PUNJAB URBAN PLANNING AND DEVELOPMENT AUTHORITY vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CWP/25127/2012HC Punjab & HaryanaPHHC01082690201218 December 2012Author: MR. JUSTICE A.K. SIKRI,MR JUSTICE RAKESH KUMAR JAIN2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that once an appeal against an order under Section 271(1)(c) is preferred, and an application for stay of payment is filed, the least expected is for the applicant to be heard and the application to be decided on merits. The Court found that attempting to recover the amount through coercive methods without allowing the petitioner to avail this chance was not appropriate. Consequently, the Court directed the Commissioner of Income Tax (Appeals) to decide the stay application within one month from the date of the order. The Court also stipulated that no coercive steps would be taken for the recovery of the tax amount for at least one week after the decision on the stay application. The writ petition was disposed of with these directions.

What were the facts?

The petitioner, Punjab Urban Planning and Development Authority, a public sector undertaking and statutory authority, filed a writ petition before the High Court of Punjab and Haryana. The petitioner had appealed a quantum assessment before the Income Tax Appellate Tribunal and a penalty order under Section 271(1)(c) of the Income Tax Act, 1961, before the Commissioner of Income Tax (Appeals). An application for stay of demand was pending before the Commissioner of Income Tax (Appeals). Despite the pending stay application, a demand notice dated November 19, 2012, was issued, directing payment of the assessed tax within 30 days. The assessed tax amount had already been recovered by the Income-Tax authorities.

What were the issues?

1. Whether the issuance of a recovery notice for tax demand is appropriate when an appeal against the penalty order under Section 271(1)(c) is pending and a stay application has not yet been decided? (Question of law and fact, concerning Section 271(1)(c) and principles of natural justice). Assessee's Contention: The petitioner argued that issuing a recovery notice while a stay application is pending and undecided is inappropriate, especially when appeals against the underlying assessments are also pending. They contended that they should be allowed to avail the opportunity to have their stay application heard and decided on merits before any coercive recovery steps are taken. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Civil Writ Petition No.25127 of 2012 (O&M) DATE OF DECISION: December 18, 2012

Punjab Urban Planning and Development Authority …..Petitioner versus

Assistant Commissioner of Income Tax

.....Respondents

CORAM:- HON'BLE MR.JUSTICE A.K. SIKRI, CHIEF JUSTICE

HON’BLE MR. JUSTICE RAKESH KUMAR JAIN, JUDGE

Present: Mr.Rupinder Khosla, Advocate for the petitioner

..

A.K. SIKRI, C.J.: (Oral)

1.

The petitioner, which is a public sector undertaking and a statutory authority, has filed this writ petition. It is pointed out that against the quantum assessment, the appeal is preferred which is pending before the Income Tax Appellate Tribunal. It is also submitted that against the penalty order passed under section 271(1) (c) of the Income Tax Act, 1961, consequent upon quantum assessment, appeal is preferred before the Commissioner of Income Tax (Appeals) which is also pending consideration. The petitioner has filed application for stay of the demand which is not decided. The grievance is that even when no orders are passed in the said application, at the same time, the demand notice dated 19.11.2012 is sent directing the petitioner to pay the amount of tax assessed within 30 days. So far as the amount assessed as tax is concerned, that has already been recovered by the Income-Tax authorities.

CWP-25127-2012

2.

Once the appeal is preferred against the order passed under section 271(1)(c) of the said Act, and the petitioner has filed application for stay of the payment, the least that is expected is to hear the applicant and decide the application on merits. Without allowing the petitioner to avail such a chance, the recovery notice trying to recover the amount by coercive method, may not be appropriate.

3.

In these circumstances, we direct the Commissioner of Income Tax (Appeals) to decide the application for stay within one month from today. No coercive steps shall be taken for recovery of the amount of tax at least after a period of one week after the decision.

4.

Writ petition is, accordingly, disposed of.

( A.K. SIKRI )

CHIEF JUSTICE

December 18, 2012

(RAKESH KUMAR JAIN) pc

JUDGE

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