Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd. Thru. Shri Sarvesh Shrivastava vs. Assistant Commissioner Of Income Tax

Writ Petition No.1380/2015 02.03.2015

Shri Manoj Munshi, advocate for the petitioner.

Shri R.L. Jain, learned Senior Counsel with Ms. Veena Mandlik, advocate for the respondent.

Heard. 2. By this writ petition under Article 226 of the Constitution of India, the petitioner, who is Development Institute engaged in the Industrial Infrastructure Development of the State of Madhya Pradesh, is praying to stay the demand of income tax, interest and penalty for the assessment years 2003-04 to 2010-11 till final disposal of the pending appeals by the Income Tax Appellate Tribunal, Indore in respect of tax & interest and by the Appellate Authority in respect of the penalty and restrain the respondent from taking any coercive steps for recovery of demand pursuant to the demand letter dated 13.01.2015 (Annexure P/1) till the Income Tax Appellate Tribunal hears and decides the appeal on the ground that the Income Tax Appellate Tribunal, Bench at Indore is not functioning. 3. Learned counsel for the petitioner submits that the demand has arisen pursuant to the lease premium liability by considering the same as revenue receipt instead of accepting it as tax liability of the assessee. The petitioner – assessee is a State Government undertaking, which is engaged in the activity of development of industrial facilities on the land received from the Government of Madhya Pradesh. He further submitted that as per the statement of tax liability, amounting to Rs.55,19,95,445/-, the assessee has paid Rs.37,14,35,837/- and the balance amount, which is payable, comes to Rs.18,05,59,608/-, which includes tax and interest. He further submitted that all tax assessment cases are pending before the Income Tax Appellate Tribunal, Indore and all penalty cases are pending before the Commissioner of Income Tax (Appeals). As per Annexure P/1 dated 13.01.2015, Assistant Commissioner of Income Tax vide letter dated 29.12.2014 requested the petitioner to make payment of 50% of outstanding demand and at least 25% thereof by 31.12.2014, but the said outstanding demand has not been paid so far. The amount of Rs.5.8 crores is outstanding against the demand raised as per assessment orders for the assessment years (2003-04 to 2010-11) and the amount of Rs.10.8 crores is outstanding against the penalty demand raised during financial years 2013-14, which is disputed by the petitioner in first appeal. The authority directed the petitioner to pay Rs.5.8 crores on or before 16.01.2015. From the record, it appears that the aforesaid amount has not been paid. 4. Learned counsel for the petitioner submits that the petitioner has prima facie a strong case in its favour with respect to the nature of one time lease premium and in past, prior to assessment year 2003-04, the respondent has considered the lease premium as capital receipts and did not demand any income tax thereon. Further the payment of tax shall adversely affect the operations of the petitioner and development work shall suffer and therefore, prayed that the respondent be directed not to take any coercive action till all the appeals are decided by the Income Tax Appellate Tribunal, including the appeal against pending, which is pending before the Commissioner of Income Tax (Appeals). 5. In reply, Shri R.L. Jain, learned Senior Counsel for the respondent has submitted that as per Annexure P/1 dated 13.01.2015, the respondent – Department has stayed the demand till 31.12.2014 and directed the petitioner to make payment of 50% of the outstanding demand, but till today, no payment has been made, and therefore, they have no option but to resort to take coercive action, as per law, which may include attachment of bank account. 6. On due consideration of the submissions of the learned counsel for the parties and considering the fact that the appeals against the assessment orders for the assessment years 2003-04 to 2010-11 are pending before the Income Tax Appellate Tribunal, Indore and at present the Bench of ITAT at Indore is not functioning, we direct the learned President of the Income Tax Appellate Tribunal, Mumbai to decide the application dated 22.01.2015 (Annexure P/7) filed by the petitioner for constitution of ITAT Bench in Indore for hearing stay application filed under Rule 35-A of the Income Tax Appellate Tribunal Rules, 1963 or fix the case before another Bench, as per Rules and decide the stay application expeditiously within a period of three months from the date of filing of the certified copy of this order. In the meanwhile, on depositing Rs.5.8 crores within a period of four weeks from today, no coercive measures for recovery of the demand, including attachment of bank account, will be taken till the stay application is decided; failing which, the interim protection granted to the petitioner shall automatically stand vacated without any further reference to the Court. 7. With the aforesaid, the writ petition is disposed of.

(P.K. Jaiswal)

(Alok Verma) Judge

Judge

Pithawe RC