2015 (5) TMI 394 - HC - Income Tax

Demand notices u/s 156 - requirement of deposit during the pendency of appeal - whether the petitioner-assessee shall be treated as assessee in default and appropriate action of recovery shall be taken? - petitioner-assessee had already deposited 50% of the amount - Held that - The issues are already concluded in favour of the petitioner-assessee by the decision of this Court in the case of GSPC Gas Company Ltd. (2013 (11) TMI 1542 - GUJRAT HIGH COURT) and without expressing anything on merits with respect to the additions made by the Assessing Officer, as the petitioner had already deposited 50% of the tax demand as per the notices of demand for all the three Assessment Years, in the facts and circumstances of the case, we direct that during pendency and final disposal of the respective appeals before the learned CIT(A) against the assessment orders for the Assessment Years 2008-09, 2009-10 and 2012-13, the petitioner may not be treated as assessee in default. The learned CIT(A) to decide and dispose of the respective appeals in accordance with law and on its own merits without, in any way, being influenced by the present order expeditiously. - Decided in favour of assessee.

Summary

Issues:
Dispute over treatment as assessee in default during pendency of appeals for different Assessment Years.

Analysis:
The judgment addresses petitions by a State Government undertaking challenging the rejection of their proposal not to be treated as assessee in default on payment of 25% of the outstanding demand for three Assessment Years. The Assessing Officer had raised demands for various additions in the Assessment Orders for the years 2008-09, 2009-10, and 2012-13. The petitioner-assessee, pending appeals before the CIT(A), proposed to pay 25% of the demand to avoid default status. However, the proposal was rejected, leading to the present petitions under Article 226 of the Constitution of India.

The petitioner argued that the additions made by the Assessing Officer were legally unsustainable, citing precedents in favor of the assessee. They contended that the proposal for partial payment should have been accepted, especially since they had already deposited 50% of the demanded amount as per an interim order. The petitioner relied on a Division Bench decision in support of their plea.

The respondent, while not opposing the petitioner's deposit of 50% of the demand, requested the CIT(A) to decide the appeals on their merits without influence from the current order. The court, refraining from expressing views on the merits of the issues, directed that the petitioner not be treated as assessee in default during the pending appeals, considering the 50% deposit made. The CIT(A) was instructed to decide the appeals independently and promptly, without being swayed by the current order.

In conclusion, all petitions were disposed of with this direction, ensuring the petitioner's non-default status during the appeal process and emphasizing the CIT(A)'s independent consideration of the appeals.