M/S JINDAL STEEL AND POWER LTD. vs. COMMISSIONER OF INCOME TAX, HISSAR AND ANR

Facts

The petitioner, M/s Jindal Steel and Power Ltd., filed a writ petition before the High Court of Punjab and Haryana at Chandigarh seeking to quash an order dated 27.02.2014 and to stay the recovery of an outstanding income tax demand of Rs. 1,93,58,92,795/- out of a total demand of Rs. 2,13,58,92,795/-. The respondents are the Commissioner of Income Tax, Hisar, and another authority. The High Court, on 23.09.2015, noted that the appeal was pending before the Income Tax Appellate Tribunal (ITAT) and adjourned the hearing, hoping for a decision from the Tribunal. Today, the petitioner's counsel stated that the ITAT has partly allowed the assessee's appeal, rendering the writ petition infructuous.

Held

The High Court held that the writ petition had become infructuous. This was because the petitioner's counsel informed the court that the Income Tax Appellate Tribunal (ITAT) had already partly allowed the assessee's appeal. Consequently, the original prayer for quashing the order and staying the recovery of the demand was no longer relevant as the appeal before the ITAT, which was the subject of the interim order, had been decided. The High Court did not delve into the merits of the demand or the ITAT's decision. The operative direction was to dismiss the writ petition as having been rendered infructuous.

Key Issues

1. Whether the recovery of the outstanding income tax demand of Rs. 1,93,58,92,795/- should be stayed pending the adjudication of the appeal before the ITAT? (Question of mixed law and fact, relating to the powers of the High Court under Article 226 of the Constitution of India and Section 220(6) of the Income Tax Act, 1961). Assessee's contention: The petitioner sought a stay on the recovery of the substantial demand, implying a need for interim relief pending the final decision of the appellate authority. Revenue's contention: No specific contention is recorded for the revenue in relation to the stay of recovery in the provided text. However, the revenue was represented by Senior Standing Counsel, indicating their opposition to the relief sought by the petitioner.