The Petitioner Thereafter Filed An Appeal Before Thecommissioner Of Income Tax (Appeals) – Ix In Ita v. Commissioner Of Income Tax, (1963) 50 Itr 1

IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 07.02.2020 CORAM THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.NO.740 OF 2016ANDW.M.P.NO.556 OF 2016 Mr. AlagesanProprietor: Manikannan Rice Mill,Palvarthuvendan Village,Polur Taluk, Tiruvannamalai District. ...PetitionerVs. 1. The Chief Commissioner of Income Tax -III, Now re-designated as Principal chiefCommissioner of Income Tax, Chennai -4, Now re-designated as Principal chiefCommissioner of Income Tax, Chennai -4, Income Tax Department, 121, Nungambakkam High Road, Chennai – 600 034. Nungambakkam High Road, Chennai – 600 034. 2. The principal Commissioner of Income Tax – 8, Income Tax Department, 121, Nungambakkam High Road, Chennai – 600 034. Income Tax Department, 121, Nungambakkam High Road, Chennai – 600 034. 3. The Tax Recovery Officer – 8, Income Tax Department, No.611, 4[th] Floor, Kannammai Building, Anna Salai, Chennai – 600 006. Income Tax Department, No.611, 4[th] Floor, Kannammai Building, Anna Salai, Chennai – 600 006. 4. The Income Tax Officer Ward – I (4), Income Tax Department, No.2, Barracks Cross Street, Officers Line, Vellore – 632 001. Income Tax Department, No.2, Barracks Cross Street, Officers Line, Vellore – 632 001. ...Respondents Writ Petition filed under Article 226 of the Constitution ofIndia, to issue a Writ of Certiorarified Mandamus, to call forthe records of the 3[rd] respondent to quash the impugned notice inForm No.ITCP 25 dated 15.12.2015 in AGIPA7315G/TRC.3/2010-11relating to the Assessment Year 2003-04 and direct the 3[rd]respondent not to proceed further in the matter of recovery of https://hcservices.ecourts.gov.in/hcservices/ the tax and interest charged under Sections 234A, 234B, 234C,220(2) and Rule 5 of the Second Schedule to the Income Tax Act,1961 pending disposal of the waiver petition before the 1[st]respondent. For Petitioner : Mr.A.S.SriramanFor Respondents: Mr.Prabhu Mukunth, Arun Kumar, Junior Standing Counsel for M/s.Hema Muralikrishnan Standing Counsel. O R D E R In this Writ Petition, the petitioner has challenged theimpugned notice dated 15.12.2015 in Form No.I.TC.P.25 in bearingreference No.AGIPA7315G/TRC.3/2010-11 issued by the 3[rd]respondent. 2. The petitioner claims to be a small agricultural businessderiving income from Rice Mills and had filed income tax returnon 27.08.2004 for the Assessment Year 2003-04. Since thepetitioner failed to respond to the notice issued under Section143(2) of the Income Tax Act, 1961 and to the notice issuedunder Section 144 of the Income Tax Act, 1961, the assessmentorder dated 17.02.2006 was passed based on the best judgmentmethod by adding the opening capital of Rs.32,42,854/- to thetaxable income of the petitioner and accordingly, the tax duewas determined and surcharge and interest thereon amounting toRs.16,89,076/- were added. 3. The petitioner thereafter filed an appeal before theCommissioner of Income Tax (Appeals) – IX in ITA No.468/05-06.By an order dated 13.12.2007, the Commissioner of Income Tax(Appeals) – IX allowed the appeal. 4. Therefore, the 4[th] respondent filed an appeal before theIncome Tax Appellate Tribunal in ITA No.338/Mds/2008. By anorder 23.10.2008, the Income Tax Appellate Tribunal has reversedthe order of the Commissioner of Income Tax (Appeals) – IXallowing the petitioner's appeal, as there was no representationon behalf of the petitioner. The said order was passed by theIncome Tax Appellate Tribunal by placing reliance on thedecision of the Hon'ble Supreme Court in Kale Khan MohammadHanif Vs. Commissioner of Income Tax, (1963) 50 ITR 1. 5. The petitioner thereafter filed a Miscellaneous Petitionin M.P.No.153/Mds/2010 on 14.08.2010, to recall the said order,so that the petitioner could make submission on merits. By an https://hcservices.ecourts.gov.in/hcservices/ 4. Therefore, the 4[th] respondent filed an appeal before theIncome Tax Appellate Tribunal in ITA No.338/Mds/2008. By anorder 23.10.2008, the Income Tax Appellate Tribunal has reversedthe order of the Commissioner of Income Tax (Appeals) – IXallowing the petitioner's appeal, as there was no representationon behalf of the petitioner. The said order was passed by theIncome Tax Appellate Tribunal by placing reliance on thedecision of the Hon'ble Supreme Court in Kale Khan MohammadHanif Vs. Commissioner of Income Tax, (1963) 50 ITR 1. 5. The petitioner thereafter filed a Miscellaneous Petitionin M.P.No.153/Mds/2010 on 14.08.2010, to recall the said order,so that the petitioner could make submission on merits. By an https://hcservices.ecourts.gov.in/hcservices/ order dated 11.02.2012, the said Miscellaneous Petition wasdismissed by the Income Tax Appellate Tribunal, Chennai 'C'Bench. The petitioner thereafter filed T.C.A.No.259 of 2011before this Court, which was dismissed vide order dated09.11.2011. 6. The petitioner thereafter also unsuccessfully challengedthe order dated 09.11.2011 passed by this Court in T.C.A.No.259of 2011 before the Hon'ble Supreme Court in S.L.P.(Civil).No.35742 of 2012. 7. The petitioner thereafter filed yet another T.C.A.No.162of 2012, against the final order dated 23.10.2008 of the IncomeTax Appellate Tribunal passed in ITA No.338/MDS/2008 with adelay of 810 days. 8. The Division Bench of this Court however dismissed thesaid appeal on 09.07.2012, on the ground that this Court hadalready considered the issue on merits in T.C.A.No.259 of 2011and therefore, subsequent appeal, i.e., T.C.A.No.162 of 2012 wasnot maintainable. 9. Thus, the income tax amount of Rs.10,60,795/- and thesurcharge of Rs.53,040/- stood confirmed. Therefore, thepetitioner was liable to pay interest under Sections 234A, 234Band 230C which was calculated as Rs.5,75,831/- when theassessment order dated 17.02.2006 was passed. 10. In the light of the above, the petitioner filed apetition for waiver of interest and surcharge under theaforesaid provisions in terms of Section 220(2) of the IncomeTax Act, 1961 read with Rule 5 to the II Schedule of the IncomeTax Act, 1961 before the 1[st] respondent Chief Commissioner ofIncome Tax – III, which was also passed exparte on 23.10.2008. 11. Thereafter, on 15.12.2015, a summons was issued to thepetitioner. It called upon the petitioner to appear inconnection with the arrears of tax recovery proceedings.Another notice under Section 221(1) of the Income Tax Act, 1961was issued. In the same notice, the petitioner was informed thatthe petitioner was arrears of tax of Rs.24,43,578/-. On the sameday, i.e. 15.12.2015, by an another notice, the petitioner wascalled upon to appear before the tax recovery officer to showcause as to why the petitioner should not be committed to thecivil prison in execution of the recovery certificate. 12. The petitioner has challenged these proceedingsproposing the recovery of arrears of tax and the notice seekingto arrest the petitioner to the civil prison in execution of therecovery certificate of arrears dated 03.02.2011 bearing reference Certificate No.03/2010-11 pending disposal of Section220(2) petition filed for waiver of interest. 13. I have considered the arguments advanced by the learnedcounsel for the petitioner and the respondents. 14. It is noticed that the petitioner has filed anapplication for waiver of interest before the 1[st] respondentChief Commissioner of Income Tax – III. No order had been passedby the 1[st] respondent Chief Commissioner of Income Tax – III inthe said application when the impugned notice was issued. 12. The petitioner has challenged these proceedingsproposing the recovery of arrears of tax and the notice seekingto arrest the petitioner to the civil prison in execution of therecovery certificate of arrears dated 03.02.2011 bearing reference Certificate No.03/2010-11 pending disposal of Section220(2) petition filed for waiver of interest. 13. I have considered the arguments advanced by the learnedcounsel for the petitioner and the respondents. 14. It is noticed that the petitioner has filed anapplication for waiver of interest before the 1[st] respondentChief Commissioner of Income Tax – III. No order had been passedby the 1[st] respondent Chief Commissioner of Income Tax – III inthe said application when the impugned notice was issued. 15. It appears that subsequently, an order has been passedby the 1[st] respondent Chief Commissioner of Income Tax – III on08.11.2019. The the 1[st] respondent Chief Commissioner of IncomeTax – III has rejected the application filed for waiver ofinterest by the petitioner under Section 220(2) of the IncomeTax Act, 1961 read with Rule 5 to the II Schedule of the IncomeTax Act, 1961. The petitioner seeks to challenge the same inaccordance with law. 16. That being the case, the impugned recovery proceedingsproposing to arrest the petitioner, shall be kept in abeyanceprovided the petitioner initiate appropriate proceedings, withina period of thirty days from the date of receipt of a copy ofthis order against the order dated 08.11.2019 passed by the 1[st]respondent Chief Commissioner of Income Tax – III. 17. The petitioner is therefore given an interim protectionfor the period of three months from the date of receipt of acopy of this order and thereafter, it is for the petitioner toapproach the appropriate forum/Court against the proceedings ofthe order dated 08.11.2019 passed by the 1[st] respondent ChiefCommissioner of Income Tax – III and for extension of theinterim relief granted herein. 18. The present Writ Petition stands disposed with the aboveobservations. No cost. Consequently, connected MiscellaneousPetition is closed. Sub Assistant Registrar jen https://hcservices.ecourts.gov.in/hcservices/ To 1. The Chief Commissioner of Income Tax -III, Now re-designated as Principal chiefCommissioner of Income Tax, Chennai -4, Now re-designated as Principal chiefCommissioner of Income Tax, Chennai -4, Income Tax Department, 121, Nungambakkam High Road, Chennai – 600 034. Nungambakkam High Road, Chennai – 600 034. 2. The principal Commissioner of Income Tax – 8, Income Tax Department, 121, Nungambakkam High Road, Chennai – 600 034. Income Tax Department, 121, Nungambakkam High Road, Chennai – 600 034. 3. The Tax Recovery Officer – 8, Income Tax Department, No.611, 4[th] Floor, Kannammai Building, Anna Salai, Chennai – 600 006. Income Tax Department, No.611, 4[th] Floor, Kannammai Building, Anna Salai, Chennai – 600 006. 4. The Income Tax Officer Ward – I (4), Income Tax Department, No.2, Barracks Cross Street, Officers Line, Vellore – 632 001. Income Tax Department, No.2, Barracks Cross Street, Officers Line, Vellore – 632 001. +1cc to Mr.S.Sridhar, Advocate, S.R.No.9820+1cc to M/s.Hema Muralikrishnan, Advocate, S.R.No.10177 W.P.No.740 of 2016and W.M.P.No.556 of 2016RLD(CO)CS/20/07/2020