M/s. Panasonic India Pvt. Ltd. v. The Chief Commissioner of Income-tax, Chennai/ The Commissioner of Income-tax (Appeals), Chennai/ The Deputy Commissioner of Income-tax, Company Circle-V(I), Chennai
[Citation -2015-LL-0212-17]

Citation 2015-LL-0212-17
Appellant Name M/s. Panasonic India Pvt. Ltd.
Respondent Name The Chief Commissioner of Income-tax, Chennai/ The Commissioner of Income-tax (Appeals), Chennai/ The Deputy Commissioner of Income-tax, Company Circle-V(I), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 12/02/2015
Judgment View Judgment
Keyword Tags obsolete stock • stay petition • demand notice
Bot Summary: 2 For Petitioner : Mr. L.Maithili Associates For Respondent : Mr.Promod Kumar Chopda ORDER The petitioner has come forward with this writ petition seeking writ of Certiorarified Mandamus calling for the records of the third respondent culminating in his order dated 28.01.2015 and quash the same and direct the third respondent not to enforce the demand for the assessment year 2010-2011 in terms of demand notice dated 20.03.2014, pending disposal of the appeal filed against the Assessment Order dated 20.03.2014 before the second respondent. The third respondent issued a show cause notice dated 10.03.2014 to the petitioner, for which a reply was sent on 13.03.2014 by the petitioner. On 04.02.2015, the petitioner was intimated that there was an order dated 28.1.2015 passed by the Deputy Commissioner of Income Tax, Corporate Circle 5(1) directing the petitioner to pay 50 of the demand, immediately, failing which, coercive action will be initiated against the petitioner. The order dated 28.01.2015 was received by the petitioner only on 04.02.2015 and the learned counsel for the petitioner submitted that they informed the Assessing Officer that they are going to file a writ petition challenging the said order. The contention of the petitioner is that the petitioner has approached before this Court, challenging the impugned order on various grounds and the filing of the writ petition has been intimated to the Authority concerned and the Authority should have waited for the hearing of the matter and should not have attached the entire amount of over Rs.10 crores. Learned counsel for the petitioner has further contended that no opportunity was given to the petitioner before attaching the entire amount and when the authority took more than 7 years to communicate the order, they could have wait for few days and the order was passed under coercively. The respondents may be directed to dispose of the appeal within a time frame and in case, the petitioner succeeds, the amount attached would be to the petitioner.


1 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.02.2015 CORAM HONOURABLE MR.JUSTICE S.VAIDYANATHAN W.P.No.3152 of 2015 and M.P.No.1 of 2015 M/s.Panasonic India Pvt. Ltd., 6th Floor, SPIC Building Annexe, No.8, Mount Road, Guindy, Chennai-600 032, Rep. by its Authorised Signatory .. Petitioner Vs 1. Chief Commissioner of Income Tax 121, Mahatma Gandhi Road, Nungambakkam, Chennai-34. 2. Commissioner of Income Tax (Appeals) 121, Mahatma Gandhi Road, Numgambakkam, Chennai-600 034. 3. Deputy Commissioner of Income-Tax, Company Circle-V(I), 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. .. Respondents Petition filed under Article 226 of Constitution of India to issue Writ of Certiorarified Mandamus calling for records of third respondent culminating in his order dated 28.01.2015 and quash same and direct third respondent not to enforce demand for assessment year 2010-2011 in terms of demand notice dated 20.03.2014, pending disposal of appeal filed against Assessment Order dated 20.03.2014 before second respondent. 2 For Petitioner : Mr. L.Maithili & Associates For Respondent : Mr.Promod Kumar Chopda ORDER petitioner has come forward with this writ petition seeking writ of Certiorarified Mandamus calling for records of third respondent culminating in his order dated 28.01.2015 and quash same and direct third respondent not to enforce demand for assessment year 2010-2011 in terms of demand notice dated 20.03.2014, pending disposal of appeal filed against Assessment Order dated 20.03.2014 before second respondent. 2.The petitioner, Private Limited Company registered under Companies Act, 1956. As assessee, petitioner has filed its return for assessment year 2010-2011 which is in question. third respondent issued show cause notice dated 10.03.2014 to petitioner, for which reply was sent on 13.03.2014 by petitioner. authority has passed Assessment Order confirming assessment in show cause notice and they have also made demand notice on 20.03.2014, directing petitioner to pay Rs.10,74,60,450/- within period of 30 days from date of receipt of copy of said notice, failing which, recovery proceedings will be initiated. 3 3.Challenging said Assessment Order, appeal has been preferred before second respondent-the Commissioner of Income- Tax (Appeals) and petitioner is also sought for interim order of stay and also requested for personal hearing. 4.Learned counsel for petitioner submitted that before Authority, issue was discussed and thereafter, no order was passed and no communication was sent to them. stay petition was rejected vide order dated 8.4.2014. Challenging same, petitioner had approached before this Court in W.P.No.11228 of 2014 and this Court by order dated 21.4.2014 remanded matter to second respondent- Assessing Officer to consider stay application on merits. On 04.02.2015, petitioner was intimated that there was order dated 28.1.2015 passed by Deputy Commissioner of Income Tax, Corporate Circle 5(1) directing petitioner to pay 50% of demand, immediately, failing which, coercive action will be initiated against petitioner. In fact, order dated 28.01.2015 was received by petitioner only on 04.02.2015 and learned counsel for petitioner submitted that they informed Assessing Officer that they are going to file writ petition challenging said order. 4 5.After receipt of that communication, giving go bye to impugned order, entire amount originally assessed, which was over and above Rs.10 crores was attached by respondents. contention of petitioner is that petitioner has approached before this Court, challenging impugned order on various grounds and filing of writ petition has been intimated to Authority concerned and Authority should have waited for hearing of matter and should not have attached entire amount of over Rs.10 crores. Learned counsel for petitioner has further contended that no opportunity was given to petitioner before attaching entire amount and when authority took more than 7 years to communicate order, they could have wait for few days and order was passed under coercively. Even otherwise, respondent instead of attaching Rs.5 crores which is condition of impugned order, has attached entire amount of over Rs.10 crores, without going into merits and disputed question of fact. 6.Learned counsel for respondents contended that original order was passed in March, 2014 and Assessment Year was 2010-11 and that more than four years have gone by and petitioner is bound to pay amount demanded. respondents may be directed to dispose of appeal within time frame and in case, petitioner succeeds, amount attached would be to petitioner. He further 5 submitted that since there is no interim order for stay of 50% of amount, Authority may be directed to refund of 50% of amount attached to petitioner and remaining amount remains with respondent shall be disbursed till disposal of statutory appeal. 7. Learned counsel for petitioner in reply contended that Assessment Order is non-speaking order. petitioner had valued "slow moving items" and made provision for same which was duly certified by Auditor's Report, in due compliance as stipulated in Accounting Standard-2. This provision was made on scientific basis and being followed every year. dis-allowance of aforesaid provision for slow moving items entirely based on inapplicable ruling in case of North Arcot District Co.operative Supply & Marketing Society Ltd., vs. CIT. In that case, there was deficit of stock at year end and assessee created reserve for same, while at same time showing stock at original level in books of accounts. assessee therein created reserves for deficit in stock without writing off stock in books, although there was deficit in stock and stock never existed to that extent. 8. In present case on hand, being Electronics Industry, certain items become obsolete and petitioner has to make necessary 6 provision to write down value of such items in books of accounts, which is essentially as per Accounting Standard-2. According to petitioner, creating provision for slow moving items is allowable expenditure for purpose of income-tax and provision made for obsolete stock items or inventory is allowable and is not in contingent nature. petitioner stated that without considering submissions and legal provisions, third respondent has rejected stay application. 9. Heard both sides. 10. Without going into merits of case, I am of view that authority should have considered legal submissions raised by petitioner before passing impugned order. In any event since matter is sub judice before appellate forum, authority should have considered whether 50% of demand could be ordered, taking into account totality of circumstances. Though this Court is bound to consider situation prevalent on date of order, taking note of subsequent events, namely, attaching 100% of amount, when petitioner has stated that order has got to be tested in appeal, attaching 100% amount would clearly shows that respondent was interested in collecting entire amount, I am of view that 7 impugned order has to be set aside and matter has to be remanded to appellate authority to consider case afresh on merits and in accordance with law. 11. Even though this Court feels that revenue to Government has to be protected, due to act of Authorities in not allowing parties to raise objection nor considering same, amounts are being ordered to be attached and on that technical ground, entire efforts taken by Authorities had to fall to ground. 12. I reiterate that without going into merits of case, I am of view that opportunity should be given to petitioner and that matter should be heard afresh and orders to be passed in accordance with law. Of course, Authority is empowered to pass interim order, but detailed order has to be passed after considering points raised by petitioner. 13. In view of discussions made supra, impugned order is set aside and matter is remanded to Authority to pass orders afresh within period of two weeks from date of receipt of copy of this order. 8 S.VAIDYANATHAN, J. kal 14. With above observations, writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed. 12.02.2015 Index : Yes/No Internet : Yes/No kal To 1. Chief Commissioner of Income Tax 121, Mahatma Gandhi Road, Nungambakkam, Chennai-34. 2. Commissioner of Income Tax (Appeals) 121, Mahatma Gandhi Road, Numgambakkam, Chennai-600 034. 3. Deputy Commissioner of Income-Tax, Company Circle-V(I), 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. W.P.No.3152 of 2015 and M.P.No.1 of 2015 M/s. Panasonic India Pvt. Ltd. v. Chief Commissioner of Income-tax, Chennai/ Commissioner of Income-tax (Appeals), Chennai/ Deputy Commissioner of Income-tax, Company Circle-V(I), Chennai
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