Madras High Court
Expovan vs The Deputy Commissioner Of Income ... on 8 February, 2022
W.A No. 139 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.02.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE J. SATHYA NARAYANA PRASAD
W.A. No.139 of 2022
and
CMP.Nos.1038 and 1039 of 2022
Expovan
Represented by its Managing Partner, Mr.R.Mahendran
No.124/16, Vadakkipalayam Road
R.Ponnupuram
Pollachi – 642 002 .. Appellant
Versus
The Deputy Commissioner of Income Tax
Non Corporate Circle 4
No.63, Race Course Road
Coimbatore – 641 018 .. Respondent
Writ Appeal filed under Clause 15 of Letters Patent against the order
dated 14.12.2021 passed in W.P. No. 26650 of 2021.
For Appellant : Mr. N.V. Balaji
For Respondent : Mr. A.N.R. Jayaprathap
Standing Counsel
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W.A No. 139 of 2022
JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J.)
Challenging the order dated 14.12.2021 passed by the learned Judge in
W.P.No.26650 of 2021, the petitioner / assessee has come up with this writ
appeal.
2.At the outset, the relief sought in the writ petition is as follows:
“To issue a writ of Certiorarified Mandamus calling for the records of the
respondent contained in its order dated 17.09.2021 bearing DIN & Letter
No.ITBA/COM/F/17/2021-2022/1035676709 (1) issued under section 220(6) of
the Income Tax Act, 1961 and all proceedings in furtherance thereof, and to
quash the same as arbitrary, illegal and unjust and to consequently forbear the
respondent and/or any of its subordinates, agents, representatives or any other
person claiming under/through the respondent from in any manner taking any
steps towards the recovery of any demand made pursuant to the assessment order
passed by the respondent bearing DIN: ITBA/AST/S/143(3)/2021-
2022/1032276622(1) passed under section 143(3) read with Section 143(3A) and
143(3B) of the Income Tax Act, 1961 dated 07.04.2021 for the assessment year
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W.A No. 139 of 2022
2018-19 for PAN: AAFFE1545F pending disposal of the petitioner's appeal by
the Commissioner of Income Tax (Appeals).
3.The learned Judge, after considering the submissions made by the
learned counsel appearing for both sides, disposed of the writ petition in the
following manner:
“6. Considering the same, I am inclined to dispose this
writ petition by directing the petitioner to pay a sum of
Rs.30,00,000/- per month till the amount is paid. The
amounts shall be paid by the petitioner by 5th of every month.
In case there is failure to pay the amounts by the due date, the
protection under this order shall come to an end sine die and
the respondent will be at liberty to attach the bank accounts
of the petitioner. In other words, the impugned Assessment
order shall stand revived without any reference.
7. The appeal of the petitioner which is pending before
the Commissioner of Income Tax (Appeals) shall be taken up
for a final hearing only after the petitioner pays the entire
amount of Rs.2,98,81,885/- in terms of this order.
8. It is needless to state that the payments to be paid by
the petitioner is without prejudice to the rights of the
petitioner in the appeal pending before the Commissioner of
Income Tax (Appeals). The first instalment shall be paid by
the petitioner by 05.01.2022.
9. This Writ Petition stands disposed of with the above
observations. No costs. Consequently, connected Writ
Miscellaneous Petitions are closed.”
4.It is the contentions of the learned counsel for the appellant that the
respondent passed the assessment order dated 07.04.2021 under section 143(3)
r/w 143(3A) & 143(3B) of the Income Tax Act, making addition of Rs.13.67
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W.A No. 139 of 2022
crores twice, resulting in very huge demand on the appellant; further, the
assessment order is in violation of section 144B of the Act; and hence, the same
is void and non-est in law. The learned counsel further submitted that when the
assessment order suffers from patent illegality and is liable to be quashed, the
question of pre-deposit by the assessee, does not arise. However, by order dated
17.09.2021, the request of the appellant to stay the demand, was rejected by the
Appellate Authority. Notwithstanding the same, the appellant in order to prove
its bona fide, had already paid Rs.25,00,000/ along with a letter dated
02.12.2021 to the Assistant Commissioner of Income Tax, Coimbatore, with an
undertaking to pay a sum of Rs.10,00,000/- every month till the disposal of the
appeal or the time required to pay 20% of the disputed demand, which request
was not considered. The learned Judge also, without considering the plight of
the appellant, directed them to pay a huge sum of Rs.30,00,000/- every month
until the amount of Rs.2,98,81,885/- being 20% of the disputed demand, is paid.
Thus, the learned counsel submitted that the order of the learned Judge would put
the appellant in huge financial trouble and thereby affect the cash flow and
livelihood of the entire cluster of farms, whose livelihood depend on the
appellant and hence, the same has to be set aside.
5.Heard the learned standing counsel appearing for the respondent, who
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W.A No. 139 of 2022
submitted that the order of the learned Judge does not require any interference at
the hands of this court, as the same was passed, after taking into account all the
facts and circumstances of the case.
6.This court has also perused the documents enclosed in the typed set of
papers.
7.What was challenged in the writ petition is to the order passed by the
Deputy Commissioner of Income Tax, Coimbatore, under section 220(6) of the
Income Tax Act, 1961, rejecting the petition for stay of demand filed by the
appellant /assessee for the assessment year 2018-19 and directing to pay at least
Rs.2,98,81,885/- being 20% of the total demand amounting to Rs.14,94,09,424/-
within 15 days from the date of receipt of the order to consider for stay of
collection of remaining demand. Taking note of the plea of the appellant, the
learned Judge granted interim protection with respect to attachment of the bank
accounts of the appellant, subject to the condition that the appellant shall pay
Rs.30,00,000/- per month till the amount is paid and the first instalment and the
first instalment shall commence on 05.01.2022; and only after the appellant pays
the entire amount, the appeal shall be taken up for final hearing. Being
dissatisfied with the order so passed in the writ petition, the appellant is before
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W.A No. 139 of 2022
this court.
8.It is not in dispute that once the court finds the assessment order to be
illegal and decides to set aside the same, there cannot be imposition of any
condition; and the levy and collection of tax must be under the four corners of
law. Whereas, in this case at hand, the appellant challenged the assessment order
by filing an appeal before the Appellate Authority. Pending the same, they sought
an order of stay, which was rejected for want of deposit of 20% of the disputed
tax. Therefore, it is apparent that the assessment order passed by the respondent
is neither quashed nor stayed by the Appellate Authority.
9.By the order impugned herein, considering the grievances of the
appellant, the learned Judge, while granting interim protection, has shown some
indulgence by directing them to pay 20% of the demand raised, by way of
installment, which in the opinion of this court, seems to be reasonable and
warrants no interference.
10.However, having regard to the bona fide contentions raised on the side
of the appellant that the livelihood of about 3200 families of the farmers depends
on the functioning of the company and the payment of huge sum on every month
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W.A No. 139 of 2022
would severely affect the working capital of the appellant; and the appellant has
already made payment of Rs.25,00,000/- and is prepared to pay Rs.10,00,000/-
per month till 20% of the disputed demand is made, this court is inclined to
modify the order impugned herein to the effect that “the petitioner shall pay a
sum of Rs.15,00,000/- per month, instead of Rs.30,00,000/- per month till the
entire amount of Rs.2,98,81,885/- is paid and the same shall be paid by the
petitioner by 5th of every month, with effect from 05.03.2022”. Except the same,
the order of the learned Judge dated 14.12.2021 passed in WP.No.26650 of 2021
remains unaltered.
11.With the aforesaid modification, this writ appeal stands disposed of.
No costs. Consequently, connected miscellaneous petitions are closed.
(R.M.D., J.) (J.S.N.P., J.)
08.02.2022
dhk
Internet : Yes / No
Index : Yes / No
R. MAHADEVAN, J.
https://www.mhc.tn.gov.in/judis
W.A No. 139 of 2022
and
J.SATHYA NARAYANA PRASAD, J.
dhk
To
1.The Deputy Commissioner of Income Tax
Non Corporate Circle 4
No.63, Race Course Road
Coimbatore – 641 018
2.The Deputy Commissioner of Income Tax
Non Corp Circle 4,
Coimbatore.
W.A. No.139 of 2022
08.02.2022
https://www.mhc.tn.gov.in/judis
