2023 (11) TMI 41 - HC - Income Tax

Stay of Recovery proceedings - appropriate Application for stay - violation of principles of natural justice - dual remedy against the same Assessment order one before this Court and another before the Appellate Commissioner - petitioner submits that the impugned Assessment order preceded a notice which was also replied by the petitioner, however, without considering the same, impugned Assessment order has been passed against the petitioner as in appeal - as submitted that the petitioner has to pre deposit the amount as per the circulars/Notifications issued u/s 119 and the Show Cause Notice u/s 272A(1)(d) imposing penalty issued HELD THAT - The petitioner has an option to file application to stay further recovery proceedings and the impugned Assessment order before the Authority. Decision of LG Electronics India Pvt Ltd Vs. The State of Tamil Nadu and others 2022 (5) TMI 1359 - MADRAS HIGH COURT is invited, wherein, held that in appropriate case, the Authority is empowered to grant suitable relief as far as pre-deposit. No merits in the present writ petition. Therefore, the writ petition is dismissed with liberty to the petitioner to file appropriate Application for stay of all recovery proceedings pursuant to the impugned Assessment order against which the petitioner is in Appeal before the CIT Appeals. If such application is filed, the Authority concerned shall dispose the same in the light of the decision of the Hon'ble Supreme Court in LG Electronics India Pvt Ltd supra .

Summary

Issues:
The petitioner challenged the impugned assessment order dated 16.12.2019 and filed a Statutory Appeal before the CIT Appeals on 02.01.2020. The petitioner has now been issued a notice under section 272A(1)(d) of the Income Tax Act, 1961.

Impugned Assessment Order and Natural Justice:
The petitioner contended that the impugned Assessment order was passed without considering the reply to a prior notice dated 12.12.2019. The petitioner raised a specific plea regarding the violation of principles of natural justice in the appeal.

Dual Remedy and Pre-deposit Requirement:
The respondent argued that the petitioner cannot seek dual remedies against the same Assessment order by approaching both the High Court and the Appellate Commissioner. It was submitted that the petitioner must pre-deposit the amount as per circulars/Notifications issued under Section 119 of the Income Tax Act, 1961.

Stay of Recovery Proceedings and Pre-deposit Relief:
The court considered the arguments from both sides and cited the decision of the Hon'ble Supreme Court in LG Electronics India Pvt Ltd Vs. The State of Tamil Nadu and others, which empowers the Authority to grant relief in pre-deposit cases. The court dismissed the writ petition but allowed the petitioner to file an application for stay of recovery proceedings and pre-deposit relief within thirty days, with recovery proceedings being kept in abeyance for sixty days to facilitate the petitioner's approach to the authorities. The petitioner was also given the option to file an application for an out-of-turn appeal hearing.