2011 (1) TMI 44 - HC - Income Tax

Pre-deposit - direction of the tribunal (ITAT) to pre deposit Rs. 4 crores against total demand including penalty exceeding Rs. 10 crores - held that - cause of justice would be best subserved if the petitioner shall deposit a sum of Rs.2.5 crores by end of April, 2011 and on such deposition being made, the tribunal shall proceed to hear the appeal

Summary

Issues:
Petitioner seeking quashing of tribunal's order directing deposit of Rs.4 crores for appeal hearing.

Analysis:
The petitioner approached the High Court seeking a writ of certiorari to challenge the tribunal's order dated 1st November, 2010, which required the petitioner to deposit Rs.4 crores as a condition for hearing the appeal. The petitioner's counsel argued that the tribunal erred in not waiving the entire amount and misinterpreted the concept of handicap, contending that financial hardship should be considered along with the merits of the case. On the other hand, the Revenue Department's counsel pointed out that the total demand, including penalties, exceeded Rs.10 crores, justifying the tribunal's directive for the deposit. After hearing both parties, the court opined that justice would be served if the petitioner deposited Rs.2.5 crores by the end of April, 2011. The court directed that upon such deposit, the tribunal should proceed with the appeal hearing. Additionally, if the appeal had been dismissed before the deposit was made, it would be revived for consideration on its merits. The High Court disposed of the writ petition with this modified order, emphasizing that no costs were to be awarded in the matter.