Wp/6158/2011 Of M/S. Neuland Laboratories Ltd v. The Deputy Commissioner Of Income Tax

THE HON’BLE SRI JUSTICE V.V.S.RAOANDTHE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.6158 of 2011 16.03.2011 Between: M/s.Neuland Laboratories Limited AND …. Petitioner The Deputy Commissioner of Income TaxCircle-16 (1), Range 16,Hyderabad, and others. … Respondents THE HON'BLE SRI JUSTICE V.V.S.RAOAND THE HON'BLE SRI JUSTICE RAMESH RANGANATHANWRIT PETITION No.6158 of 2011 ORDER:(Per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a company engaged in manufacturing andmarketing of bulk drugs. They filed income tax return for the assessmentyear 2004-2005. The assessing officer passed orders under Section143(3) of the Income Tax Act, 1961 (the Act, for brevity) on 29.12.2006restricting deductions under Section 80HHC of the Act to Rs.40,19,504/-and making disallowance to a tune of Rs.12,33,387/-. The petitionerappealed before the Commissioner of Income Tax (Appeals). The samewas allowed partly on 12.03.2008. Nonetheless, the first respondent –assessing officer, issued notice under Section 147 of the Act proposingto re-assess the income for the assessment year 2004-2005. Thepetitioner sought reasons and also filed objections thereto, which wasrejected. The first respondent passed the re-assessment order on30.12.2010. Aggrieved by which, the petitioner filed appeal before theCIT (Appeals), which is pending. The petitioner appears to have approached the second respondent for stay of collection of the disputed tax. By a communicationdated 04.03.2011 the petitioner was informed that the secondrespondent, while staying the rest of the demand till 30.06.2011 ordisposal of the appeal by the tribunal, had asked the petitioner to pay asum of Rs.1,00,00,000/- (Rupees one crore only) by 31.03.2011 in twoinstalments, that is to say, an amount of Rs.50,00,000/- (Rupees fiftylakhs only) by 10.03.2011 and another sum of Rs.50,00,000/- (Rupeesfifty lakhs only) by 25.03.2011. At that stage, the petitioner filed theinstant writ petition assailing the notice issued by the first respondentunder Section 148 of the Act proposing to re-assess the matter. The counsel for the petitioner made submissions touching uponthe alleged inherent lack of jurisdiction in the first respondent to beginexercise for re-assessment. Having regard to the fact that, pursuant tothe impugned notice for re-assessment, the petitioner has alreadysubmitted to the jurisdiction of the first respondent, who has alreadypassed an assessment order which is at the stage of appeal, we are notinclined to exercise our discretion, however, strong the grounds urged insupport of the writ petition. The counsel for petitioner submits that, due to financialunsoundness, the petitioner is not able to comply with the order of thesecond respondent, dated 04.03.2011. He would urge that time may beextended till 31.05.2011 so that the petitioner would pay an amount ofRs.25,00,000/- (Rupees twenty five lakhs only) by the end of this month,i.e., by 31.03.2011 and balance by the end of May, 2011. We are notable to countenance any such submission. The second respondentrestricted the stay till 30.06.2011 or till disposal of the appeal by the CIT(Appeals). Therefore, we deem it proper to extend time till 15.04.2011for payment as ordered by the second respondent. An amount ofRs.25,00,000/- (Rupees twenty five lakhs only) shall be paid on orbefore 31.03.2011, the balance (out of Rs.1,00,00,000/-) shall be paidon or before 15.04.2011, in default of which, it shall be open to set inmotion the proceedings for collection of the tax in its entirety. We furtherrecord the submission of the Senior Standing Counsel for Income Taxthat the appeal filed by the petitioner against the order, dated30.12.2010 of the first respondent would be disposed of within a periodof eight (8) weeks from the date of receipt of a copy of this order. Wemake it clear that none of the observations herein shall be taken asexpression of any opinion on the merits of the case. The writ petition stands disposed of accordingly. No costs.