Wp/44193/2013 Of The Principal Officer v. The Commissioner Of Income Tax (Appeals) I

IN THE HIGH COURT OF KARNATAKA AT BANGALOREDATED THIS THE 23 DAY OF JANUARY 2014 BEFORE. THE HON’BLE Dr.JUSTICE JAWAD RAHIM| $W.P. No. 44193/2013 (1IT) BETWEEN THE PRINCIPAL OFFICERBOGGARAM TEX PRINTS PVT LTD.,.NO. 1937, 3 CROSS, CLUB ROAD20THMAIN, II PHASE, J.P. NAGAR, |BANGALORE - 560 O78.REPRESENTED BY DIRECTOR ... PETITIONER| (BY SRI. ASHOK A. KULKARNI,ADV,.,) AND 1.THE COMMISSIONER OF INCOME TAX (APPEALS)-I. NO. 59, HMT BHAVAN, GANGANAGAR, BELLARY ROAD, BANGALORE - 560 032.. 2.THE INCOME TAX OFFICERWARD -11(1)- FLOOR, R.P. BHAVANNRUPTUNGA ROAD, BANGALORE - 560 OO1..WARD -11(1)- FLOOR, R.P. BHAVANNRUPTUNGA ROAD, BANGALORE - 560 OO1.. 3.THE TAK RECOVERY OFFICERRANGE-L11RANGE-L11 R.P. BHAVAN, NO. 14/3, 5 FLOORNRUPATUNGA ROAD|NRUPATUNGA ROAD| BANGALORE - 560 OO1. ... RESPONDENTS| (BY SRI. K.V. ARAVIND, CGSC) THIS W.P. IS FILED UNDER ARTICLES 22726 AND 22OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THENOTICE VIDE ANN-D DATED 25.7.2013 DIRECT IN THENATURE OF MANDAMUS OR OTHERWISE TO THE R-1 TODISPOSE OF THE SAID APPLICATION FOR STAY OFCOLLECTION OF TAXES DATED 20.8.2013 IN VIDE ANN-E. | THIS PETITION COMING ON FOR’ PRELIMINARYHEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Petitioner,aCOM PaNyincorporated undertneprovisions of the Companies Act, 1956, and assessed toincome tax upto and inclusive of assessment year 1996-97|is in writ action seeking issuance of a writ of in the nature ofcertiorarito quash the notice dated 25.7.2013 issued by the)3[ra]respondent vide Annexure-D bearing F.No.218/TRO/R-11/2013-14 threatening enforcement of recovery of allegedtax liability. 2).Learned standing counsel, Sri K.V.Aravind has taken|notice for the respondents and the matter has come up|today. ‘3.From what the learned counsel for the petitioner has| urged and the contentions in negation of it by the standing counsel, it could be seen, petitioner borrowed substantialfinancial assistance from tne Karnataka State Finance|Corporation and fell into arrears and then entered into one-time settiement in January 2001. It nad provided collateralsecurity as insisted upon by the Corporation in the form ofsurety of one Suryanarayana Snastri. 4In terms of the one-time settlement, the Corporationwas obliged to nonour the terms but in utter disregard to it,he threatened to auction the property offered as securityand thus’ to save it from coercive action, SuryanarayanaShastri paid Rs.1,20,00,000/- towards clearing the dues andultimately the property was saved. 5.Tnough during the assessment year 2006-07 andprevious year, there was no _ business activity of thassessee, acting under Section 14/7 of the Income Tax Act,the assessment officer passed an order bringing to taxRs.1,20,00,000/- as income, ignoring it was not income butloss entitled to deduction, and the assessee had not availedthe benefit of such deduction for the earlier period. 6.The grievance of the petitioner is, levy of tax basedon the application under Section 41(1) of tne Act wasuncalled for and the assessment is untenable. Questioningit, the assessee nas filed an appeal before the Income Tax(Appeals) on 26.4.2013 which is still pending consideration.Tnough the petitioner moved applications seeking interimorder in the nature of stay to stay enforcement of the order In.questionvideAnnexure-E,theautnorities|nave|threatened to enforce the order-Annexure-D. Thus they arein this court seeking relief as referred to above. J.On behalf of the Revenue, the assertive contention is,assessee is in default and liability is already determined.Tnough the appeal is pending, the assesee’s liability stillsubsists, and unless annulled by the appellate court, it isenforceable. 8.The Revenue does not dispute appeals though filed,|are still pending adjudication witn no action. To say tneleast, the application for interim stay has also not been considered which required immediate consideration by tneautnorities. In.questionvideAnnexure-E,theautnorities|nave|threatened to enforce the order-Annexure-D. Thus they arein this court seeking relief as referred to above. J.On behalf of the Revenue, the assertive contention is,assessee is in default and liability is already determined.Tnough the appeal is pending, the assesee’s liability stillsubsists, and unless annulled by the appellate court, it isenforceable. 8.The Revenue does not dispute appeals though filed,|are still pending adjudication witn no action. To say tneleast, the application for interim stay has also not been considered which required immediate consideration by tneautnorities. QO.In the circumstances, the relief sought by the)petitioner falls in a narrow compass. I am satisfied it hasmade out a case for exercise of writ jurisdiction to direct theappellate autnority to consider the appeal filed by thepetitioner expeditiously and till consideration of the appealon merit, the impugned order at Annexure-D dated|25.7.2013 snail stand stayed. It is desirable the appellateauthority shall dispose of the appeal within six weeks fromthe date of receipt of a copy of this order. Rule issued ismade absolute. The petition is accordingly allowed. vgn* Sd/- | JUDGE|