Madras High Court
M/S. Take Solutions Limited vs The Assistant Commissioner Of Income ... on 24 September, 2014
Author: V.Ramasubramanian
Bench: V.Ramasubramanian
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24.9.2014
CORAM
THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN
Writ Petition No.25907 of 2014
M/s. TAKE Solutions Limited
rep. by its Director D.V.Ravi
No.76, Venkatakrishna Road
Raja Annamalaipuram, Chennai 600 028. .. Petitioner
Vs.
1. The Assistant Commissioner of Income Tax
Company Ward-III(1), 121, M.G. Road,
Nungambakkam, Chennai 600 034.
2. The Joint Commissioner of Income Tax
Company Ward-III, 121, M.G. Road
Nungambakkam, Chennai 600 034.
3. The Commissioner of Income Tax (Appeals) III
121, M.G. Road, Chennai 600 034. .. Respondents
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Petition under Article 226 of the Constitution of India praying for a writ of Certiorarified Mandamus calling for the records on the file of the second respondent in C.R.No.JCIT/Co.Rg.III/38/Stay Petitions/2014-15 relating to the application made by the petitioner for stay of demand under Section 220(6) of the Income Tax Act, 1961 and quash the order dated 12.9.2014 rejecting the stay petition and direct the first respondent to grant stay of demand relating to the assessment order for the assessment year 2006-07.
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For Petitioner : Mr.R.Sivaraman
For Respondents : Mr.T.Pramod Kumar Chopda
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O R D E R
The petitioner has come up with the above writ petition challenging the imposition of a condition by the respondents, for the grant of stay of demand of the order of the Assessment Officer.
2. Heard Mr.R.Sivaraman, learned counsel for the petitioner. Mr.T.Pramod Kumar Chopda, learned Standing Counsel takes notice for the respondents.
3. The petitioner suffered an order of assessment for the year 2006-07 on 12.12.2008. The assessment was re-opened under Section 147 of the Income Tax Act and a fresh order was passed on 29.3.2014.
4. The petitioner filed an appeal on 22.4.2014. The petitioner also moved a stay petition. The stay petition was disposed of by the Assistant Commissioner of Income Tax, by order dated 25.6.2014, directing the petitioner to pay the entire amount of demand, namely Rs.5,59,10,094/- in 14 equal instalments of Rs.35.00 Lakhs each and an amount of Rs.69,10,094/- as the 15th instalment. As against the said order, the petitioner filed an appeal under Section 220(3). On the said petition, the second respondent passed the impugned order, rejecting the request for a modification. Hence, the petitioner is before this Court.
5. The total demand made upon the petitioner, as per the revised order of assessment is Rs.5,59,10,094/-. The grievance of the petitioner is two fold. The first is that the entire profit earned by the subsidiary company of the petitioner out of India, has been included in the total income of the petitioner and that the benefit under Section 10-A is denied. The income, as assessed as per the original order of assessment was Rs.6,36,73,570/-. The total income assessed as per the revised order is Rs.16,43,36,030/-.
6. Therefore, relying upon Instruction Nos.96 and 1914 of 1993 dated 02.12.1993, the learned counsel contended that the petitioner is entitled to an unconditional stay. Relying upon the decision of a Division Bench of the Delhi High Court in Taneja Developers and Infrastructure Ltd. v. Assistant Commissioner of Income Tax [(2010) 324 ITR 247 (Delhi)] and UTI Mutual Fund v. Income Tax Officer [(2013) 260 CTR (Bom.) 56], the learned counsel contended that whenever the demand exceeds the original amount by two times and appears to be unreasonably high-pitched, the petitioner should have the benefit of absolute stay.
7. Moreover, the learned counsel for the petitioner contended that the entire income of the foreign subsidiary, cannot be included in the total income of the petitioner under any provision of law. Only if dividend is declared and if it is paid or accrues to the assessee from the foreign subsidiary, it is possible to add the same to the income of the petitioner. Therefore, the learned counsel contended that it is a clear case for the grant of unconditional order of stay.
8. I have carefully considered the above submissions.
9. It is true that the demand is high-pitched. But, what is reasonable and what is unreasonable, cannot really be determined, without reference to the facts of each case. The condition imposed by the respondents directing the petitioner to deposit the entire amount, in 15 instalments may be wrong. But, in such cases, there are two options open to the Court. One is to set aside the order and to remand the matter back for a fresh consideration in accordance with law. The other is to impose a reasonable condition for the grant of stay and to direct the appeal itself to be disposed of. The second course of action appears to be a better course of action.
10. Therefore, the writ petition is disposed of, granting an interim stay of the demand now made, subject to the condition that the petitioner deposits with the respondents, without prejudice to their rights, a sum of Rs.1.00 Crore within a period of eight weeks from the date of receipt of a copy of this order. The Appellate Commissioner shall dispose of the appeal within a period of four months from the date of receipt of a copy of this order. No costs. Consequently, M.P.No.1 of 2014 is closed.
Index : Yes/No 24.9.2014.
Internet : Yes/No
Note to Office:
Issue order copy on 25.9.2014.
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To
1. The Assistant Commissioner of Income Tax
Company Ward-III(1)
121, M.G. Road, Nungambakkam
Chennai 600 034.
2. The Joint Commissioner of Income Tax
Company Ward-III
121, M.G. Road, Nungambakkam
Chennai 600 034.
3. The Commissioner of Income Tax (Appeals) III
121, M.G. Road
Chennai 600 034.
V.RAMASUBRAMANIAN,J.
kpl
W.P.No.25907 of 2014.
24.9.2014.