1 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.10.2015 CORAM: HON'BLE MR. JUSTICE R. MAHADEVAN W.P.No.34225 of 2015 and M.P.Nos.1 & 2 of 2015 M/s.Lalitha Jewellery Mart Private Limited [ Petitioner ] Rep. by its Director P. Rajeswaran No.123 Usman Road Panagal Park T.Nagar Chennai-17. Vs 1 Commissioner of Income Tax (Appeals)-8 O/o Commissioner of Income Tax (Appeals)-8 Room No.222 Aayakar Bhavan Main Building 121 M.G.Road Nungambakkam Chennai. 2 Deputy Commissioner of Income Tax O/o Deputy Commissioner of Income Tax Company Circle-II (4) Room No. 514 Wanaparthy Block 121 M.G.Road Nungambakkam Chennai. [ Respondents] Writ Petition filed under Article 226 of Constitution of India seeking writ of certiorari to call for records of 1st respondent dated 01.09.2015 in I.T.A No.74/2013-14 and quash same. For petitioner :Mr.Muralikumaran for McGAN Law Firm For respondents :Mr.T.Pramodkumar Chopda, Sr.SC 2 ORDER Heard Mr.Muralikumaran, learned counsel for petitioner and learned Senior Standing Counsel, who took notice for respondents and with their consent, main writ petition itself is taken up for hearing. 2. This writ petition has been filed challenging order of 1st respondent dated 01.09.2015 in I.T.A No.74/2013-14. 3. petitioner is Company, registered under Tamil Nadu Companies Act, 1956 and assessee on file of 2nd respondent. 2nd respondent passed assessment order for assessment year 2007-08 on 31.12.2009, wherein it is intimated that proceedings would be initiated separately with respect to penalty under Section 271(1)(c) of Act. As against said order of 2nd respondent, petitioner preferred appeal before Commissioner of Income Tax (Appeal)-III, Chennai in I.T.A.No.598/09-10/A-III and on 08.09.2010, order was passed fully allowing issue, partly allowing issue and dismissing other issues raised in appeal. Aggrieved over said rejection of contentions on certain issues, petitioner preferred appeal before Income Tax Appellate Tribunal in I.T.A.No.1871(Mds)/2010 and 3 Tribunal by order dated 15.04.2013 dismissed appeal and allowed cross appeal preferred by Revenue in I.T.A.No.2180(Mds)/2010. Being aggrieved over said order passed in above said appeals, petitioner preferred two tax case appeals before this Court in T.C.A.Nos.435 and 436 of 2013 before this Court, one as against dismissal of appeal preferred by petitioner and another against allowing of appeal preferred by Department. This Court, by order dated 25.02.2014 while admitting appeals has also granted order of interim stay. In meantime, 2nd respondent issued notice dated 30.10.2013, to show cause as to why penalty under Section 271(1)(c) should not be levied in continuation of assessment order passed earlier, for which, petitioner submitted their reply on 31.10.2013. However, without considering any of objections raised by petitioner, 2nd respondent levied penalty vide order dated 31.10.2013. Hence, petitioner was constrained to file appeal before 1st respondent in ITA.No.74/2013-14 and also made representation dated 06.07.2015 along with stay application to 1st respondent to keep in abeyance said tax case appeal on ground that this Court has already admitted tax case appeals filed by petitioner and also granted stay. After filing of stay application, as requested by department, copies of orders were furnished to 4 1st respondent. Thereafter, 2nd respondent fixed hearings on 22.07.2015 and thereafter on 18.08.2015. On both dates, representative of petitioner Company argued stay application. When petitioner Company is expecting orders on stay application, 1st respondent has passed final orders in I.T.A.No.74/2013-14 on 01.09.2015. Hence, petitioner is before this Court. 4. learned counsel for petitioner would submit that impugned order passed by 1st respondent is violative of principles of natural justice. It is submission of learned counsel for petitioner that when assessment order itself is subject matter in appeals pending before Hon'ble Division Bench of this Court, 1st respondent is erred in taking up appeal arising out of order passed in consequential penalty proceedings and deciding same. That apart, according to him, when this Court has granted stay, after admitting appeals arising out of assessment order, before same attains finality, passing orders in consequential penalty proceedings is not only violative of provisions of Income Tax Act, but also illegal. Besides, learned counsel for petitioner would submit that 1st respondent is erred in not considering application taken out by petitioner to keep in abeyance all further 5 proceedings in appeal. Hence, learned counsel for petitioner prays for allowing of writ petition. 5. learned Senior Standing Counsel appearing for department has placed arguments in support of impugned proceedings. 6. This Court considered submissions made by learned counsel on either side and perused materials available on record. 7. Despite fact that above referred Tax Case Appeals are pending before Hon'ble Division Bench of this Court, in which, order of interim stay of collection of tax and interest and recovery of disputed arrears of Rs.3,87,73,321/- was ordered, since petitioner/appellant has already remitted sum of Rs.4 crores after fling of tax case appeals, when stay application was placed before appellate authority with regard to imposition of penalty also intimating pendency of tax case appeals before Hon'ble Division Bench of this Court, without passing any order on stay application, using his discretionary power, 1st respondent/appellate authority, has passed orders in main appeal itself, which is questioned in this writ petition. 6 Since as against said order of 1st respondent, there is alternative remedy available to petitioner before Income Tax Appellate Tribunal and without exhausting same, petitioner has come before this Court, this Court is inclined to pass following order:- "The petitioner is directed to file appeal before Income Tax Appellate Tribunal along with stay application, within period of two weeks from date of receipt of copy of this order and on such filing, same shall be entertained by Appellate Tribunal, without raising any issues with regard to limitation. It is made clear that pending disposal of stay application, there shall not be any recovery". writ petition is disposed of in above terms. No costs. Connected miscellaneous petitions are closed. 28.10.2015 rg To 1 District Collector,Villupuram District Villupuram 2 Commissioner, Geology and Mining Guindy Chennai 32 3 Inspector of Police, Vanur Police Station Vanur Villupuram District 7 R. MAHADEVAN, J. rg W.P.No.34225 of 2015 28.10.2015 M/s. Lalitha Jewellery Mart Private Limited v. Commissioner of Income-tax (Appeals)-8 / Deputy Commissioner of Income-tax