2012 (5) TMI 199 - AT - Income Tax

Stay - Admission of appeal before ITAT where no payment was made u/s 249(4) - held that - in view of the case of Pawan Kumar Laddha (2010 -TMI - 75438 - SUPREME COURT) the appeals of the assessee are maintainable because the provisions of section 249(4)(a) in Chapter XX-A relating to the filing of appeal before the CIT(A) cannot be read into section 253(1)(b) in Chapter XX-B of the I T Act which relates to filing of an appeal before the ITAT. - stay granted.

Issues Involved:
1. Stay against the outstanding demand of Rs. 349.09 crores.
2. Adequate opportunity and principles of justice.
3. Premature order under section 201(1) and 201(1A).
4. Applicability of section 249(4) for the appeal before the ITAT.
5. Attachment of bank accounts and financial difficulties.

Detailed Analysis:

1. Stay against the outstanding demand of Rs. 349.09 crores:
The assessee filed Stay Petitions seeking relief against the outstanding demand of Rs. 349.09 crores for the assessment years 2010-11, 2011-12, and 2012-13. The demand included amounts under sections 201(1) and 201(1A) of the Income Tax Act, 1961.

2. Adequate opportunity and principles of justice:
The assessee argued that the Assessing Officer (AO) did not provide sufficient and adequate opportunity before treating the assessee as a defaulter under section 201(1). The orders passed were described as "silent, non-speaking," and lacking reasons or causes for determining the default and levying interest under section 201(1A). The assessee contended that the AO should have considered the financial difficulties and the fact that many recipients had already filed their tax returns. The AO's order was claimed to be rushed, as a letter dated 21.12.2011 seeking compliance by 26.12.2011 was received by the assessee on 29.12.2011, and the order was passed on 30.12.2011.

3. Premature order under section 201(1) and 201(1A):
The assessee argued that the order under section 201(1) was premature, as it was passed before the end of the financial year, contrary to the Supreme Court's ruling in CWT v. Kantilal Manilal. For the assessment year 2012-13, the time for filing annual returns was still available. The AO's order was also claimed to be inconsistent with the jurisdictional High Court's ruling in CIT v. Intel Tech India Pvt. Ltd., which stated that an assessee cannot be declared in default unless efforts are made to collect directly from the recipients of income.

4. Applicability of section 249(4) for the appeal before the ITAT:
The CIT, DR argued that the appeals could not be admitted without payment of due taxes as per section 249(4). However, the assessee's counsel contended that this provision applies only to appeals before the CIT(A), not the ITAT, citing the Supreme Court's judgment in CIT v. Pawan Kumar Laddha. The Tribunal agreed, stating that the provisions of section 249(4)(a) in Chapter XX-A cannot be read into section 253(1)(b) in Chapter XX-B, thus allowing the appeals to be maintainable without the payment of admitted tax.

5. Attachment of bank accounts and financial difficulties:
The assessee's bank accounts were attached, halting business operations. The Tribunal noted that the business activities were disturbed due to the attachment and proposed a payment plan to allow the assessee to resume operations. The assessee was directed to pay Rs. 44 crores by 27.3.2012 and the remaining amount in weekly installments of Rs. 9 crores starting from 7.4.2012. The department was directed to lift the attachment to enable the assessee to earn from business activities and make the payments.

Conclusion:
The Tribunal allowed the Stay Petitions, directing the assessee to follow the proposed payment plan and the department to lift the attachment of bank accounts. The appeals were fixed for hearing on 12.4.2012.

← Previous Next →