M/S. JINDAL PRIME FOOD PVT. LTD., vs. INCOME TAX OFFICER, BIKANER

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CW/12274/2015HC RajasthanRJHC01056852201528 October 20154 pages
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What did the High Court hold?

The High Court, considering the submissions and the peculiar facts, disposed of the writ petition. It directed the appellate authority (CIT(A)) to hear and decide the appeal preferred by the assessee under Section 246-A of the Act of 1961 as expeditiously as possible, preferably within 90 days from the date of the order. Furthermore, the Court directed that during the pendency of the appeal, the AO should not take any coercive action against the assessee pursuant to the assessment order dated 31.03.2015. The Court did not explicitly decide on the merits of the AO's refusal under Section 220(6) but provided interim relief by expediting the appeal and staying coercive recovery.

What were the facts?

M/s. Jindal Prime Food Private Limited (the assessee) filed a writ petition before the Rajasthan High Court at Jodhpur challenging an order dated 6th October, 2015, passed by the Income-tax Officer, Ward-2(1), Bikaner (AO). The AO had rejected the assessee's request under Section 220(6) of the Income-tax Act, 1961. The assessee had filed a return for Assessment Year 2012-13 showing NIL gross income. The AO, through an assessment under Section 143(3), made additions resulting in an assessed income of Rs. 1,35,00,000/-. The assessee had appealed this assessment order before the Commissioner Income Tax Appeals (CIT(A), which was pending. The grievance was that despite the pending appeal, the AO was initiating coercive recovery actions. The assessee sought indulgence from the AO under Section 220(6) to defer recovery, which was declined.

What were the issues?

1. Whether the AO was justified in declining the assessee's request for deferment of recovery of tax under Section 220(6) of the Income-tax Act, 1961, during the pendency of the appeal before the CIT(A)? Assessee's Contention: The assessee argued that in the given circumstances, approaching the AO under Section 220(6) was the only remedy. Given the substantial tax demand, some indulgence was necessary to prevent the appeal from being frustrated. The assessee relied on the provision of Section 220(6) of the Act. Revenue's Contention: The revenue contended that courts are generally reluctant to pass interim orders in taxing and fiscal statutes. However, it was suggested that directing the Appellate Authority to expedite the hearing of the appeal would be appropriate.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 220(6),Section 246-A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR :: ORDER:: S.B. CIVIL WRIT PETITION No.12274/2015 M/s. Jindal Prime Food Private Limited V/s. Income Tax Officer, Ward-2(1) Date of Order

:::: 28.10.2015 P R E S E N T

HON'BLE MR. JUSTICE P.K. LOHRA

Mr. Lokesh Mathur, for the petitioner. Mr. Sheetal Kumbhat, for the respondent-Department.

- - BY THE COURT: Issue notice. Mr. Sheetal Kumbhat, standing counsel for the Income-tax Department, accepts notice on behalf of the respondents. Therefore, service is complete. The petitioner-assessee has laid this writ petition imploring annulment of impugned order dated 6th of October, 2015 (Annex.4) passed by Income-tax Officer, Ward-2(1), Bikaner (AO).

2 By the order, the AO has turned down the request of the assessee under subs-section (6) of Section 20 of the Income-tax Act, 1961 (for short, 'Act of 1961'). The undisputed facts are that the petitioner has submitted his return for the Assessment Year 2012- 13 showing his gross income NIL. The AO while making the assessment under Section 143(3) of the Act of 1961 has made huge additions and ultimately assessed the income of the petitioner-assessee for a sum of Rs.1,35,00,000/-. Being aggrieved from the said assessment order, the petitioner has laid an appeal before the Commissioner Income Tax Appeals, Bikaner under Section 246-A of the Act of 1961 and the said appeal is still pending consideration. The grievance of the petitioner is that during the pendency of the appeal, the AO has proceeded to take coercive action against the petitioner-assessee for recovery of the tax as per the assessment order. Learned counsel for the petitioner Mr. Lokesh Mathur has urged that the only remedy available to the assessee in these circumstances was to approach the AO under sub-section (6) of Section 220 of the Act of 1961

3 but the said attempt made by the petitioner has proved to be abortive and the prayer has been declined. Mr. Mathur has, therefore, urged that looking to the huge demand of tax, some indulgence may be granted to the petitioner-assessee during the pendency of the appeal else the whole purpose of appeal would be frustrated. Mr. Kumbhat, learned standing counsel for the Income-tax Department, has submitted that in taxing and fiscal statutes, the courts are normally reluctant to pass interim orders and therefore, it is not desirable to grant indulgence to the petitioner-assessee. However, Mr. Kumbhat submits that it may be in the fintess of things to direct the Appellate Authority to expedite hearing of the appeal. Considering the submissions at bar and the peculiar facts and circumstances of the instant case, in my opinion, this petition can be conveniently disposed of with a direction to the appellate authority to hear and decide the appeal preferred by the petitioner under Section 246-A of the Act of 1961 as expeditiously as possible, preferably within a period of 90 days from today. It is further directed that during the pendency of the appeal, the AO may not take any coercive action

4 against the petitioner-assessee, pursuant to the assessment order dated 31.03.2015. The petition is, accordingly, disposed of.

(P.K. LOHRA), J. a.asopa/-

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