2009 (9) TMI 61 - HC - Income Tax

Stay of recovery held that - Admittedly, the appeals are pending and the petitioner is a Public Sector Undertaking owned by Government of Tamil Nadu and is having huge immovable properties and movable properties such as Transport buses department ought to have considered the request of the petitioner for the stay of the recovery proceedings - set aside the orders passed by the 4th respondent in W.P.(MD)No.2209 of 2009, dated 09.01.2009 and the 5th respondent in W.P.(MD)No.2210 of 2009 dated 18.02.2005 and directed the respondents to consider the request of the petitioner for the grant of stay and pass a speaking order - it is ordered, directing the 3rd respondent to dispose of the appeal pending on his file, within a period of four weeks from the date of the receipt of a copy of this order.

Summary

Issues:
State Government Transport Corporation aggrieved by Assessment Orders under Income Tax Act for years 2001-2006, interpretation of amalgamation resulting in multiple assessment orders, coercive recovery proceedings by tax authorities, refusal of stay petition, pending appeals, direction for disposal of appeal by 3rd respondent.

Analysis:
The petitioner, a State Government Transport Corporation, challenged Assessment Orders framed by the 4th & 5th respondents under the Income Tax Act for the years 2001-2006. The petitioner contended that various divisions of the Transport Corporation were merged with the Kumbakonam Division, leading to different interpretations by the respondents and multiple assessment orders. Appeals were filed by the petitioner against these orders, with some pending before the authorities. The petitioner also sought a stay on the assessment order for 2004-2005, which was pending. The respondents initiated recovery proceedings during the pendency of the appeals, affecting the petitioner's financial status and day-to-day affairs, leading to the filing of writ petitions.

The petitioner argued that the respondents did not consider the prayer for stay of collection of disputed arrears properly, despite being a Government Undertaking with significant assets. The respondents justified their actions by stating that tax arrears were substantial, exceeding 10 crores, and recovery proceedings were necessary. The court noted that the authorities did not provide reasons for rejecting the stay petition, emphasizing that it was their duty to do so. Considering the petitioner's status as a Public Sector Undertaking with substantial assets, the court set aside the orders of the 4th and 5th respondents and directed them to reconsider the request for stay and provide a reasoned decision.

Furthermore, the petitioner requested the court to direct the 3rd respondent to expedite the disposal of the pending appeals. The court agreed to this request, ordering the 3rd respondent to dispose of the appeal within four weeks from the date of the court's order. With these directions, the court disposed of the writ petitions and closed the connected Miscellaneous Petitions, without imposing any costs on either party.