by the assessee before theCommissioner of Income Tax (Appeals) (for short the'CIT (Appeals)') vide ITA No.202lTR/DC(A)SRI/CIT(A)-llll98-99. The CIT (Appeals) had decided thr: appeal infavour of the assessee holding that the petitic,ner wouldbe entitled for depreciation at 25o/o. Tl:e said order of theCIT (Appeals) was challenged by the Departmt:nt by wayof an appeal before the ITAT. Pending appeal before theITAT, the Hon'bie Supreme Court in the case of CIT Vs.Anand Theatre 124 lTRl92l, supra, while deciding the f f issue whether the theatre building wouid be treated [as]plant and machinery or whether it would be treated [as]building, held that it could be treated only as a buildingand not as plant and machinery. Thus, the issue [has]been decided in favour of the Department/ Revenue.5. As a consequence of the decision of the Hon'bieSupreme Court of India, the appeal which was preferredby the Department before the ITAT challenging the orderof CIT (Appeals) which stood decided in favour of [the]petitioner got reversed and the appeal of the Departmentstood allowed. Thereafter, the main demand of interestunder Section 220 (2) of the Income Tax Act, 196 1, [u'as]raised by the Department which is under challenge inthe instant case. 6. Learned counsel for the petitioner today prayed [for]a limited relief to the extent that since the issue standsdecided by the Hon'ble Supreme Court of India in [the]case of Anand Theatre, supra, the only point he has, [as]of now is that from the time the CIT (Appeals) stood f decided rn his favour till the decision was rendered bythe Hon'ble Suprcme Court of India in the case of AnandThcatre, supra, on 12.O5.2OOO, for the irrter-veningperiod since there was no demand put forl.h by theDepartrnent, the pctitioner should be entitled lor partialrvaiver of payrne r-rt of inte rest for the said inlerregnumperiod i.e. from the date the CIT (Appeals) decided theappeal in favour of the petitioner i.e. for the arisessmentyear 1994 95 on 05.08.1998 and for the subsequent twoyears 1995-96 and 1996-97 jointly on 19.Oi'.1999 tillthe judgement ol the Hon'ble Supreme Cour-t of India inthe case of Anar-rd Theatre, supra, was Jrassedon12.05.2000 7 . Learned counsel for the petitione:: fi-rrthercontended that in the case of the petitione::, the CIT(Appeats) for the previous assessment year:; l99l-92and 1993-94 had granted the partial waiver vide orderdated 17.09.2OO2. Therefore, the said benefit shoulda,lso be extended for the subsequent periods ars well. It is f further submitted that the said order has further beenaffirmed by the Division Bench of this Court inW.P.No.24292 of 2OO2 decided on 21.\2.2022. Learncdcounsel for the petitioner also relied upon the decisionof the Hon'ble Supreme Court in the case ofCommissioner of Income Tax versus Excel IndustriesLimitedl, rvherein the appeals of the Income TaxDepartment at the similar circumstances has beenrejccted 8. Per contra, learned counsel for the respondents-Department on the other hand opposing the petitionsubmits that it is a case where the Department hadpromptly challenged the order of the CIT (Appeals)before the ITAT for a-11 the three assessment vears andthat the three appeals hied by the Department beforethe ITAT stood allowed vide order dated 2O.O9.2OO2 and05.05.2004 respectively. It is further contended thatsince the order passed by the CIT (Appeals) in favour of I (2014) 13 Supreme Court Cases 459 f the assessec stood reversed by the ITAT, the very orderof the CIT (Appeals) would not remain in exisl-ence andthe petitioner: cannot claim any waiver on tht: basis ofan order wl-rich docs not exist 9. It u,as lurther contention of the Departrnent thatthe demand during the interregnum period :ould nothave been raised for the reason that firstly, the CIT(Appeals) had aliou,ed the appeal of the assesriee and itwas under challenge before the ITAT. As long as theappea-l was pending before the ITAT, the dem,lnd couldnot have been raised. Moreover, it wars lurthercontendcd that, the moment the order of the CIT(Appeals) stood reversed, the order relates ber.ck to thedate the order in original was passed by the assessmentofficer. And in vie'"1, of the provisions of sub-st:ction 2 ofSection 22O of the Income Tax Act, 1961, the petitionertherefore would be liable to pay interes t for theintervening period. Even though there might have beenan order in his favour by the ITA'1, but the said order was immediately challenged by the Department and anyorder ur-lder challenge is always subject to outcome ofthe ITAT decision was immediately challenged by the Department and anyorder ur-lder challenge is always subject to outcome ofthe ITAT decision 10. Having heard the contentions put forth on eitherside and on perusal of records, particularly, taking noteof the fact that whether the petitioner would be entitledfor depreciation of 25'/o on the theatre building treatingit to be a plant and machinery or whether they would beliable for depreciation at lOoh treating it to be a buildingwas laid to rest by the Hon'ble Supreme Court in thecase of Anand Theatre, supra. What now requires to beseen is the consequence that would fall from thejudgement of the Hon'ble Supreme Court of India. 11. Admittedly, the assessment officer has raised ademand of interest against the petitioner for all thethree assessment years. The waiver sought for by thepetitioner in the opinion of this Bench cannot beaccepted for the simple reason that Section 22O of theAct deals u,ith a situation where tax payable and when the assessee is deemed to be in default. The said sectioncleariy lays down a situation under which the interestwould become leviable and the provisions ol law,particularly, Section 22O (Al of the Act lays down theprovisions under which there could be a wai uer of theamount of interest. Admittedly, in the instart case,the petitioner do not fall in any of the categoryenvisaged under sub-section 2 (A) ol Section ['.12O ]of theAct 12. Another fact which needs to be considered is thefact that the Department had immediately <;hallengedthe order passed by the CIT [(Appeals) ]before the ITAT, itwould squarely be within the ambit of corLtinuit5r ofproceedings. When the appeal of the Departnrent stooda-llowed and the order under challenge i.e. order of theCIT (Appeals) is set aside and reversed, the consequencewould be that the petitioner becomes liable for paymentof tax assessed by the original assessing officer. Further, he [q,ould ]also be liable for [payment of interest, as ][has]been envisaged under Section 220 [of ][the ][Act.] 13. If the analo&y canvassed by the [petitioner ][is to ][be]accepted, tl-rcn it would be literally [laying down ][the ][law]and would also be giving rise to a [Pandora's ][Box ][of]similar claims being raiscd [b."- ]all [the ][assesseess who]succeed in an appeal and the said order [subsequentiy]gets reversed at a still higher forum or Court' Such [a]situation since, has not been [prescribed ][under ][the]statute, this Bench while considering [the demand notice]raised by the CIT (Appeals) under Section [22O ][(21 ][of ][the]Income Tax Act, 196 1, cannot venture into [and ][lay]down a law which otherwise is not within the [scope and]ambit of the instant writ petition 14. In view of the same, [we ]do not Iind [any ][strong ][case]made out by the petitioner calling for an [interference]with the demand notice under Section 22O [(21 ]of [the]Income Tax Act, 196 I and thc writ petition deserves [to] I f be and is accordingly rejected. There [shall lre ][no ][order]as to costs. As a sequel, miscellaneous petitions, if artlz [pending,] shall stand closed SDI B.SARASWATHIASSISTANI' REGISTRAR/'- -//TRUE COPY//--()SECTION OFFICER To, 'l . One CC to SRI CHALLA GUNARANJAN, Advocate 2. One CC to [J.V.PRASAD, ][Advocate ][ ] 3. Two CD CoPies BSR GJ 4 \' HIGH COURT DATED: 2810812023 ORDERWP.No.5667 of 2005 REJECTING THE WRIT PETITION, WITHOUT COSTS oj40B.o,L - --...-._r- 5,TAr/:ti";-l2E [2M]