TELETUBE ELECTRONICS LTD. VS COMMISSIONER OF INCOME-'SAX
1999 P T D 3489
[230 I T R 705]
[Delhi High Court, (India)]
Before R. C. Lahore and J. K. Mehra, JJ
TELETUBE ELECTRONICS LTD.
Versus
COMMISSIONER OF INCOME-'SAX
C.W. No.3104 of 1997, decided on 05/08/1997.
Income-tax---
----Recovery of tax---Stay of demand---Rejection of application for stay should be by a reasoned order---Indian Income Tax Act, 1961, S.220---Constitution of India, Arf.226..
The Deputy Commissioner of Income-tax passed an order of assessment against the petitioner raising a demand of Rs.9,53,42,953 on account of income-tax and Rs.6,81,64,603 on account of interest making a total of Rs.16,35,07,556. The petitioner had filed an appeal against the order of assessment. The petitioner also moved an application under section 220(6) of the Income Tax Act, 1961, before the Assessing Officer seeking stay of the demand, so as to not treat it as in default in respect of the tax forming the subject-matter of appeal. The Assessing Officer rejected the petitioner's application. The petitioner moved an application before the Commissioner of Income-tax. The Commissioner of Income-tax directed the petitioner to pay a sum of Rs.2 crores until the disposal of the first appeal. On a writ petition against the order:
Held, that out of the several grievances raised by the petitioner, two were worth being noticed: firstly, that an amount of Rs.78,47,380 had been deducted by way of tax at source, credit whereof had not been allowed to the petitioner while passing the orders in question though the attention of the authorities was specifically invited to it; secondly, the C.B.D.T. had issued circulars which were published in 176 ITR (St.) 240 and 182 ITR (St.) 79, the direction contained wherein had not been kept in view by both the authorities though the attention of both the authorities was specifically invited to this aspect as well. Prima facie from a perusal of the orders it was clear that the contentions raised by the petition, had not been disposed of by a speaking order and no reasons had been given for rejecting the petitioner's prayer for giving it credit to the extent of the amount of tax deducted at source. The Assessing Officer had to afford the petitioner an opportunity of hearing and dispose of its application.
M.S. Syali and Satyen Sethi for Petitioner.
R.D. Jolly and Ajay Jha for Respondent.
JUDGMENT
As counsel for the respondent has made appearance, in view' of the short controversy arising for decision, we have heard the parties finally.
Rule D.B.
The Deputy Commissioner of Income-tax, Range IV, passed an order of assessment against the petitioner raising a demand of Rs.9,53,42,953 on account of income-tax and Rs.6,81,64,603 on account of interest making a total of Rs.16,35,07,556. The petitioner has filed an appeal against the order of assessment. The petitioner also moved an application under section 220(6) of the Act before the Assessing Officer seeking stay of the demand, so as not treat him in default in respect of the tax forming the subject-matter of appeal. The Assessing Officer has, vide order, dated March 6, 1997, rejected the petitioner's application.
The petitioner moved an application before the Commissioner of income-tax which has been partly allowed, vide order, dated July 23, 1997 (Annexure P-6). The Commissioner directed the petitioner to pay a sum of Rs.2 crores until the disposal of the first appeal.
The petitioner has come up to this Court by filing this petition feeling aggrieved by the orders of the Assessing Officer and of the Commissioner of Income-tax. Out of the several grievances raised by the petitioner, two are worth being noticed; firstly, that an amount of Rs.78,47,380 has been deducted by way of tax at source, credit whereof has not been allowed to the petitioner while passing the impugned orders though the attention of the authorities was specifically invited to it; secondly, that the Central Board of Direct Taxes has issued circulars which are published in (1989) 176 ITR (St.) 240 and (1991) 187 ITR (St.) 79, the directions contained wherein have not been kept in view by both the authorities though the attention of both the authorities was specifically invited to this aspect as well. It is further submitted by learned counsel for the petitioner that on both counts there has been failure of justice and a demand has been raised against the petitioner which the petitioner would not, looking to its financial condition, be in a position to honour and that would result in denial of the right of appeal to the petitioner.
There is substance in the contentions so advanced. Prima facie from a perusal of the impugned orders we are satisfied to hold that the contentions raised by the petitioner should have been disposed of by a speaking order and reasons should also have been assigned while the petitioner's prayer for giving him credit to the extent of the amount of tax deducted at source was not allowed.
In the facts and circumstances of the case, we are of the opinion that the ends of the justice would be satisfied if the respondents are directed to dispose of the petitioner's application under section 220(6) of the Act afresh.
For the foregoing reasons, the petition is partly allowed.
Respondent No. 2, who is the Assessing Officer, shall afford the petitioner an opportunity of hearing and dispose of his application (Annexure "P-2"), afresh consistently with the observations made hereinabove. We may place on record that counsel for the petitioner has expressed the willingness of the petitioner to pay the amount by instalments as pointed out by the Commissioner of Income-tax in his order, dated July 23, 1997, subject to credit being allowed for the amount of Rs.78,47,380 being the amount of tax deducted at source out of Rs.2 crores as pointed out by the Commissioner in his order.
The petition stands disposed of accordingly though without any order as to costs. C.M. and C.W. disposed of.
Dasti to both the parties.
M.B.A./3126/FC ??????????????????????????????????????????????????????????????????????????????? Petition disposed