INDO AUERLICT MANUFACTURING COMPANY THRO ITS PARTNER vs. INCOME TAX OFFICER WARD-2 (4)

PDF · subscribers
SCA/3432/2012HC GujaratGJHC24008986201220 June 2012Author: HONOURABLE MR. JUSTICE VIJAY MANOHAR SAHAI,HONOURABLE MR. JUSTICE N.V.ANJARIA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that once the Assessing Officer had passed an order directing the deposit of 50% of the tax demand, and the petitioner had complied with this order by depositing the amount, it was not permissible for the Assessing Officer to review his own order and subsequently direct the deposit of 100% of the tax demand. This was particularly so when an appeal against the assessment order was pending before the Commissioner of Income-tax (Appeals). The Court found this action to be unjustified. The writ petition was disposed of with a direction that the further 50% of the demanded tax, as directed by the Assessing Officer's order dated February 15, 2012, shall remain in abeyance until the decision of the appeal by the Commissioner of Income-tax (Appeals) or any further order from the Appellate Authority or the Tribunal. The ratio decidendi is that an Assessing Officer cannot unilaterally review an order granting a partial stay of demand once the assessee has complied with it, especially during the pendency of an appeal.

What were the facts?

The petitioner, Indo Auerlict Manufacturing Company, received an assessment order and a demand notice under Section 156 of the Income Tax Act, 1961, on December 30, 2011, for Rs. 5,08,12,640. An appeal was filed before the Commissioner of Income-tax (Appeals) on January 24, 2012. Subsequently, an application was made on January 30, 2012, under Section 220(6) of the Act for staying the tax demand. The petitioner deposited 10% of the demand to establish bonafides. The Assessing Officer initially directed the deposit of 50% of the demand by February 25, 2012, which the petitioner complied with on February 22, 2012. However, the Assessing Officer later reviewed this order and directed the deposit of 100% of the demanded tax.

What were the issues?

1. Whether the Assessing Officer was justified in reviewing his earlier order directing deposit of 50% of the tax demand and subsequently directing the deposit of 100% of the tax demand while the appeal was pending before the Commissioner of Income-tax (Appeals)? (Question of law and fact, concerning Section 220(6) of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that once the Assessing Officer had passed an order for depositing 50% of the demand and the petitioner had complied, it was not open for the Assessing Officer to review his order and demand the full amount while the appeal was pending. 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 156,Section 220(6)

AI-generated summary — verify with the full judgment below

SCA/3432/2012 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 3432 of 2012 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ======================================

1.

Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2. To be referred to the Reporter or not ? NO 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ====================================== INDO AUERLICT MANUFACTURING COMPANY THRO ITS PARTNER - Petitioner Versus INCOME TAX OFFICER WARD-2 (4) & 1 - Respondents ====================================== Appearance : MR TANVISH BHATT FOR M/S WADIA GHANDY &CO for Petitioner. MR SUDHIR M MEHTA for Respondents. ====================================== CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA

SCA/3432/2012 2/3 JUDGMENT Date : 20/06/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI)

We have heard Mr. Tanvish Bhatt, learned counsel appearing for M/s. Wadia and Ghandy & Company for the petitioner and Mr. Sudhir Mehta, learned Standing Counsel appearing for the revenue. Learned counsel Mr. Tanvish Bhatt submitted that against the assessment order dated 30.12.2011, the petitioner filed an appeal before the Commissioner of Income-tax (Appeals-2) on 24.01.2012. Along with the Assessment Order, the petitioner also received demand notice under Section 156 of the Act on 30.12.2011 to the tune of Rs.5,08,12,640/-. During pendency of the said appeal, the petitioner filed an application on 30.1.2012 under Section 220 (6) of the Act before the respondent No.1 for staying the tax demand of Rs.5,08,12,640/- made in pursuance of the assessment order. For establishing the bonafides, the petitioner also deposited 10% amount of the demand. Thereafter, the Assessing Officer vide order dated 10.2.2012 came to the conclusion that the petitioner is required to deposit 50% of the demand on or before 25.2.2012. Accordingly, the petitioner has deposited 50% of the demanded tax on 22.2.2012. Thereafter, it appears that the Assessing Authority has reviewed his order and by order dated 15.2.2012 directed the petitioner to deposit 100% amount which was demanded as tax.

SCA/3432/2012 3/3 JUDGMENT In our opinion, once the Assessing Officer has passed an order for depositing 50% amount of tax demanded from the petitioner and since the same was deposited by the petitioner, it was not open to the Assessing Officer to review his order and direct to deposit 100% amount of tax demanded from the petitioner while the appeal is pending before the Commissioner of Income-tax (Appeals). This writ petition is disposed of with a direction that till the decision of the appeal by the Commissioner of Income-tax (Appeals), further 50% amount demanded by the Assessing Officer by order dated 15.2.2012 shall remain in abeyance which shall be subject to the decision in appeal or any order passed by the Appellate Authority or by the Tribunal. Notice discharged. There shall be no order as to costs. [V. M. SAHAI, J.] [N. V. ANJARIA, J.] Savariya

More judgments on Section 156

All 694 judgments and leading authorities on Section 156 →

Recent GST High Court judgments

Search GST case law →