2023 (7) TMI 1212 - HC - Income Tax

Recovery proceedings - demand payment u/s 143(1)(a) - petitioner company had been wound up - Writ of Mandamus directing the respondent to permit the petitioner company to pay the sum of Rs.1,00,00,000/- in equal ten monthly installments - HELD THAT - Admittedly, the petitioner company has been wound up and the entire affairs of the company now rest with the official liquidator. The petitioner company does not have any property, which can be easily sold to clear the dues of the respondent herein. However, the intent of the petitioner appears to be sincere despite the odds stacked against them. Therefore, this Court is of the view that the petitioner must be permitted to show their bona fides and settle the dues. With this intent and in the interest of justice, the Writ Petition is allowed permitting the petitioner to pay the amount in installments. The calculation sheet provided by the respondent is taken as the calculation for the repayment of the amount. In the calculation submitted by the respondent, the first installment payable is a sum of Rs.10,00,000/- together with interest of a sum of Rs. 11,29,919/-, totally a sum of Rs.22,30,037/-. This amount would be a little too steep for the petitioner to repay. Therefore, the first installment of Rs.22,30,037/- is split into two installments. The first of which will be a sum of Rs.11,29,919/- and the remaining shall be paid as the 11th installment and the amount due under the 11th installment would be a sum of Rs.10,21,908/-.

Summary

Issues:
The issues involved in the judgment are the petitioner's request for a Writ of Mandamus to pay a large sum in installments, the winding up of the petitioner company, the respondent's assessment order for tax payment, and the petitioner's inability to make the full payment.

Writ of Mandamus for Installment Payment:
The petitioner, a company wound up by court orders, sought a Writ of Mandamus to pay Rs.1,00,00,000/- in ten monthly installments of Rs.10,00,000/- each starting from April 2023. The petitioner faced difficulty in repaying a substantial amount demanded by the respondent under the Income Tax Act, 1961, for the assessment year 2021-2022.

Official Liquidator's Involvement:
The official liquidator was appointed to handle the company's affairs, making any legal action without involving the official liquidator invalid. The respondent issued an assessment order demanding payment of Rs. 1,33,45,480/- under Section 143(1)(a) of the Income Tax Act, 1961, due by 14.10.2022.

Request for Modified Payment Schedule:
The petitioner requested to pay the amount in installments due to financial constraints. Initially, the respondent directed payment in three installments, which the petitioner partially paid. The petitioner then proposed to pay the remaining Rs. 1,00,00,000/- in ten monthly installments starting from April 2024.

Court's Decision and Payment Schedule:
The Court acknowledged the petitioner's genuine intent to settle the dues despite challenges. The Writ Petition was allowed, permitting the petitioner to pay in installments based on the respondent's calculation sheet. The first installment of Rs.22,30,037/- was divided into two parts, with a warning that default on any installment would nullify the concession granted.

Conclusion:
The Court granted the petitioner's request to pay the outstanding amount in installments, emphasizing the need for timely payments to maintain the arrangement. The Court did not impose any costs on the parties involved, ensuring a fair resolution to the financial dispute.