Madras High Court
M/S.Air Liquide Medical Systems ... vs The Deputy Commissioner Of Income ... on 29 June, 2022
W.A.No.1191 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.06.2022
CORAM
THE HONOURABLE Mr. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE Mr. JUSTICE MOHAMMED SHAFFIQ
W.A.No.1191 of 2022
AND
C.M.P.No.7519 of 2022
M/s.Air Liquide Medical Systems Private Limited
Rep. by its Managing Director
Anil Kumar
Campus Tek Meadows
5th Floor, Tower B
No.51, Rajiv Gandhi Salai
Sholinganallur
Chennai 600 119 .. Appellant
Vs
1.The Deputy Commissioner of Income Tax
Corporate Circle 1(1), Chennai
Room No.611, Wanaparthy Block-VI Floor
No.121, Mahatma Gandhi Road
Nungambakkam, Chennai 600 034
2.The Commissioner of Income Tax (Appeals)
National Faceless Appeal Centre
Delhi .. Respondents
Writ Appeal filed under Clause 15 of Letters Patent against the order
dated 14.02.2022 passed by the learned Judge in W.P.No.2232 of 2022.
For Appellant Mr.R.Sivaraman
For Respondents Mr.D.Prabhu Mukunth Arunkumar
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Standing Counsel
1/7
W.A.No.1191 of 2022
JUDGMENT
[Judgment of the Court was delivered by R.MAHADEVAN, J.]
Heard Mr.R.Sivaraman, learned counsel for the appellant/assessee and
Mr.D.Prabhu Mukunth Arunkumar, learned Standing Counsel appearing for
the respondents and also perused the materials available on record.
2. The appellant/assessee is a private limited company, engaged in the
business of manufacture, trading and service of life saving equipment viz.,
ventilators and its assessment for the assessment year 2018-19 was completed
on 26.03.2021, resulted in a demand of Rs.12,86,73,780/-. As against the said
demand, the appellant/ assessee preferred an appeal before the Commissioner
of Income Tax (Appeals), NFAC, Delhi and the same is pending. While so,
the appellant/assessee filed a petition on 12.04.2021 before the Commissioner
of Income Tax, Corporate Circle 1(1) CHE, to grant stay of the demand, which
was rejected on 20.12.2021, citing the guidelines issued vide Instruction
No.1914 dated 29.02.2016 and directed the appellant/assessee to pay 20% of
the demand. Challenging the same, the appellant/assessee filed W.P.No.2232
of 2022 and the learned Judge by order dated 14.02.2022, disposed of the said
writ petition in the following terms:
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W.A.No.1191 of 2022
i. That the impugned order is modified to the effect that,
instead of 20%, the petitioner/assessee shall pay 15% of
the demand i.e., Rs.12,86,72,780/- within a period of four
weeks from the date of receipt of a copy of this order.
ii. On this condition, there shall be an order of stay of the
assessment order till the disposal of the appeal filed before
the second respondent.
iii. It is made clear that, within four weeks time if the payment
of 15% of the demand as directed above has not been paid
or complied with by the petitioner/assessee, the order of
stay shall stand automatically vacated without any further
reference to this Court.
Aggrieved over the aforesaid order of the learned Judge, the appellant/assessee
has come up with this intra-court appeal.
3. The learned counsel for the appellant/assessee submitted that the first
respondent has disposed of the stay application in mechanical manner without
addressing any of the submissions made by the assessee and therefore, it is a
clear case of violation of the principles of natural justice. The learned counsel
further submitted that the learned Judge has failed to follow the established
principles of law as held by this Court in Queen Agencies v. The Assistant
Commissioner of Income Tax, Circle-1 and Others [(2021) 281 Taxman 147
(Mad)] and Kannammal v. Income Tax Officer, Tiruppur [(2019) 413 ITR
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W.A.No.1191 of 2022
390 (Mad)], wherein, it was held that it is the proactive duty of the assessing
officer to test every application for stay on the basis of the trinity of factors
viz., balance of convenience, prima facie and financial stringency and any
order failing to do so, will be liable to be set aside. Stating so, the learned
counsel pleaded for allowing this appeal by setting aside the order of the
learned Judge.
4. Heard the learned Standing Counsel appearing for the respondents,
who submitted that after taking note of the facts and circumstances of the case,
the learned Judge has rightly passed the impugned order, directing the
appellant to make statutory deposit @ 15%, which does not call for any
interference at the hands of this Court.
5. On a perusal of the documents enclosed in the typed set of papers,
more particularly, the order impugned herein, it could be seen that the learned
Judge has thoroughly analysed the facts and circumstances of the case and the
decisions relied on the side of the appellant and has observed that the demand
under the assessment before the appellate authority is comparatively a huge
sum, instead of 20% demand by citing the department Instruction No.1914
dated 29.02.2016, the assessing authority could have passed an order by
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W.A.No.1191 of 2022
making a demand of some lesser percentage. Accordingly, while disposing the
writ petition, the learned Judge, instead of remanding the matter back to the
respondents for re-consideration, directed the appellant to make a payment of
at least 15% of the demand for getting an order of stay of the assessment order.
This court does not find any reason to disagree with the order so passed by the
learned Judge.
6. However, considering the quantum of demand raised against the
appellant, which is huge, and taking note of the financial difficulties faced by
the appellant, we are inclined to modify the order of the learned Judge with
respect to the payment of 15% of the demand, alone, to the following effect:
(i) The appellant shall deposit 10% of the demand within a
period of four weeks from the date of receipt of a copy of this
order and thereafter, pay the remaining 5% of the demand within
a further period of eight weeks.
(ii) The appellate authority shall take up the appeal and
dispose of the same, on merits and in accordance with law, after
providing sufficient opportunity to the appellant/assessee, as
expeditiously as possible, preferably within a period of six
months.
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W.A.No.1191 of 2022
7. Accordingly, this writ appeal stands disposed of. Connected
miscellaneous petition is closed. No costs.
[R.M.D., J.] [M.S.Q., J.]
29.06.2022
Index : Yes/No
gya
To
1.The Deputy Commissioner of Income Tax
Corporate Circle 1(1), Chennai
Room No.611, Wanaparthy Block-VI Floor
No.121, Mahatma Gandhi Road
Nungambakkam
Chennai 600 034.
2.The Commissioner of Income Tax (Appeals)
National Faceless Appeal Centre
Delhi.
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W.A.No.1191 of 2022
R.MAHADEVAN, J.
AND
MOHAMMED SHAFFIQ, J.
gya
W.A.No.1191 of 2022
29.06.2022
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