Cavinkare Private Limited v. The Assistant Commissioner of Income-tax, Central Circle 2(1), Chennai
[Citation -2019-LL-0214-40]

Citation 2019-LL-0214-40
Appellant Name Cavinkare Private Limited
Respondent Name The Assistant Commissioner of Income-tax, Central Circle 2(1), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 14/02/2019
Assessment Year 2016-17
Judgment View Judgment
Keyword Tags opportunity of being heard • expenditure incurred • application for stay • scientific research • recovery proceeding • statutory appeal • filing of appeal • stay of demand
Bot Summary: 2066 of 2019 M/s.Cavinkare Private Limited Rep.by its Authorized Representative Mr.S.S.Vinoth Kumar ....Petitioner -Vs- The Assistant Commissioner of Income-Tax, Central Circle 2(1), Chennai 600 034 ...Respondent PRAYER in WPs: Writ Petitions filed under Article 226 of the Constitution of India praying for a writ of Certiorari Mandamus to call for the records of the petitioner on the file of the respondent in PAN:AAACB3754B and quash the impugned order passed u/s.143(3) dated 30.12.2018 for the assessement year 2016-17 in ITBA/AST/S/143/2018-19/1014669391(1). A writ petition in No.1865/2019 along with stay petition in WMP No.2066/2019 are filed before the Hon'ble Court of Madras against the above assessment order and came up for hearing on 24.01.2019. Our legal counsel's communication on the status of Writ Petition and Stay petition which explains the current position is enclosed as Annexure-1 for your kind consideration. As the aforementioned writ stay petitions are heard and pending before the Hon'ble High Court of Madras, the petitioner most humbly prays that this respectful authority may not to treat the petitioner as assessee-in-default and be pleased to keep the collection proceedings on the demanded tax amount of Rs.70,06,02,535/- in abeyance until the disposal of writ stay petitions by the Hon'ble Court. Learned counsel for the petitioner however, states on instructions that the petitioner proposes to challenge the impugned order of assessment forthwith and has not done so till date only on account of the pendency of this writ petition. In 7 remittance of Rs.5,00,00,000/- as aforesaid, the Assessing Officer will take up for consideration the stay petition filed by the petitioner on 29.01.2019 for disposal on merits, also keeping in mind the Circulars issued by Central Board of Direct taxes. The petition shall be disposed of as expeditiously as possible after affording an opportunity of personal hearing to the petitioner.


1 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 14.02.2019 CORAM HON'BLE Dr. JUSTICE ANITA SUMANTH W.P.No.1865 of 2019 and W.M.P.No.2066 of 2019 M/s.Cavinkare Private Limited Rep.by its Authorized Representative Mr.S.S.Vinoth Kumar ....Petitioner --Vs-- Assistant Commissioner of Income-Tax, Central Circle 2(1), Chennai 600 034 ...Respondent PRAYER in WPs: Writ Petitions filed under Article 226 of Constitution of India praying for writ of Certiorari Mandamus to call for records of petitioner on file of respondent in PAN:AAACB3754B and quash impugned order passed u/s.143(3) dated 30.12.2018 for assessement year 2016-17 in ITBA/AST/S/143/2018-19/1014669391(1). For Petitioner : Mr.R.Vijayaragavan Respondent : Mr.A.P.Srinivas Standing Counsel ORDER This writ petition is filed challenging order of assessment under Section 143(3) of Income Tax Act, 1961 ('Act'), in respect of Assessment Year 2016-17. http://www.judis.nic.in 2 2. At threshold, though impugned order of assessment is subject to statutory appeal, no appeal has been filed till date challenging same, despite there being no interim order of stay passed by this Court. 3. Various challenges have been raised to additions made in impugned assessment order. main ground of challenge relates to addition made under head 'unaccounted sales of unaccounted production of dairy products'. Mr.R.Vijayaragavan, learned counsel appearing for petitioner submits that that aforesaid addition, quantified at figure of Rs.103,36,13,286/- has been made without issuance of show cause notice and without reference to detailed submissions advanced by assessee in that regard. He points out to errors in methodology adopted for computation that I am not inclined to go into insofar as same involves appreciation of facts which this Court will not do in Writ Petition under Article 226 of Constitution of India. 4. second ground canvassed is in relation to disallowance made under section 35(2AB) of Act in respect of deduction for expenditure incurred on scientific research and development. specific submission made is that petitioner is entitled for deduction claimed and in event that Assessing Officer was to consider question of whether, or if so, to what extent, any activity constitutes or constituted, or any asset is or was being used for purposes of scientific research, Board shall refer question to Central Government/prescribed Authority and decision of Board/prescribed Authority http://www.judis.nic.in 3 in this regard shall be final. In present case, this statutory exercise has not, according to petitioner, been carried out by Assessing Authority. Other disallowances are also under challenge before me that are not pursued very seriously. 5. Mr.Vijayaragavan, also states that petitioner had approached Assessing Authority for grant of stay vide petition dated 30.01.2019. request was rejected by Officer on 06.02.2019 stating as follows:- 'Ref: Your letter dt.29.01.2019 ------------ Please refer to above, 1. Kindly refer to above assessment order of A.Y.2016-17 passed in case of M/s.Cavinkare Pvt.Ltd. 2. writ petition in No.1865/2019 along with stay petition in WMP No.2066/2019 are filed before Hon'ble Court of Madras against above assessment order and came up for hearing on 24.01.2019. Our legal counsel's communication on status of Writ Petition and Stay petition which explains current position is enclosed as Annexure-1 for your kind consideration. 3. As aforementioned writ & stay petitions are heard and pending before Hon'ble High Court of Madras, petitioner most humbly prays that this respectful authority may not to treat petitioner as assessee-in-default and be pleased to keep collection proceedings on demanded tax amount of Rs.70,06,02,535/- in abeyance until disposal of writ & stay petitions by Hon'ble Court. 4. petitioner further prays that this respectful authority may be pleased to grant opportunity of being heard before disposal of this petition. Assessee's submission was considered and it was noted that:- (i) assessee has filed W.P. against assessment order and for stay of demand before Hon'ble Madras High Court, which was heard on 24.01.2019 but Hon'ble High Court has not granted any stay from recovery of outstanding demand. (ii) assessee has filed stay petition before undersigned on 29.01.2019 for granting stay demand, which is not valid because issue is subjudicied before Hon'ble Court. Since, stay petition is pending before High Court undersigned has no jurisdiction to grant stay from recovery proceedings. (iii) Further, with regards to assessee's request granting opportunity of hearing before disposal stay petition has no relevance. http://www.judis.nic.in 4 Since undersigned has seized of jurisdiction for granting stay from recovery proceeding on day on which W.P. was filed by assessee. In view above facts, undersigned has no power to grant stay from recovery proceeding subjudicied matter. Further, as Hon'ble High Court has not granted stay from recovery of proceeding, assessee in default. Therefore, you are requested to pay entire demand within three day of receipt of this letter failing which recovery proceeding will be initiated as provision of I.T.Act' 6. Consequent to above, learned counsel for assessee states that all bank accounts of assessee, in ICICI Bank, IDBI, Federal Bank, State Bank of India and Punjab National Bank have been attached on 12.02.2019 vide orders of attachment passed under section 226(3) of Act. According to him, petitioner does not have any means of doing business and attachment of bank accounts has brought its business to grinding halt. Mr.Vijayaraghavan thus prays that some interim protection be granted in so far as recovery is concerned, particularly since returns of income in respect of later assessment provide for substantial refund of amounts remitted by petitioner. 7. Mr.A.P.Srinivas, learned counsel appearing for respondent has filed detailed counter affidavit, sum and substance of which is that order of Assessing Officer is correct and that if petitioner were aggrieved with same, proper course of action would be to avail appellate remedy before first Appellate Authority by way of statutory appeal. As far as stay is concerned, provisions of Section 220(6) mandate that petition for stay be filed by assessee upon condition that assessee has challenged assessment by way of appeal. http://www.judis.nic.in 5 Mr.Srinivas thus urges that writ petition be dismissed in limine. 8. Heard learned counsel. perusal of assessment order would indicate that at least nine hearings have been granted to assessee prior to framing of order of assessment. I am thus not inclined to accept submissions advanced by petitioner in relation to violation of principles of natural justice. However, I have in conclusion, permitted petitioner to file statutory appeal within period of one week from today and if so filed, Commissioner of Income Tax (Appeals) shall take same on file without reference to limitation and dispose it in accordance with law. 9. application for stay of demand in terms of section 220(6) of Act states that Assessing Officer may, at his discretion, consider petition for stay only upon assessee presenting appeal to first appellate authority under Section 246 of Act. In present case, admittedly, appeal is yet to be filed. Learned counsel for petitioner however, states on instructions that petitioner proposes to challenge impugned order of assessment forthwith and has not done so till date only on account of pendency of this writ petition. 10. In facts and circumstances as I have noted above, this Court has proposed via media as far as recovery is concerned, bearing in mind interests of both parties. It was suggested that petitioner remit sum of Rs.5,00,00,000/- to Income tax Department upon receipt of which assessing officer will lift attachments on three bank accounts of petitioner namely, accounts in http://www.judis.nic.in 6 ICICI, HDFC and SBI. petitioner is permitted to file appeal within one week from today and if lime limit as imposed is complied with, Commissioner of Income Tax (Appeals) will take appeal on file without reference to limitation. Further orders in regard to stay or otherwise, of recovery of disputed demand, will be considered by assessing officer upon proof that appeal has been filed and amount of Rs.5,00,00,000/- remitted. above proposal finds acceptance with both learned counsel, learned standing counsel, Mr.Srinivas, as well as learned counsel for petitioner, latter having taken instructions in this regard from representatives of petitioner who are present in Court. 11. In summary following order is passed with concurrence of all concerned: (i) petitioner shall remit sum of Rs.5,00,00,000/- (Rupees Five Crores only). Upon compliance of this condition, following shall come into play: (ii) present writ petition has been filed on 22.01.2018 which is within period of statutory limitation provided for filing of first appeal. Accordingly, petitioner is permitted to file appeal on or before 25.02.2019 and if so filed, Commissioner of Income Tax (Appeals) shall take same on file without reference to limitation and dispose it in accordance with law (iii) Upon presentation of proof of filing of appeal as well as http://www.judis.nic.in 7 remittance of Rs.5,00,00,000/- as aforesaid, Assessing Officer will take up for consideration stay petition filed by petitioner on 29.01.2019 for disposal on merits, also keeping in mind Circulars issued by Central Board of Direct taxes. petition shall be disposed of as expeditiously as possible after affording opportunity of personal hearing to petitioner. 12. This writ petition is disposed of with above directions. Connected miscellaneous petition is closed. No costs. 14.02.2019 Speaking order/Non speaking order Index: Yes/No Internet: Yes/No ska Note: Issue Order Copy on 19.02.2019. To Assistant Commissioner of Income-Tax, Central Circle 2(1), Chennai 600 034. http://www.judis.nic.in 8 DR.ANITA SUMANTH. J, ska W.P.No.1865 of 2019 and W.M.P.No.2066 of 2019 14.02.2019 http://www.judis.nic.in Cavinkare Private Limited v. Assistant Commissioner of Income-tax, Central Circle 2(1), Chennai
Report Error